The relationship between boards and management is, by its very nature, a deep and complex one. The two sides rely upon one another to ensure the smooth oversight of their co-op and condo communities. Both are dedicated to doing everything possible to create a stable and welcoming environment for residents while at the same time, handling the day-to-day and big picture aspects of management, from dealing with vendors to ensuring a solid financial bottom line. With so much at stake, it is vital for everyone involved to be functioning at an optimal level. For boards and for the managers who work with them, building that well-oiled management machine is key to that success. So what can be done to ensure that everyone involved is performing at their optimal level and what role does a healthy dose of good communication play in that success? That’s where evaluations come into play.

Assessing Performance

There are two types of performance evaluations relevant to management success: the evaluation that individual managers undergo with their respective firms and the evaluations that take place between co-op and condo boards and their management firms.

For most boards and management firms, the process of evaluation starts before the contract is even signed when the two groups sit down together to discuss expectations and responsibilities. “Expectations and performance requirements are usually discussed at the onset of any contract,” says Dawn Carpenter, president of Dawning Real Estate Inc., based in Staten Island, and past president of the Greater New York Chapter of the Institute of Real Estate Management (IREM). “Then those expectations will be reviewed each year or every two years, based on the contract. All expectations should be written. If there are problems, though, the board will bring them to the manager’s attention immediately.”

Establishing that early level of understanding can go a long way toward building a healthy long-term professional relationship. “The more information the manager has about a building in the beginning of the relationship, the better,” says Mara Goodgold, a manager and director of operations at Midboro Management, Inc., based in Manhattan.

In addition to the previously decided upon expectations and requirements, there are other aspects of a manager’s performance that boards may look at to determine their satisfaction. These may include “responsiveness, follow-through, reliability, general knowledge, specialized knowledge, leadership, management skills, writing skills, communication skills, diplomacy and clarity,” says Goodgold.

When boards decide to conduct their annual or biannual reviews, there are a number of performance areas that may come into play, says Alex Kuffel, president of Pride Property Management Corp, with offices in New York and New Jersey. They might, for example, look at responsiveness. “How timely and effectively does the agent respond to the concerns of the board, residents and staff? Accountability—does the agent complete what he or she said would be done? If not, what proved to be an obstacle? Does the agent demonstrate sufficient knowledge of building systems and rules? What measures are taken to ensure that continuing education is a professional development requisite?”

Financial acumen and responsibility also will be key. “What steps does the agent take to ensure that the building operates with a balanced budget?” says Kuffel. “This includes controlling costs, scrutinizing invoices to ensure that what is being billed for was actually supplied and minimizing staff costs. Does the agent periodically review the budget to evaluate budgeted versus actual expenses? If there is an overage in the budget, what steps are taken in other areas to offset excess?”

Flexibility, too, can be an undervalued but vitally important asset in a manager. That flexibility can include a willingness to re-evaluate and adjust to new procedures or requirements. “One of the most detrimental things that can happen is for outdated policies to remain in place because ‘that’s what we’ve always done,’” says Kuffel. “A manager should strive to keep abreast of current trends and bring them to the board for consideration.”

For management firms, it’s equally important to evaluate the performance of individual managing agents. “The best indicator of an agent’s performance is the satisfaction of the board of directors, residents and staff,” says Kuffel. “Soliciting regular feedback allows for evaluation and improvement.”

Sometimes for managers, experience can make the biggest difference in performance quality. For some younger agents, it’s important to understand some grey areas. For example, it can be very helpful to have a good working relationship with a contractor but if you’re going out to lunch every day with that contractor, there may be a problem—or the perception of a problem among board members. “It’s about identifying the threshold and knowing where that ethical threshold is,” says Margie Russell, executive director of the New York Association of Realty Managers (NYARM).

Being on the top of their game in terms of education and a deep understanding of their field are two obvious attributes that can make or break a managing agent when it comes to internal company evaluations. “It’s a given that an agent will know their regulations,” says Russell. “Just like you don’t forget how to ride a bike or drive a car—you don’t forget the old ones. It’s important, though, to stay on top of the new ones. And new methodologies, which are really about budget, time and money, about doing things better and more efficiently and keeping the engine trim.”

Nipping Problems in the Bud

Sometimes, despite all good intentions, things may go awry between a board and its manager. It could simply be a personality conflict—perhaps a board member wants to do something that may not be in the community’s best interest and the manager may be the one to contradict him or her.

Other times, though, red flags can indicate other, larger performance related issues. “The most quantifiable red flags are costs,” says Kuffel. “Are there overtime costs due to poor scheduling? Are there undue expenses for emergency services that could have been planned for and scheduled? Is the building paying unnecessarily for repairs that fall under the shareholder or unit owner’s responsibility? An agent needs to know and understand the responsibility jurisdictions.” Kuffel cites an example of one building his firm took over where the former agent did not understand or know the parameters of the proprietary lease and the cooperative had spent considerable amounts of money on electrical repairs that were not the co-op’s responsibility to fix.

It is important for the long-term health of the relationship between board and management firm to nip problems in the bud before they escalate. “If I have a problem with a board member, I bring it to the board president,” says Carpenter. “They have the right to come to you and you have the right to go to them. And then usually we’ll just have a conversation. But response is key. It’s important to respond within 24 hours to any issue or request that comes from the board.”

Goodgold agrees. “It is also important for boards to communicate with the executive level of the firm when a manager is failing to meet expectations as soon as possible so the issues do not escalate,” she says. “The executive level should be extremely accessible to each and every board.”

If problems do arise, it is often up to the management firm to help their agent solve it. “I’m always right there with my agents,” says Carpenter. “It’s my business to make sure my agents are trained and prepared. (If something goes wrong), they need to feel comfortable enough to come to me and talk about it. Mentoring is very important in our business.”

That openness can make a huge difference for the individual manager. “The first step to improvement is communication,” says Kuffel. “Does the agent know of the deficiencies? The agent and board are a team; if one area is subpar, the overall performance is compromised. The board should communicate the areas for improvement to the agent. If this is not successful, the board should escalate their concerns.”

It is important to look at the specific nature of the problem as well. “If the person is a procrastinator and has a few payables in arrears because of paperwork, you’re going to handle that issue differently than if it’s a life and limb issue, which you would handle a lot more swiftly and emphatically,” says Russell. “It’s about seriousness, swiftness and tact, depending on how severe the issue is.” In many instances, the problem could simply be that the person does not have a lot of experience in a particular area. “Maybe they’re doing a lot of construction management and they haven’t done much of that before,” says Russell. “It could be a matter of just sending them to more classes to learn.”

It often takes a team approach to getting everyone back on track. “There are most likely several variables that are affecting workflow so trying to be open-minded about what the root issues could be when evaluating the situation is key,” says Goodgold. Approaches to solving those issues could include “general help in isolating problems, creating a game plan to tackle such problems, additional coaching, additional time with the manager to figure out where the board and manager are getting stuck in moving forward and resolving outstanding issues,” Goodgold adds.

Working Together

Still, perhaps the most important keys to a solid and long-lasting relationship between a co-op or condo board and its management team are realistic expectations, education and a steady flow of communication. And it helps to remember, too, that evaluations are not negative things. They can be an opportunity to praise an exceptional performance and they open the doors to change and evolution within a co-op or condo community. “Performance evaluations are important for all employees from property management employees to building staff employees to actually, everyone,” says Goodgold. “There are so many opportunities in property management for learning and growth that a performance feedback system is one way to capture such an opportunity.”

Too, it is always helpful to remember that everyone, whether manager, board member or resident, is working toward one ultimate objective: creating an outstanding place to live.

Liz Lent is a freelance writer and a frequent contributor to The Cooperator.