Making a counteroffer to a resigned manager is bad policy

I’m the human resource manager at a medium-size corporation. A key department manager resigned without explaining why he’s leaving. The CEO consulted me to explore how to retain him. I told him it’s not a good idea, but he insists that I prepare a counter-offer to discuss with the resigned manager. Can you help me come up with a better argument against making a counteroffer? — Brown Bag.

A penniless 70-year-old man lived alone in a house on a 25 square-meter lot. He offered to sell the property to his neighbors for a high price, but no one was interested. The old man continued to live in the house and allowed it to deteriorate over the years.

The result? It also ruined property values in the entire neighborhood.

Could you be doing the same thing? That might happen if you put together an exorbitant, lucrative, above-industry level counteroffer to your manager that may create problems in your organization. A person will resign no matter what, whether the reason be trivial or not. It could be the usual move to greener pastures. It could be as incidental as the favorable location of the new employer.

Regardless of the reason for the resignation, you have no choice but to follow the CEO’s instructions. Do your best to formulate an attractive counteroffer so your boss does not suspect that you’re sabotaging his efforts. As soon as you’re done, document your proposal in an e-mail listing all the reasons why you’re against it.

Instead of spoon-feeding you the arguments, I’d rather you consider answering the following “what if” questions. You know the company’s culture and policy, and you know the personalities of your CEO and the manager. The following questions can be helpful in doing an exit interview:

One, what if the resigned manager rejects the offer? What’s the face-saving, fallback position for you and the CEO? What’s the negative impact on him? It could be worse than you imagine. No matter how secretive you are, this kind of thing will always leak out and become office gossip.

Two, what if he accepts the offer and resigns again? A counteroffer means only one thing — delaying the inevitable. It’s like bribing a cannibal to eat you last. Even if you offer a golden handshake with a three-year contract, there are many employers out there willing to buy out a manager’s contract if he’s really that good.

Three, what if other managers do the same thing? They can try, but there’s no assurance they will receive a similar counteroffer. If that happens, the next big issue is managing their morale and that of the workers they’re supervising. No one wants it to be known that they’re considered second-rate performers compared to the resigned manager.

Four, what if the salary and benefits are not the real issue? It could be the toxic management style of the CEO or someone else. Maybe, the resigned manager wants to avoid an obnoxious colleague or someone making an indecent proposal. He might have found out something within the company he doesn’t want to be involved with, like cheating on taxes or labor rights violations.

Five, what if the CEO insists on violating internal equity? Will your counteroffer upset the executive salary scale? Have you considered the industry standard or salary by seniority? Of course meritocracy takes precedence over seniority. Therefore, how far or how high can you go to make that counteroffer?

Six, what if he asks you — if the company can afford it, why offer it now? Or something along the lines of, if I’m worth that much, what was the cause of the delay in giving me the pay that I deserve? Will you have a credible answer? It’s a tricky situation. If he has made up his mind, there’s no point when he’s signed a job offer with his new employer.

Last, what if the departure reflects negatively on your poor succession planning? You can’t avoid that question even if no one is raising it. Even if you don’t want to admit it, it might signal that something is wrong with your management system. And the manager’s resignation exposes the weakness of your organization in creating and maintaining a robust business continuity program.

DIPLOMACY
A counteroffer won’t solve those issues. No matter what you do, you can’t force a resigned employee to reveal the identity of his new employer or his reasons for leaving. Be that as it may, everything must be done with a great deal of diplomacy and professionalism.

Once any person has filed a resignation, the die has been cast — their loyalty is already in question. Who knows? It could open the door of many opportunities for your company and the resigned manager’s new employer.

Money can rent loyalty but it can’t buy true happiness. If material rewards are the reason employees stay in your company, then it’s only a matter of time before another employer makes a bigger offer. Conversely, there are people who stay because they value things more important than money and material rewards.

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