Good Performer Resigns, Should I Make a Counteroffer?

Friday, November 17, 2006

"Good Performer Resigns, Should I Make a Counteroffer?" was the topic for discussion posted in the forum in this week's Workforce Newsletter. The question was catchy enough to draw my attention as I reflected upon the numerous instances when ex-peers, seniors and subordinates had resigned only to withdraw it weeks later after those closed-room "negotiations".

My question to both sides.
Firstly, if you are a manager and a highly valued person in your team resigns. This can trigger a ripple effect demotivating the rest of the team members. What should you do?

  1. Firstly, would you make a counteroffer to anyone and everyone who resigns? my instinct says no.

  2. Secondly, would you try and find out the real reason behind why the person has decided to go? In most cases, there is more to the 'money' story. It is not just because of the money factor or a 30% increase that a person decides to go. In my cases, it wasn't.

  3. Do you have the authority to make a counteroffer or is it just promises in the air for the moment?

  4. What are you reasons for making this counteroffer and is it worth it? Have you thought of the repercussions this can create? Wouldn't this entice others to follow the same route and set a bad example?

  5. Now the trickier part, you are a good manager and you knew well in advance the person was looking out for reasons that are beyond your control to be changed. The pep talks help only for a week in keeping the person motivated. What should you do?

A counteroffer need not always be monetary based though in most cases it is. A lot of times it is a bargain for a designation or a location change - the ever so lucrative onsite assignment in the IT industry. To put it bluntly, I call it blackmailing or bargaining. It is a situation where you say "you either give me what I want or I go".

Second scenario, you are the person creating this ripple - the one who has put in the papers. Counteroffers galore. What should you do? I have been in this position myself 2 times - once at Tata Infotech and the next at GE.

  1. Are you clear in the head? Do you know the reasons why you started looking out?

  2. If the counteroffer is a princely increase than your new offer, should you stick on overlooking all the other reasons?

My personal "Code book of Professional Ethics" has one golden rule - Never ever withdraw your resignation. You resigned for a reason and it is less likely the situation has changed. To believe that no one in the workplace would know of the "deal" is fooling yourself. I have known instances where managers making the counteroffer in a desperate attempt to retain the team member to keep the project going has resorted to revengous ways soon (sure, you make them feel a loser in the bargain). The water cooler gossip mongers wouldn't stop either. To keep your word and dignity, I always advise to stick to your word and go. And for managers, "let go" if its all official. Don't blame yourself for the situation if you know you have tried.