Counter Offers, Often Counter-Productive

Posted by Ben on September 18, 2009 under Editorials, Recruiting & Hiring | Be the First to Comment

In recent CED columns we have addressed creative ways to attract, recruit, hire, motivate and retain top performers…the impact players who can help a dealer or manufacturer survive in tough times (like 2009), and help drive profitable growth whenever possible. However, there are times when, as a top executive, you are unpleasantly surprised by the resignation of one of your good people. Ideally your senior management team will be so close to the organization that surprises like this are very few and far between…but we live in a real world and sometimes, despite best efforts, “stuff happens” and people decide to change companies.

There are many HR resources available on how to properly deal with employee departures, to include surprise resignations. Many companies have defined procedures for exit interviews which, if properly handled, can be a worthwhile learning experience for the employer and can ensure a clean and friendly separation. This is important for many reasons, including the fact that we live and work in a tight knit industry which places real value on positive personal relationships.

Let’s shift to a scenario where a valued employee, perhaps a genuine “impact player”, tenders a surprise resignation to pursue a new opportunity. Career enhancement and/or money may be the change motivators. If that’s the case, an employer may entertain thoughts of offering an inducement for the person to stay…maybe more money, perhaps the promise of a promotion, maybe both. Doing so enters the employee and employer into the realm of COUNTEROFFERS and this can be a “slippery slope”. You might ask: “What could possibly go wrong if our company is using more compensation or the promise of a promotion to keep a solid performer from departing?” Let’s assume that he or she accepts your counteroffer, decides to stay, and notifies the prospective employer that they have changed their mind and will now be rejecting the employment agreement they had accepted, because (like a pro athlete) the company they’ve been working for “upped the ante” with a new and better deal.

Several years ago, the Wall Street Journal published a comprehensive article dealing with counteroffer pitfalls. Based on Jordan-Sitter Associates’ 30 years of experience, and Bill Sitter’s personal experience leading AED dealerships, we can validate negative aspects surrounding counteroffers from three perspectives: the employer who’s counteroffer convinced the potentially departing person to stay; the employee who accepted the counteroffer; and the company who thought they had made a fair offer and obtained a new hire, only to be rejected after an agreement had been forged.

• The employer who felt compelled to tender the counteroffer (to retain him/her) will perhaps always have doubts about loyalty. They may wonder if there will be future resignation threats as a leverage tool. Doubts may arise about the advisability of giving this person more responsibility, in the future, because they may pick another inopportune time to seek greener pastures and leave you high and dry.

• The employee may be excited about the new compensation package and or increase in status; however there will likely always be the questions: “Why did I have to threaten to leave, to get things I felt I had really earned by my past performance?” “Did my employer extend the counteroffer just so I can help them get by until they can find a qualified replacement?” “Will I be viewed as a long-term team member or will my loyalty always be in question?”

• The company who thought they’d reached a hiring agreement may have already reorganized to accommodate the new hire, thus disrupting one or more impacted people. And, they will feel that a trust has been violated, and may conclude that their sincere hiring efforts have been abused, just so the employee could bargain for a better package.

It would be inaccurate for us to suggest that a counteroffer tactic never works. There are no doubt examples where a (potentially) departing employee was induced to stay, with a sweetening of their package, and went-on to be a key contributor. However, there are many cases that prove our point. We do hope that readers of this column will thoughtfully evaluate the pluses and minuses associated with counteroffers and avoid knee jerk responses to a surprise resignation. We trust that we’ve established that there are potential pitfalls and that counteroffers may be counter productive in the long haul.

Bill Sitter – bill@jordansitter.com // Chris Sitter – chris@jordansitter.com

Boosting Morale in a “Bruised” Economy

Posted by Ben on under Editorials | Be the First to Comment

While arriving at this column’s title, we recognized the fact that some of our AED readers might prefer to substitute “bumbling,” “busted” or even “broken” for the title word “bruised” when describing the current economic state of America and the equipment industry. Regardless of your description, we believe that all managers are challenged with maintaining, or more likely boosting, employee morale in times when doom and gloom-sayers seem to lurk around every water cooler and run rampant in the media.

For 30 years our Jordan-Sitter Associates Team has been privileged to work closely with mid to very senior level managers, with AED dealers and with equipment manufacturers – large and small.  When business was booming (yes, it will boom again), companies felt free to reward special individual and team performers with gifts, special outings…even sales or management meetings at resorts. Properly used, all these activities can be motivators and morale boosters. That’s all well and good, but: How can a company reward the people who are “working their tails off” to keep the enterprise afloat, in the today’s challenging economy? And what can be done that has high impact and relatively low cost? Let’s explore a few ideas:

• Praise – both public and private – has always ranked at or near the top, in employee satisfaction surveys. Proverbs 16 verse 24 tells us: “Pleasant words are as a honeycomb, sweet to the mind and healing to the body.” Praising performance, in words or with a personal note, takes caring, some time, but can cost nothing. We are not suggesting false praise but a sincere pat on the back and a “thanks for a job well done.” As the boss, your genuine, heartfelt, expressions of praise mean a lot and are long remembered.
• Communication – Your employees want to know what’s going on, and what management is thinking. We have all experienced the toxic impact of the company rumor mill, and we realize that most gossip is based on imagined scenarios. Allow us one more reference to the Book of Proverbs chapter 12, verse 25: “Anxiety in the heart of man causes depression, but a good word makes it glad.” We encourage business leaders to be as open and sharing as possible in their communications with associates. Remember, they are on your team and they really care. Sharing builds trust and reduces harmful stress. Open communication enhances teamwork by focusing everyone on clearly understood challenges and goals. In a few paragraphs, we are going to seek creative morale-boosting ideas from you. First, we’ll salt your thinking with a few more low budget, but often overlooked, ways to say thanks to the ladies and gentlemen who you’re counting on for the sustainability and growth of your department or entire enterprise.
• Group lunches – like pizza on the porch or barbeque in the shop. We’ve all done these and we know the total cost is minimal but the thought is appreciated. It’s even better if, as one of our client’s does, the senior managers serve the employees, eat last, and even clean up. If funds are really tight, consider a potluck…but do something positive and take photos. You’ll be surprised at the positive impact
• Movie passes with a thank you note from the boss – this is an inexpensive way to say thanks to a person, and a few extra passes shows the whole family that “their company” appreciates them.
• Family appreciation days – ask some of your employees to organize a fun outing with realistic budget guidelines. You’ll probably be amazed at the good ideas that will surface and the participation will be high because it is “their idea.”

As this article goes to press, the authors are preparing for our annual July 4^th celebration. We love the fact that about 50 people (JSA Associates, neighbors and church friends) enjoy honoring this nation’s heritage and just having fun. We’ll play games, pitch horseshoes, play Frisbee, enjoy some carefully controlled BB gun target shooting, eat…eat…and eat…, and watch the area’s fireworks. And you know what? The memories and fellowship are great and the potluck approach keeps the cost in-line with our spending plan.

We hope this rather light-hearted column has stimulated thoughts about how you can maintain, or perhaps rekindle, some espirit de corps with your company team. We’d really like to get your ideas on other successful and economic morale boosting techniques. Please email us at the contacts shown below. Happy Independence Day and God Bless America!

Bill Sitter – bill@jordansitter.com // Chris Sitter – chris@jordansitter.com

This article originally published in CED Magazine, July 2009