sai prasad.r
15

In certain situations, managers might become very concerned about the

retention of certain employees — in a turnaround, there might be a few

employees whose experience is critical to the future of the business, or an

employee might have a significant client relationship, that is vulnerable if

he or she leaves the firm. In these (and other) situations, managers might

want to use a retention bonus, simply because they think a top performer is

vulnerable to outside offers.

*Break Down the Problem*

The variety of issues managers try to address with retention bonuses is so

diverse, no single solution would work for all of them. The first thing to

ask is how — and why — money will address the reasons that someone might

leave the company. This simple question can reveal a gap in the requestor's

thought process.

It is absolutely critical, however, to know what that person is trying to

say to the employee. Managers do not always realize compensation is a

communication device. Having a clear message, expressed out loud, is the

first step to getting at the root of the problem being solved.

*Many Problems, Same Solution?*

Compensation has become the "penicillin of motivation," curing all ills.

Compensation is frequently the first, or only, solution thought of to solve

what is invariably a more complex problem. If an employee is unhappy, this

is often a symptom of a deeper problem.

First, make sure the manager has asked, "Are you unhappy? Why?" I have been

amazed at how many managers come to HR, seeking a monetary solution to a

problem they have not really diagnosed.

*Diagnosing the Problem*

In HR, one of our roles is to help managers "see" the problem. In the case

of an unhappy employee, simple questions will reveal the many layers within

a problem. The employee might be preoccupied with an issue unrelated to work

or be having a problem with a co-worker (or manager).

Problems with managers are varied, but they often boil down to too few or

one-way communications. Having the manager "give" something will not solve

the problem. Even if employees feel underpaid, giving them a retention bonus

can be perceived as proof that their hunch was right, which can actually

provoke someone to look for better opportunities elsewhere.

*In What Cases Does a Retention Bonus Work?*

The short answer is "almost none" — in 30 years, I have yet to see a

retention bonus retain, let alone motivate, anyone. The limited application

of this approach is for business shutdowns, for which keeping people to a

certain date is important.

In most situations, what works is specific to the problem diagnosed. In a

business turnaround, tripling communications and sharing some of the

"upside" can be very effective to keep critical talent. An opportunity to

have more impact on the business and a chance to earn extra money by

achieving business goals sends a clear signal about someone's importance to

the company.

In the case of the employee who is a critical link to a key customer, do not

perpetuate the problem by locking that person in place. If you have a

customer relationship so fragile that one person leaving would unwind it,

get wider coverage on the customer immediately. If the employee resists, he

or she is holding your business hostage, and I would use the exact opposite

of a retention bonus.

And for unhappy employees, the solution will depend on what you discover. If

the problem is work-related, you might need to change what the employee is

working on or resolve a staff conflict. If money is involved, it should come

after all other solutions, and then, it should be in a more appropriate form

than a one-time bonus for staying.

*Don't Wait for Symptoms*

The best tool to retain employees is to select, train and assess managers on

their ability to not only motivate, but also to do preventative treatment

and early-stage diagnostics on emerging motivational issues. Actively

discussing work interests and career goals with each employee gives the

manager ongoing insight. Great managers use this insight to calibrate their

investments of the "motivational capital" inherent in the work itself and in

the best performers.

[About the Author: Kate DCamp is the senior executive adviser at Cisco.]

From India, Hyderabad
dreamguy
5

READ YOUR OTHER ARTICLES AND THEY WERE GOOD. WILL READ THIS ONE TOO SHORTLY. THANX N DOTN FADE AWAY AFTER THIS CONTRIBUTION KEEP UP WITH THE HIGH SPIRITS. THANX N REGARDS
From India, Delhi
Govil Nanda
10

Hi
I completly agree with you. retention bonus has to be the light resort. If an employee decides to leave then he'll certainly leave, if not now then after some time. In my organization i have seen such cases and even people misusing the same.
Regards
Govil Nanda

From India, Delhi
pluskrishnan
Some organizations injects retention bonus in such a way that it retains an employee without allowing him to misuse.
One such example..
A private bank gives generous loan to its employees at a discounted interest rate of just 2%. However if he quits within 3 years, he has to repay the original interest(which is anyways more than 10%) right from the date of loan sanction.
Krishnan
http://writingsincefree.blogspot.com/

From India, Bangalore
Jeroo Chandiok
7

The article is excellent. Thanks for posting it.
This should encourage our colleagues to look for the real reasons why employees wish to leave, and to take measures to remedy matters, wherever possible.
It is also very useful to ensure that key employees do not hold the company to ransom, and that wherever possible, employers should have backup options ready in case of sudden departures which would be disastrous for the company.
Jeroo

From India, Mumbai
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