So I have been with this company for over three years and got promoted recently. I have a few resources reporting to me directly who have been working for the client (through another company) way before I joined (and now they are working for the same client through our company). So they have a better relationship with the client than I do.
After the performance appraisal this year (this performance review process involves me, my boss and my boss' boss), a bunch of them teamed up and resigned stating that they were not happy with the ratings and unhappy with me. We have a two month notice period policy. They refused to talk to me so HR got involved. Now my manager has come back to me with an update from HR, saying these guys don't want to report to me anymore so he asked me to transfer them to him. Once I do, they will report to my manager directly.
Now, I don't know what exactly triggered the trouble. We work with the client on individual assignments so I don't keep track of their work or do a lot of management. My manager has always said that I need to give them all the freedom they need (work from home, leaves, etc) so I have never questioned anybody with anything. It is majorly due to the promotion which they did not get and also that they don't want to report to a female I believe.
My manager tells me that he doesn't think that any of it was my fault. But to retain them, he needs to change their reporting and make them happy (due to a lot of pressure from client side which I am aware of). I am unsure what to do. Plan as of now is to try to reason with my boss and have my reportees prove what I did wrong. If it doesn't help, go the next level (like my boss' boss). But I don't know how much this will help. Also, I have a long term plan in this company so don't want these guys ruining my chances and my reputation.
Please give me some suggestions on how to handle this situation. And what happens if I transfer the employee reporting to my manager and what if I refuse to do so?
EDIT (copied from self-answer):
this is Swathi. Thanks for all your responses. I am from India, apologies for not specifying this earlier.
The reason I posted this question or have been thinking about this so much is not because I want to have my reportees to continue reporting to me. It wasn't about them, because I have understood that there is no good in imposing on them. I wanted to understand how this could affect my image in the company to my peers and higher management. And also if this affects my performance rating for the next year. I just wanted to understand what are the consequences of this for me. Because I worked in different countries (US, UK, Middle-East), clients from different regions across the world, different roles and have succeeded in those roles. I have never faced this kind of trouble with the team or the client in my previous roles. On top of it, everytime I see my peers during a break, they would bring out this topic and discuss it for hours in front of me. I wasn't sure if they were supporting me or against me. I kind of lost focus and just wanted to be over with it.
Anyways, my boss called me again yesterday. I explained to him that I fail to understand what my fault is here, what they are saying about me. And also that I am in this for the long haul so I want to understand how this affects my chances of growth and next year's performance appraisal, etc. (He felt that I was questioning his decision and wasn't too happy about it, but) he explained to me that this situation doesn't affect what he thinks of me. It is due to the pressure from the client that they are having to retain the resources and the reporting change has to be quick. He also gave me full responsibility of the team I am currently part of (since the current manager is leaving the organization in a few days). I will be responsible and accountable for the entire team's delivery. So I guess it wasn't so bad afterall. Just going to forget this whole thing and start over.
Thanks everyone for your response and all the support!