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I am managing a team and I have a new member in my team. She has been with us less than a year. Policy in the company doesn't allow raises before finishing the first year of employment. I told her that I appreciate her work and that she was up to my expectations and she was the output of more than 50 interviews for this position, I think this made her conceited a little bit. She submitted her resignation telling me that she is not happy with her salary trying to get a counter offer! From a management perspective, what would you suggest? given that:

  1. She is a good and qualified member and don't like to lose her and enter the search for another candidate once again.
  2. We are paying her better than what the market is paying in general (so we are above the average in paying in the market for her position)
  3. I don't like to have this as a trend or behavior in my team because whatever I pay you, you would like to have more! this is the nature of human.

So, if you were in my place what would you do? or what you suggest me to do in such case

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    Did she resign and then say she wanted a counter-offer? Or is she going to work somewhere else because she has a new offer? – Erik Jan 20 at 10:30
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    How long has she been in the job, and why is she asking for a raise in the first year. Is the job a lot more work than she expected? - The fact she submitted her resignation instead of asking for a raise first, seems suspicious to me. Like that's not the real/only reason. – flexi Jan 20 at 10:43
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    @WEB there are already answers so just a quick comment. Programmers are in incredible demand at the moment. The problem is "someone wanting more money". Unfortunately that is "just the norm" at the moment in software. To be honest, the recommendation to her would be to leave the company - why work somewhere with a "rule" that you can't get a raise for a year? Every human only works for money; there is no other reason at all to work. Unfortunately there's no solution to the fact that programmers are in incredibly high demand at the moment. :/ :/ There's no solution. – Fattie Jan 20 at 14:08
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    Too few details to answer. How do you know you're paying her enough? Is the job really what she (could have) expected? I was tricked into a job that resulted to be 8 am-8 pm once and my bosses were shocked I wasn't happy. I mean they offered me the salary I had requested, right? And what about the technologies? Are they what you promised her during interviews? – BigMadAndy Jan 20 at 18:21
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    @Fattie: Re "Every human only works for money...", either that's not true, or I'm not human. Money is a consideration, of course, but I've had a number of jobs that I took instead of higher-paying alternatives, because the work was interesting and/or the working conditions were better. – jamesqf Jan 20 at 20:29

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From a management perspective you have 2 normal strategies when being strong armed with a formal resignation.

If you absolutely need the staff member for something you retain them however you can while you search for a replacement and until you can get rid of them. This is a company fail, because no one should be needed that much, but it does happen.

If you don't, you wish them the best of luck and let them go.

When someone is at the point of handing in their resignation, they already have one foot out the door, there is negligible chance of them staying for long whatever happens, the whole employee dynamic has changed for them.

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    Comments are not for extended discussion; this conversation has been moved to chat. – Neo Jan 21 at 16:38
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So, if you were in my place what would you do?

You either keep to your no-raises-in-first-year policy, and explain that to future candidates so they won't even bother asking and her you tell now a stern "no" to the demand, or you speak to the higher ups and agree to drop the policy.

Keeping it obviously has upsides like more stability, but then you have to understand that loss of talent like this one will keep happening, because whenever you will find someone who truly shines in their role, much higher than you expected, they will likely want to have their compensation fixed accordingly, and if they won't get it from you, they will get it somewhere else. And that is likely what has happened, she either already found a greener pasture, or is off to hunt for one.

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    @Web As the manager it will be your job to determine the reason the employee submitted their resignation within a year. Your assumption might be correct or it might be incorrect. The employee is leaving for a reason. Most employees don't quit a job after less than a year. – Donald Jan 20 at 18:04
  • @Donald I have had two experiences lately among my wider circle of relatives where two kiddos in their early twenties started to feel strongly that their work was not appreciated enough, especially in terms of salary. The overall impression I had -- although I'm in no position to really judge their performance -- was one of breathtaking entitlement bordering on delusions of grandeur. Instead of being happy to exceed what's expected from a junior employee and looking forward to being entrusted with a more responsible and better payed job soon, they strong-armed the employer and were let go. – Peter - Reinstate Monica Jan 21 at 14:16
  • ... (ctd.) I'm unsure where this attitude comes from. Social media and peer pressure may play a role, similar to pressure regarding beauty and other fields of life style. Careers are more transparent these days and hence more open to judgement. The peers keep closer contact and have better comparisons. Everybody wants to present the perfect persona to the world. <rant>And as soon as the smartphone runs out of juice they are helpless like babies in the city. Pitiful and ridiculous.</rant> – Peter - Reinstate Monica Jan 21 at 14:22
  • @Peter-ReinstateMonica - Misplaced entitlement is certainly a reason for a junior employee to leave a position. I suppose my point is the manager must determine if the reason is justified. Hopefully, the manager is then provided the power necessary to bring change, to prevent it from happening. It might be impossible to determine the reason, but if it keeps happening, the company must look inward for the reason new employees keep leaving. – Donald Jan 21 at 14:27
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    "Most employees don't quit a job after less than a year." - most "employees don't quit jobs, they quit managers". – Fildor Jan 21 at 15:52
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Wish her all the best, and regretfully start the hiring process over again. Either she's as good as she thinks she is, and will quickly find a better job at a better salary, or she's making a big mistake that she will soon regret, but either way she's made her decision, and you'd be wisest to let her stick with it. From this moment forward, all her decisions are hers to own, they aren't your problem anymore.

If this becomes a pattern, then you aren't as competitive an employer in today's market as you thought you were. (Maybe it's not salary --maybe this is an unappealing workplace for some other reason?) Short of that, you have to chalk it up to the unpredictability of individual human beings.

A final thought: As noted by @elrobis in the comments, in some industries, notably IT, it's increasingly common for ambitious young employees to job-hop frequently. It's often considerably easier and quicker for a competent junior programmer to get raises and promotions by moving from company to company than by staying in one place. It would probably have been smarter of her to have secured the next job before quitting this one, but again, that isn't your problem any more.

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    I agree with letting her go and pausing for reflection. Moreover, while I think employers should strive to pay competitively and cultivate a positive working environment/culture, I also think employers in the modern era should almost expect junior employees to job hop through their ranks. While I'm not a job-hopper myself (I've always been risk-averse, to a point of great detriment actually), my talented friends who did job hop earlier in their careers are very, very well compensated at this point. And to be honest, I regret not doing the same when I was younger, hungrier, and had more energy. – elrobis Jan 21 at 17:40
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She is a good and qualified member and don't like to lose her and enter the search for another candidate once again.

If retaining them and paying more still works out as a net benefit vs. the costs (monetary and time) of recruiting to replace her it may be worth bending the policy. As a manager your responsibility is to get the best outcome for the company. On the other hand if you think you can replace her with minimum fuss and hassle then wish her luck and move on.

I don't like to have this as a trend or behavior in my team because whatever I pay you, you would like to have more! this is the nature of human.

It's easy to fall in to the trap that entertaining this request must necessarily influence the future - yes she might talk to others (or they may simply observe it play out) and they might do the same. But remember that for that to happen the others will have to secure leverage in the form of higher paying offers elsewhere (which since you state you are already paying above market is going to be limited), sure the vast majority of people would like to be paid more, but only a subset of those are going to be able to apply any weight to that argument.

I understand the reluctance to set any precedent by acquiesing to this request but the only precedent you need to be setting here is that you consider each individual case on it's merits. Policies can be great tools for the general running of a business but you should never let rigid adherence to them harm the company instead.

From a management perspective, what would you suggest?

I tend to be of the opinion that hiring people is a crapshoot at best - you can never completely eliminate the possibility of hiring someone who turns out to be a mistake. And at best it's time consuming and costs a certain amount of productivity. So assuming budget allows I'd be tempted to offer her an increase inline with what you would have considered doing had this been at the 1 year plus mark and make it clear that this offer is that increase brought forward and that no additional raise will be considered at that point. This doesn't guarantee that she won't resign for a better offer elsewhere at that point - but it does make it clear that she can't do so purely to ellicit a counter, she's played that card now.

IMO this gives something to everyone:

What she gets:

  • More money now - and the extra she earns between now and when the raise would normally have been possible is straight profit.
  • Acknowledgement that she's worth bending policy for - it's non quantitive but many people consider this pretty valuable.

What the company gets:

  • Retains a "good and qualified" staff member
  • Avoids recruitment costs (time and money)
  • Time - you know now that she's a potential flight risk, get some contingency plans in place in the event she bails in the future.

Another thing to consider is that you can also consider this a re-negotiation of sorts - if she's asking for something else you can do the same. You don't say what sort of work they do but if applicable you can look at increasing targets etc.

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    Another question to ask is "What will happen if after a while she asks for more money once more?" – Ahmed Tawfik Jan 20 at 19:48
  • I don't think OP has the option/authority to "bend the policy" or they would have already done that if they considered it worth doing (vs losing the employee and having to recruit and ramp-up again). From the OPs perspective that policy is an "immovable object". Maybe they did even inquire about it, but were shut down by HR or similar. – seventyeightist Jan 21 at 20:24
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How much of what you said is fact, and how much is your interpretation?

Did she say she wanted a counter offer or are you just assuming that's the case?

How certain are you that you're paying her above-market? Remember that 'the market' is not some homogenous list of job titles. You could easily have 2 people with the same job/title where one of them is worth 50% more than the other, and the market for those kinds of people really is different to the market for everyone else.

Is this the first time she's brought up her salary or is it an escalation from something previous?


Based on what you've written so far, this would be my advice:

If you want to keep her, and would have been willing to give her a raise at her 1-year mark, and if she is in fact looking to stay, then offer to give her the raise early. Be explicit about the fact that this is instead of, not on top of, the annual raise conversation.

And also have a frank conversation with her. Make it very clear that you use the nuclear option and have it forgiven maybe once in your career. If she ever quits again there is no hope of a counter.

And then make sure that if she ever does quit again, you're in a position to let her go.

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First, the majority of employees (80-90%) who accept a counter offer will still leave within a year after. So any such offer should only be done if they are critical.

Second any such offer of a pay increase will impact morale of other employees who had to follow the rules for their pay increase.

Lastly pay is rarely the cause of dissatisfaction, but a symptom. If an employee is unhappy with the pay there is more likely other reasons they are dissatisfied with their job. Just giving more money is not going to fix those other issues. Which is why people often leave after accepting a counter offer.

If the employee has said they are not happy with what they are doing and need more money, then you need to explore what other needs are not being met by the employee. Addressing those may at least offset the time for them to reach the year marker for the pay increase.

If the employee has said they have another job or are threatening to resign then the recommendation is to let them go, for the reasons above.

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    Is there any statistics/study backing the 80-90%? Otherwise I'd be careful with factual numerical statements and at least clarify that it's personal perception. – Frank Hopkins Jan 21 at 3:10
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    There was a study done some years back (10 or so) that found that just over 50% would accept a counter offer, over 80% would leave after 6 months and over 90% after a year. I’ll see if I can dig it out. – Simon O'Doherty Jan 21 at 3:15
  • Thx, would be nice to have some answers with data for this often recurring topic ;) – Frank Hopkins Jan 21 at 3:46
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    The last time I saw it was on jobvite but the link no longer works. Found these references as jumping points. hbr.org/2015/07/setting-the-record-straight-on-switching-jobs & hbr.org/2016/05/… – Simon O'Doherty Jan 21 at 7:03
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    From personal experience it's been 100%, some of those were forced out soon after a replacement was found – Kilisi Jan 21 at 10:28
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Per your question:

She submitted her resignation

Great, start the knowledge transfer/documentation process. She has checked out mentally; say your farewells.


This is a load of hogwash and you know it.

Policy in the company doesn't allow raises before finishing the first year of employment.


What positive outcome do you foresee by convincing them to stay? Her staying only benefits you as you have clearly expressed in the hogwash above.

During my most recent job change management decided to match my new company's offer within 2 days of me providing my resignation letter, effective immediately if I accepted, which was a 24% raise.

Do you think I felt humbled that the company graciously underpaid me for years? Absolutely not, I had checked out; good luck to the company.

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The main aspect I look at in these situations is the market value of the person's skills and experience, slightly adapted to the current needs/shortages of my company.

Almost everybody wants more money, until they reach a comfortable spot where more money is almost unnoticeable. And then they still want more because at the end of the day, money is the tangible form of appreciation they are receiving from the company, even if it dulls over time as they get used to it.

Almost everybody gets more money when they successfully switch companies, so the argument "hey boss, give me more, I have a counter offer" is rather easy for the employee to make, no matter if true or false.

So if you decide on the market value of the person, you know what you should pay. If you are paying less, then it should be your pro-active best interest to pay them more. Don't even wait until they come to you.

I had cases where I onboarded someone very young and inexperienced and they turned out to go up the rungs like a rocket due to awesome abilities. In that case, do your very best to increase their salary as quickly as you can. If they google around for offers, and all other companies offer roughly the same as you, not only will they be glad that you are appreciating them, but they also have little reason to actively job-hunt.

I had cases where I knew I had to pay them more, but my company processes did not allow for it even after me trying hard with my higher-ups. I have told people to go looking for greener pastures in this case. Nothing else to do, really. Some of them were appreciative of my honesty enough and are still with me after many years now.

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All of these strategies are extremely short sighted. They all approach the problem as if money is the only way to solve this problem. More money keeps the employee and lessens the amount of effort taken to replace the person, or less money gets a new employee but some more work in finding a replacement. The fact that this whole process has been boiled down to a money versus inconvenience argument tells me there are more problems going on than this. And that someone would suggest that "This is a company fail, because no one should be needed that much," suggests that it's culture problem universal to business, and not just this company.

Any problem involving a person must first be solved by understanding the humanity of the people involved. Until that is done it will be impossible to create a culture where people want to stay. People stay when they feel appreciated. People are loyal when they are respected. People become assets when they are allowed to thrive themselves.

And the fact that the employee felt they had to create a drastic bargaining situation instead of having an open conversation about their needs with their boss/manager speaks volumes as well.

The first step in solving this problem has nothing to do with money. It has everything to do with humanizing, empathizing, and understanding your employees.

Start there and it will be easy to see what the next steps should be.

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  • This answer assumes that the company didn't have a conversation with her, and that the reason why she didn't want to stay is because of the company. It is possible for a company to have an amazing work environment and people still don't want to stay. For their own personal reasons or because they have unreasonable expectations. We don't know the case here, but I feel like this answer is a bit one-sided. I have seen both cases. I have seen companies be stingy, and I've seen employees be arrogant and unrealistically demanding. We don't know which is the case here. – stanri Jan 21 at 7:47
  • What we do know is that she wants to leave. And no matter why, her choice should be respected and the company shouldn't be changing its policies to retain just one employee. She is making this problem about money by stating in her resignation that she wants more! Why make this the company's problem? – stanri Jan 21 at 7:50
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    Stan, you are correct. I don't know exactly what happened. However, my logic isn't totally unfounded as can be seen by the arguments I listed. You seem to have missed the major point though. Please re-read all of the solutions listed previous to mine and find me one example that does not list money as the primary solution for solving a personnel issue. When you understand your employees are people, and not just "personnel" then "personnel" issues will stop being issues. – trrapp Jan 21 at 7:54
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    So, to counter my argument that companies should look at their employees as individuals, empathize with their needs, and view them as valuable assets, you quote the argument that says if you "absolutely need" an employee you should do what you have to until you can "get rid of them" and that employees being looked at as integral to the company is literally considered a "company fail?" Thank you for demonstrating why my comments are so needed on this thread. – trrapp Jan 21 at 8:08
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    Stan, I appreciate your comments. I think your last two comments represent the common ground I could agree on. – trrapp Jan 21 at 8:19
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Ask her to Bring Another Job Offer

I recommend you stress that the one-year rule is in place for good reasons and that you are not in a position to waive that just per an employee's demand. Instead, recommend to her, "rather than resigning as a first move, take some time to hunt for a new job, and when you have a better offer, present it to us, then we'll be in a better position to reconsider your compensation."

This has the benefit of shifting this from a negotiation based on power, to a negotiation based on two concrete numbers. She may never find her other option, and the problem goes away, or she may, and you can calculate clearly the best option.


Edit:

Folks, these recommendations of just-let-her-leave from many of the answers and comments miss the point entirely. Employee is not resigning so much as negotiating hard; were she straightforward resigning, she'd be gone and we'd not be having a discussion. WEB has thought of accepting and wants to avoid it if possible. WEB is looking for alternatives.

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    If she wants to leave, I'd respect her decision to leave. She's an adult, and this answer has to be careful not to imply that the company shouldn't listen to her or shouldn't respect her choice. If she resigns and the company says "no you don't" or "are you sure?", or anything on the lines of I don't believe you, I won't let you, rather do ..., it is not treating her as an independent adult who can make her own choices (and probably also a breach of contract). Her choice to resign should be taken at face value. – stanri Jan 21 at 8:30
  • @stan, I disagree that her resignation is at face-value. Rather, it is a tactic, a threat. She wants more money, and is still hanging around (I suspect). – Michael McFarlane Jan 21 at 19:44
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    I totally agree that it could be a tactic, but we don't know, and so the safest option is to take it at face value and not play any games in return. Regarding your edit, a resignation is not a good means of negotiating hard. It's stupid to use this method because the company has no faith that the employee is going to hang around, and if they do and the company gives into their demands this time, what's stopping them from threatening to resign again down the line? An employee willing to use resignation as a negotiation tactic is already halfway out the door in any case. – stanri Jan 21 at 20:07
  • You're certainly right that it's not a good means! – Michael McFarlane Jan 21 at 20:36
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If I were in your place, then I would have talked to the management and if management approves her pay, then I would tell her that we can raise your pay in 1 condition. If she agree to sign a document which says: She will not leave the company in next 1 year, whatever be the reason.

If she agrees, then its a win-win condition for both of them.

Note: I am not sure if it is legal. So, please confirm with your company lawyer before asking her to sign a document.

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    That's both unlikely to be legal and unlikely to be reasonable – Erik Jan 21 at 10:21
  • @Erik I myself faced this situation in a local company in India and I agreed! Though don't know if its legal. – Vishal Jan 21 at 10:27

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