Retaining key employees 2009-103.1

For the third time in a few months, George has been asked to approve an exceptional salary increase for an outstanding employee, this time a relatively recent appointment. Frank managed a Stakeholder Relationship Management (SRM) team to which Helen had been recently recruited, and was already proving a high performer with excellent skills. Though she had less experience in resource allocation, she had succeeded in significantly advancing the development of resource allocation plans that had failed on three previous attempts. Helen had already expressed her appreciation for flexible working hours, but given that she was recently divorced with two young children, Frank knew she needed the extra money and that she had been offered a higher-paid job with a private company. There was a strong case to approve an exceptional salary increase, but George was also aware that other team members, and more senior team leaders, might consider that they also merited such an increase. But with fixed baseline budgets to adhere to, such increases would eventually translate to fewer employees at a time when SRM’s overall workload was already increasing. George not only had to decide whether to request authorisation for negotiation of a higher salary, but also had to devise a strategy to retain key SRM employees.

This case prompts discussion of the need and reasons for HR policies to include a retention strategy. It also highlights issues such as rewarding new vs long-serving staff, and singling out special performance without creating a precedent. The vignette-length case was originally developed for a post-graduate HRM course.