July 29, 2008

George Just Quit! Now What?

By Paul Bieber

In last week’s blog George Glazier quit. You, as his supervisor, or owner, have to decide whether to accept George’s resignation, or try to keep him as an employee. You made your list of pluses and minuses, and it is a draw. Nothing clear cut; let’s look at a couple of issues, and the great decider: DOLLAR$.

If George quits saying he has a job with a higher rate of pay, what are the options. If you grant a small increase, you have opened the flood gates through your entire company. Don’t believe, even for a second, that this will be kept confidential. I promise you George has told his buddy, and Buddy told six people. If you give in to George, five out of the six will be in your office within a week or two.

If George’s offer is for real, does the other company offer the same total package that you do? $20 a week can be a lot, but if George is losing a 401K, or a better sick day policy, or education pay-back, then you should remind George of this. (You should make it a point to learn the programs of your friendly competitors. If you tell them yours, will they tell you theirs? Most will!) If you have better programs, and George didn’t understand, maybe you will salvage him without paying more.

A short interruption—most employees of just about every company, don’t fully understand their benefits. In my consulting, one of the first things I do when meeting employees is to have them tell me about their benefits package. It is always a shock to ownership that they pay for benefits and the employees don’t use or know about them. Since you are paying for the benefits, make sure to teach your employees how to use them. Most employees who are new to the US workforce don’t know how to use medical insurance, or what a 401K is. Here is a Paul Promise–teach your employees how to use your benefits, and what the value of these benefits are, and you will have happier employees at no increase in costs.

If George still thinks the $20 a week is more important, do you want to give him the raise, while you look for his replacement? Is it better to keep him working? My opinion–Don’t do it. The morale of the rest of the company will go down, you will be inundated with the same request, and just after you do give the raise to everyone, three months later, it will start all over again!

Let’s look at unemployment costs. If George doesn’t get the raise, and quits, you must fight his unemployment. (What–his other job didn’t come through???). If you wait a month, find his replacement and let him go on your terms, then you will be paying the unemployment, and paying, and paying.

What if you tell George you were planning to give him a raise, and you will move the date up to now? Even if this is true, you will hurt the company by using this. Every one will be in the next day asking about the raise, and are they getting one? This is just about the worst answer to give.

George isn’t stupid…he has come to you just after someone retires, or has an injury, or has quit to open his own business. George feels he has you over a barrel. In this case, clearly, let him move on to his greener pastures. Yes, you will be out of sorts for a couple of weeks, but in the long-run, it is worth it.

If George tries to get you to bump him up, and you do, don’t be surprised if he still goes. George will probably go back to his job offer, tell them you met his demand, and will they continue bidding to keep him. It is much easier for them to change his starting salary then for you to issue a company disruptive raise. George is playing both sides, and you will always lose if you play this game with him.

There are many more variations of this gamble. If George is a good employee, instead of just granting a raise, give him extra responsibilities or extra hours so he earns more. Give George a goal, like getting a CDL, or learning how to cut heavy glass, and give him a raise after he meets this goal. If George comes to you asking how he can earn more, find a way to do this. If George says pay me more for the same amount of work, say “Goodnight George.”