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Forget stay bonuses

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by on
in Leaders & Managers,People Management

Here’s why stay bonuses are the worst kind of retention tool.

Say a company’s leaders failed to anticipate and prepare for problems and steer the organization through choppy waters. And they’ve failed to take responsibility.

So what do these leaders do? They open their trusty manuals and see that it costs more to hire new people than to keep the ones they’ve got. They grow concerned that the meltdown will lead to a talent drain. They think they can’t afford to lose talent. Then a stroke of genius strikes: stay bonuses all around!

Yes. Stay bonuses. Wonderfully large amounts of cash or stock to induce managers to stay. And of course they stay.

The stupidity here: You just paid big bucks to hang onto managers who ran your business into the ground.

Lesson: Instead of stay bonuses, invest in severance packages and hiring bonuses.


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