I was reading a post on Jay Goltz’s Boss School Blog entitled “Don’t Let the Door Hit You?”
about employees who come to you and say they are leaving because they
have a better offer somewhere else.  The question he poses is this:  do
you let them go or do you negotiate?  I really enjoyed reading the
comments to the post (as much as the post itself.)  About half of those
who made comments thought with the high cost of recruiting and training
new employees, the best thing was to open negotiations to keep the
current employee.  The other half thought that if they were in a
position where they were looking for another job, it would be best to
just let them go.

How do you feel?  I feel strongly about this one.  I always wish
them well and start looking for their replacement.  I always create an
open, honest business environment — one where people are free (and
comfortable) to come to me at any time and discuss their situation
(whether it be salary, responsibility, etc.)  If they think the best
way to negotiate a raise is to try and hold me hostage with the specter
of another offer, they’re mistaken.

But I think the fact that managers are out looking for something
better (someone said in the comments that a recruiter had contacted
them, they weren’t looking.  But if they followed up on the recruiter’s
invitation, they were at least willing to look,) says that something’s
wrong in their existing situation.  Somewhere, they have an issue with
how things are going in their current job / work environment.

I remember one business I went into where all the managers “had
received other (better) job offers” and how they were thinking about
leaving the company.  Apparently our benefits were sub-standard (they
weren’t,) our pay was too low (it wasn’t,) our environment wasn’t
“worker-friendly” enough (it was,) and they didn’t really think they
could possibly stay.

I suffered through that whole load of grief for about three weeks
until I’d finally had enough.  I called a meeting of the managers and
let them know that each of them was required to interview with at least
three other companies in the coming two weeks.  I wrote each of them a
letter of recommendation and wished them the best.  The final
requirement was that after the three interviews, they meet with me
individually and let me know they were leaving, or commit to me to get
on with life in our company without looking back.

Long story short, not one manager left.  When push came to shove,
all the talk about other job offers was a smokescreen for what they
really wanted — they wanted to make changes here.  They really weren’t
looking to leave (or they would have already gone.)  They just wanted
to see some change.

Well, we talked about the proper way to instigate change (by being
open, honest and up-front,) and how to share those thoughts in a way
that allowed us to talk about things rationally, not emotionally.  And
we also talked about how the grass isn’t always greener.  (In fact, we
made it an ongoing requirement that every manager interview for at
least three jobs every year, with the same reporting requirements. 
Those were the happiest managers I ever worked with.)  The truth is,
every business has it’s shortcomings.  Every job has tasks you don’t
like (that’s why they call it work.)

The question you need to ask yourself is, can you with with the
shortcomings and the tasks you don’t really like?  If you can, then
stay.  If not, then go.  Plain and simple, cut and dried.  But don’t
come in waving job offers from our competitors to try and further your
agenda.  In my businesses, I never negotiate with those people.  I see
them as people who haven’t yet learned how to address their concerns in
an adult fashion.  Perhaps that judgmental, but that’s how I see it.  I
refuse to let anyone hold me hostage.

Please don’t misunderstand.  I’ll negotiate in good faith with
anyone.  I’ll give anyone the benefit of the doubt.  I’ll bend over
backwards every time to keep good employees.  I’ll look at creative
solutions to real or perceived problems.  I’ll give more leeway than
almost any manager I’ve met.  But I will not — under any circumstances
— be held hostage by anyone.

If you find yourself being held hostage, think about having your
managers look for something else.  I know some people who are afraid to
have their employees out evaluating what else is out there.  I’d say
that’s their first indicator that what they’re doing is flawed.  If you
provide fair compensation, a good work environment, appropriate levels
of autonomy and responsibility, plenty of opportunity for growth, why
would anyone leave your employ?

More importantly, if one of your managers is willing to leave so
easily, you can rest assured you’re not getting the kind of performance
from him / her that will be necessary to get your business to the next
level.  You are probably going to be better off finding someone who
will give you their heart and soul.

It’s like my dad always used to say:  “We have vast plans, but we’re
only getting a half-vast effort.”  You’ll never realize your dreams
with that kind of effort.