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Loyalty vs. Performance: A Difficult Promotion Decision

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Loyalty vs. Performance: A Difficult Promotion Decision

Imagine this: you’ve got a promotion to fill. 

Do you go with the loyal employee who’s always been there, even if their performance is just okay? 

Or do you pick the rockstar performer, knowing they might be out the door in six months? 

It’s a tough call, and it’s one HR and business leaders face all the time. 

In this post, we’re getting real about those hard decisions. 

We asked top leaders how they approach this dilemma, what factors they consider, and how they balance the need for great performance with the value of loyalty (and the cost of losing someone good!).

Read on!

Chris Giannos
Co-Founder & CEO, Humaniz

Promote Leadership Potential And Adaptability

The decision to promote a loyal but average performer over a high-performing employee who may leave depends on the long-term impact on the team and the organization.

While loyalty is valuable, a promotion should be based on leadership potential, adaptability, and the ability to drive results rather than tenure alone.

If the high performer is a strong cultural fit and contributes significantly to business success, efforts should first be made to retain them by addressing their career growth needs.

If they’re leaving due to a lack of advancement opportunities, a promotion could be a strategic move to keep them engaged and invested in the company.

However, if their long-term commitment is uncertain despite these efforts, promoting someone else who consistently supports team stability and growth might be the better choice.

Loyalty alone doesn’t justify a promotion, but if the average performer has demonstrated leadership qualities, the ability to develop skills, and a strong influence on team morale, they may be the better long-term investment.

The key is to ensure that any promotion aligns with business goals, maintains team motivation, and strengthens leadership without compromising performance.

Noah Musgrove
HR & Marketing Specialist, Liberty Financing LLC

Balance Performance And Long-Term Stability

When deciding between promoting a steady, loyal employee or a high performer who may leave, it is important to weigh both long-term and short-term stability impacts.

A top performer brings strong results, but if they decide to leave early the organization could face disruptions in workflow, morale, and overall team cohesion.

On the other hand, a reliable, consistent employee may not stand out as much in terms of performance but offers dependability and a stronger likelihood of long-term contribution.

The best choice depends on the company’s priorities and the potential for growth in each individual. If the high performer is open to staying with the right support, offering career development or incentives might make sense.

However, if their departure is likely, investing in the loyal employee’s growth and leadership skills can provide long-term stability.

It’s all about striking the right balance between immediate performance and sustainable success!

Vasilii Kiselev
CEO & Co-Founder, Legacy Online School

Balance Performance And Retention Strategies

When it comes to promoting a loyal average employee versus a high-performing potential flight risk, it all comes down to long-term strategy.

At Legacy Online School, we value performance and loyalty equally, but also recognize that every employee has his or her own unique set of strengths to bring to the table.

In this case, I would prioritize the high-potential flight risk performer first, with some major caveats.

The reason is simply this: performance drives results. A top performer is one who can potentially have an immediate and substantial effect on the organization’s growth.

That said, this does not mean loyalty is irrelevant–it most definitely is. Loyalty, however, can be cultivated and nurtured.

The strategic thought behind this is to sit down with the high performer and discuss their career path, hear their concerns, and find out how we can match their aspirations with the company’s aspirations.

If we can retain top performers while providing them with the right opportunities, the ROI will be tremendous.

On the other hand, a loyal average performer can add cultural value but not necessarily move the bottom line in terms of results. The business would then be missing out on growth opportunities.

What really matters, ultimately, is a balance between retention and performance strategies–because performance, though a possible game-changer, is transient, while loyalty can be nurtured and developed with a good strategy.

Alex Cornici
Writer, Cheap Places To Go

Assess Performance And Company Needs

Promoting an employee involves a mix of assessing their current performance, potential for growth, and overall impact on team dynamics.

If faced with choosing between a loyal, average performer and a high-performer who might leave the company, the decision isn’t just about their individual contributions.

The loyal employee’s consistent performance provides stability and can be crucial for maintaining a cohesive team environment. However, their average performance might limit the company’s growth potential, especially in roles that demand high innovation or technical skills.

On the other hand, a high-performing employee often drives significant improvements and results, potentially bringing more value to the company in the short term. Yet, the risk of them leaving could result in a disruptive gap, especially if they occupy a critical role.

This decision depends greatly on the specific needs and strategic goals of the company; for instance, if a business is navigating through a critical transformative phase, the high performer’s cutting-edge skills might be indispensable.

Ultimately, the choice could also reflect on the company’s culture and values, possibly influencing future recruitment and retention.

Carefully weighing these factors will guide a decision that supports not only immediate needs but also long-term stability and growth.

Aviad Faruz
CEO, FARUZO

Align Promotion With Company Goals

The decision to promote a loyal yet average performer over a high-performing but potential flight risk depends on the long-term strategic goals, team stability, and leadership needs of the organization.

While performance is critical, leadership roles require reliability, cultural fit, and commitment–qualities that an average but loyal performer may bring, while a high-performer at risk of leaving might not.

If the role is high-impact and requires immediate results, promoting the high performer with strong incentives and a clear career growth plan might be the best move to retain them and maximize short-term success.

However, if the role demands long-term team stability, mentorship, and cultural reinforcement, then promoting a steady, loyal employee could provide more lasting value, even if their individual output isn’t exceptional.

A strategic middle ground could be tailored retention efforts for the high performer, such as a stretch assignment or leadership training, while investing in skill development for the loyal employee.

Ultimately, promotions should be based on a combination of performance, leadership potential, and alignment with the company’s future goals–not just immediate output or tenure.

Michael Kazula
Director of Marketing, Olavivo

Assess Impact On Team Dynamics

Choosing between promoting a loyal but average performer and a high-performing employee at risk of leaving is complex.

Promoting loyalty fosters a positive culture and reduces turnover, enhancing team stability.

However, the potential loss of a high-performer could disrupt projects and knowledge flow.

Each option requires careful assessment of how they impact team dynamics and the company’s long-term objectives.

Rob Clegg
Senior SEO Manager, Exclaimer

Promote Based On Merit And Transparency

In any company, the most essential way to manage expectations is to create a culture that’s based on merit and transparency.

When someone is offered a promotion, it should be obvious to everyone why the person was chosen, which achievements and what skill set recommends them for the promotion.

Resentment happens when employees feel like they are owed a promotion based on tenure alone, which should not be the case.

If someone has not showcased any interest in expanding their responsibilities, leading the growth of the business, there is no reason they should be promoted.

This is what employees need to understand and where transparency can have such a huge impact, effectively communicating what a promotion requires.

It will automatically create a natural selection, where many employees will not want the added responsibility for the increased reward and will develop an appreciation of those who do.

Anna Blood
Founder & Managing Attorney, Blood Law PLLC

Prioritize Internal Promotions And Growth

When a company grows rapidly, I believe it’s important to prioritize promoting from within.

As a business leader, I want to reward and recognize my existing team for their hard work and leverage their knowledge and experience.

If multiple qualified individuals are interested in a promotion, consider factors such as their performance, potential for growth, and their long-term goals.

Transparent communication is key to ensuring that everyone feels valued and understood, even if they don’t get the promotion.

It’s also crucial to avoid overwhelming employees with excessive responsibilities.

If someone is promoted, ensure that their previous role is filled to maintain productivity and prevent burnout.

Kate O’Sullivan
Founding Partner & Executive Coach, CoachSelect

Reward High Performers Without Management

This is a common situation, and I often hear companies worrying about what to do when they have a high performer and no leadership position to promote them to.

However, companies are overlooking the reality that not everyone wants to be a people manager.

In fact, I hear it all the time– I want to progress in my career, but I don’t want to manage a team.

So a great solution is for companies to think of ways for high performers to expand their impact without leading a team. This could be through leading high-profile projects, giving them more autonomy on what work to pursue, or increasing the scope of their responsibility.

Another key consideration is that high performers want to be rewarded for their hard work, which means compensation has to be a part of the retention conversation. If the only way to reach a certain salary level is to become a people manager, companies will inevitably lose top talent.

Make sure that compensation is aligned to the incentives of achieving team and company goals.

If high performers know what their expectations are, are incentivized by fair and competitive compensation for their efforts, and are a part of open conversations about career progression, you have a recipe for keeping top employees retained and engaged.

Levi Hemingway
Co-Founder, City Storage By Nomad Capital

Prioritize Consistency And Team Stability

At City Storage USA, promoting a loyal yet average performer over a high-performing but potential flight risk would depend on the long-term impact on the business.

Just like in storage, where long-term occupancy and stability often outweigh short-term gains, we prioritize consistency, reliability, and growth potential when making leadership decisions.

One key consideration is cultural fit and team stability.

A loyal employee who embodies our values, supports the team, and is invested in the company’s mission may be a better long-term leader than someone who delivers top results but is disengaged or likely to leave.

Leadership is about more than just numbers–it’s about trust, collaboration, and the ability to motivate others, much like how a well-managed storage facility thrives on strong customer relationships rather than just maximizing unit rentals.

However, performance cannot be ignored.

If the high performer has the potential to stay with the right incentives, we would explore ways to retain them, such as offering professional development opportunities, customized incentives, or leadership training.

If they remain a flight risk despite these efforts, promoting a steady and dependable team member who is willing to grow into the role may ultimately be the smarter choice for long-term stability and business continuity.

The HR Spotlight team thanks these industry leaders for offering their expertise and experience and sharing these insights.

Do you wish to contribute to the next HR Spotlight article? Or is there an insight or idea you’d like to share with readers across the globe?

Write to us at connect@HRSpotlight.com, and our team will help you share your insights.

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The Art of Retention: Negotiating with a  Top Performer Considering Another Offer

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Tony Deblauwe - Terkel HR Spotlight

The Art of Retention: Negotiating with a Top Performer Considering Another Offer

The moment a top performer discloses a competitive job offer, a delicate negotiation begins. 

The outcome of this negotiation can have significant implications for the organization, impacting productivity, morale, and overall success. 

In this post, we introduce you to the art of retaining top talent in the face of competitive offers. 

We gathered insights from experienced HR and business leaders, asking them to share the urgent retention strategies they rely on for successful negotiations. 

Their responses offer a valuable perspective on how to approach these critical conversations, craft compelling counteroffers, and ultimately, convince your most valuable employees to stay.

Read on!

Dandan Zhu
Founder, CEO, DG Recruit

Understand Employee Motivation

Whenever counteroffer opportunities arise, the risks on both sides are significant.

Here are some factors to consider:

Why is the employee choosing to leave?: 

Besides the financial end of things which I’ll dive into shortly, THIS is the core issue to understand.

If the core issue of WHY the employee wants to leave is resolvable, a counteroffer endeavor would be worth exploring.Not only does the issue have to be resolvable, the solution needs to be SUSTAINABLE.

Many companies throw up a hail Mary to salvage the employee in the short term. THIS is why we have an industry average of 6-12 months of the employee quitting again.

To mitigate this risk, the employer has to have an honest discussion around their ability to resolve the employee’s RFL (reason for leaving) for longer periods of time.

Is it a money grab effort or a sincere financial adjustment?

Money matters and that’s a fact. Nobody goes to work for fun!

That said, is the financial ask reasonable per market rates or is the employee leveraging external factors to enrich themselves unreasonably and opportunistically?

How badly does the employer want to retain the departing employee?

If this person is a once-in-a-lifetime top performer, serious considerations need to be had because their departure could be detrimental to the wider team.

However, if the top performer possesses a terrible personality that is tolerated, how much should the employer fight to keep them on?

In Conclusion

Counteroffers, as much as people advise against them, happen in the real world – surprisingly more frequently than people think.

Handling them is an art. How you decide to proceed is either going to save you tens of thousands of dollars or COST you that amount (or more!).

Of course, replacing staff is never cheap – resources, both internal and external, along with losing effectiveness, getting behind on projects, opportunity cost, etc add up to a monstrous level quickly.

Often, counteroffers are a legitimate way to make the best out of a bad situation.

As attractive as that potentiality is, counteroffers could also fail within short order as employers find their staff leaving again in 6 months’ time in which they’ve now spent more money just to lose, yet again!

Facing both possibilities, both sides need to be as honest as possible about the issues they’re facing to reach a happy medium.

Otherwise, walking away, while painful in the short term, ultimately is the right decision.

Tony Deblauwe - Terkel HR Spotlight

Tony Deblauwe
Global HR Leader

Focus on Long-Term Engagement

When a top performer discloses a competitive offer, the key is to approach the conversation strategically rather than reactively.

Retention isn’t just about counteroffers–it’s about understanding why they’re considering leaving in the first place and addressing their long-term engagement.

The first and most important step is to listen.

Too often, leaders assume money is the sole driver, but in many cases, it’s about career growth, leadership, work-life balance, or a combination of factors.

If compensation is the only issue, matching or exceeding an offer might work, but if deeper concerns exist, simply increasing pay won’t create lasting retention.

Once I understand their motivations, I focus on three core areas: career acceleration, compensation, and executive alignment.

If career growth is their main concern, I explore ways to fast-track development opportunities, such as placing them on high-visibility projects, expanding their scope, or providing direct access to senior leadership.

High performers stay where they see a compelling future, and organizations that proactively create those pathways are far more likely to retain their best talent.

If the offer is significantly higher in compensation, I look beyond base salary to consider equity, retention bonuses, or performance-based incentives.

While competitive pay matters, top performers also want to feel valued in ways beyond their paycheck.

Beyond money and promotions, engagement often comes down to whether an employee feels truly seen and valued by leadership.

A direct conversation with an executive about their impact and future within the company can make a significant difference.

High performers want to know their work is recognized at the highest level, and sometimes, meaningful recognition and influence matter more than a salary increase.

Ultimately, the goal isn’t just to win this negotiation–it’s to ensure they don’t feel the need to explore external offers again in six months.

If the gap between what they want and what the company can realistically offer is too wide, a respectful and well-supported transition is better than a desperate counteroffer.

Real retention strategies start long before a competitor comes knocking.

When companies proactively create an environment where top talent sees a clear, compelling future, retention conversations become far less frequent.

Mohammed Kamal
Business Development Manager, Olavivo

Tailor Offers to Priorities

When a top performer receives a competitive job offer, immediate retention strategies are vital for negotiation.

Begin by understanding their motivations, such as salary, career growth, work-life balance, or company culture.

For example, a tech firm retained a key software engineer by having an open dialog about their reasons for considering the new offer, ultimately leading to a tailored counter-offer that addressed their priorities.

Justin Abrams
Founder & CEO, Aryo Consulting Group

Address Needs Quickly

It’s a sign you need to act fast. You don’t know exactly what’s driving their decision, but you do know that if you don’t address it, you risk losing a key team member.

Start by having an open conversation to find out if it’s about salary, career growth, or something else.

If it’s about money, consider matching or improving the offer, and if it’s about career opportunities, show them how they can grow within your company.

It’s not just about salary; think about what your company offers beyond pay, like flexibility or career advancement. Highlight these benefits to show that staying with you offers more than just a paycheck.

Ultimately, moving quickly and offering real value can make the difference between retaining or losing your top performer.

If you can address their needs, they’ll likely stay. But if not, you’ll have valuable insights to improve your future retention strategies.

Kerri Roberts
Founder & CEO, Salt & Light Advisors

Analyze Employee Data

Context is key in this conversation.

Has there been frustration in the past shared by this employee? Did you know they were potentially looking for another role?

Is there conflict between the employee and a colleague? Did they ask for increased responsibilities or an increase in pay and were denied?

Whether this is out of the blue, or there was a known reason they were searching for another role, I would work with your HR team (or the person in charge of employee compensation to learn the following):

– What was the employee hire date (what is their tenure)?

– What pay changes have occurred during their tenure

– What did the last performance review show?

– Where are they paid in the position pay band (10th percentile, 25th, median, 75th, 90th)?

– If they are a top performer and there is room for pay growth, how much?

– What is your philosophy on one-time bonus payouts versus base pay increases?

Ideally, if they are a performer and a cultural fit, we work to salvage them.

However, don’t waste the chaos.

While it’s painful to replace an employee, when they share they have another offer, it’s a great time to breathe and ask yourself – could we draw a better card from the deck?

We don’t have to counteroffer everyone. It’s not always the right choice for the organization.

Sometimes we just wish them well. But, if they ARE a great performer and they DO shine in the culture, come prepared with the answers to my questions above, listen to their reasoning, and see what you can do to make it work.

Aviad Faruz
CEO, FARUZO

Offer Tailored Incentives

If a top performer discloses a competitive job offer from a competitor, my urgent retention strategy would focus on understanding their motivations, offering tailored incentives, and reinforcing long-term career value.

Instead of immediately countering with money, I would start with a one-on-one conversation to understand what’s driving their decision–is it compensation, career growth, work-life balance, or leadership concerns?

Once I identify the key motivators, I would take a customized approach to retention.

If compensation is the main factor, a competitive counteroffer combined with performance-based incentives (such as bonuses or stock options) could reinforce their financial future.

However, if the issue is career stagnation, I’d outline a clear growth plan with leadership opportunities, mentorship, or skill development.

If work-life balance is the concern, flexibility in schedule or remote work options could make a difference.

Beyond immediate retention, I’d reinforce their long-term value within the company, showing how their contributions impact our success and ensuring they feel recognized and challenged.

I’d also assess if the broader team’s retention risks need addressing, turning this into a learning opportunity.

The key to successful negotiation isn’t just matching the competitor’s offer–it’s making the employee feel like their best opportunities still exist within the company.

Susan Snipes
Head of People, Remote People

Discuss Growth Opportunities

If my top performer were considering a competitive job offer, I would find out what their main motivating factor was for considering the move.

If the main concern was career advancement, I would discuss possible career growth opportunities within my firm.

I would be open to creative solutions like offering a title change and more interesting projects. Additional training opportunities could also be provided.

If my top employee’s main concern was compensation or benefits-related, I would evaluate what changes could be made to my total rewards strategy. For example, maybe I could offer a retention bonus.

As long as I know the main driving factor behind them considering leaving, I can work with them and think creatively to come up with a retention solution.

Michael Kazula
Director of Marketing, Olavivo

Assess Affiliate Motivations

To retain top-performing affiliates facing competitive job offers, it’s crucial to understand their motivations through one-on-one assessments.

During these meetings, discuss their career goals, what they value in your network, and the appealing aspects of the new offer.

This personalized approach can help negotiate effectively and ensure affiliates feel valued and motivated to stay within your network.

Ambrosio Arizu
Co-Founder & Managing Partner, Argoz Consultants

Offer Various Incentives

To retain a key employee who has received an offer from a competitor, the urgent strategies I would implement are:

Recognition and appreciation: Show them how crucial they are to the team.

Example: “Your work has been essential to the success of project X, and without you, we wouldn’t have achieved these results.”

Competitive offer: Evaluate and improve their compensation package, including salary, bonuses, and benefits.

Example: “We are willing to increase your salary and offer you more benefits to match what they are offering.”

Professional development: Offer growth opportunities and new challenges within the company.

Example: “We would propose you lead the new project Y, which will be a great opportunity for your career.”

Flexibility and well-being: Offer improvements in work-life balance.

Example: “We can offer you more flexibility in hours and remote work so you can enjoy more time with your family.”

These actions demonstrate a genuine commitment to their development and well-being.

Alex Cornici
Writer, Cheap Places To Go

Reassess Employee Value

When faced with the dilemma of a top performer considering a competitive job offer, the priority shifts swiftly to reassessing and readjusting the value you’re providing them.

It’s essential to engage in a candid and constructive conversation to understand their professional aspirations and any possible dissatisfaction they might be experiencing.

During this discussion, highlighting their invaluable contribution to the team and forecasting their potential growth within the company can rekindle their alignment with your organization’s vision.

An effective retention strategy would include a competitive counteroffer that addresses not only monetary compensation but also opportunities for career progression, additional responsibilities, or flexibility, which might align better with their current life situation.

It can also be useful to personalize benefits, such as professional development resources, enhanced work-life balance options, or even equity stakes, depending on what resonates most with your employee.

Often, employees are looking for signals that the company values their contributions and is actively investing in their future.

In the end, demonstrating a clear path of growth and fulfillment within the company can be a powerful motivator for an employee to stay and grow with the team.

The HR Spotlight team thanks these industry leaders for offering their expertise and experience and sharing these insights.

Do you wish to contribute to the next HR Spotlight article? Or is there an insight or idea you’d like to share with readers across the globe?

Write to us at connect@HRSpotlight.com, and our team will help you share your insights.

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