Published on February 22, 2012
Varun is about to leave his job. Fed up of the boredom and bad management, he has finally made up his mind and nothing can sway him. Just then the boss totters into his cabin brandishing an unbelievably flattering perk/bonus in his face. Unable to believe his luck, he immediately laps up the tempting bait. Alas, Varun has just shackled himself to the company with golden handcuffs.
Bewildered? Don't be. Organisations are increasingly offering lucrative benefits/payment/incentives over and above their regular pay packets in order to keep their best and brightest managers/executives from jumping ship. Essentially, they design an extremely favourable financial package that makes it worth their key personnel's while to stay on at least as long as the company can get a return on its investment in them. This can range from a fat bonus/pay hike, retirement fund contributions, stock options or low-cost loans to a posh car, paid sabbatical, health insurance or even education reimbursement plans. Basically anything that will make the favoured employee feel special.
Seems like a win-win for both parties as the executive is happy with the amazing rewards while the organisation gets to retain choice talent. But here comes the catch: the perquisite is directly linked to the employee staying with the company for a specified period of time. For instance, the stock options/savings plans are vested for a specific number of years, bonus is payable after a particular period and so on. As a top reward strategy planner elaborates, “Golden-handcuff arrangements are conditional usually on both performance and on the employee being in the position over the next three to five years”.
What's more, the employee is not spared a financial penalty as he is required to pay back the hefty reward (like insurance or other reimbursement) if he ‘dares' to leave prematurely. And this is what are ‘golden handcuffs' that effectively tie down the employees “Machiavelli style' to the company as they can no longer afford to leave!
In fact, the Macmillan dictionary defines golden handcuffs as “ways of trying to stop a senior manager in a company from leaving their job, by offering a lot of money if they stay and making them lose money if they leave…”
Watching out for yourself
It is quite obvious that the golden handcuffs arrangement can sure entice an employee to stay back, but he stands to lose big time later. Yet, employees are repeatedly seduced by the ‘golden' lure only to rue being chained to their employer later on.
So, before you say yes to the next tempting offer, think again. Are you really willing to lock yourself into a job you would rather leave and literally handcuff yourself to the organisation (with none but yourself to blame) for many years to come? You will have no choice but to stay so as to retain the ‘benefits' and the very thought of the ensuing financial pain will make you eschew other stellar opportunities. You will be slowly sucked into the trap as the handcuffs get tighter and bind you to a life of misery with no freedom in sight.
This may sound far-fetched but understand that if you are absolutely dissatisfied with your job or really abhor the company culture, will not the same stress/resentment/boredom/burnout surface again once the initial euphoria of the offer has died down. By chaining yourself to your current employment, won't you become a prisoner to something you don't want to do?
Therefore, it pays to dwell over your best career and life interests not just in the here and now but also over the long-term. Carefully weigh the pros and cons of your employer's offer and understand the fine print before making a decision either way. If it does provide significant benefit and will not adversely affect your career ladder, do go ahead. But if it only provides an illusion of security, it is advisable to steer clear of the ‘cursed' golden handcuffs. The transition phase is bound to be difficult, but it will be infinitely liberating as well!
Payal Chanania
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