Counter offers may be used to retain individuals in their current positions. Counter offers may be made in response to a competing job offer within the University or from another employer. The University of Iowa developed some guiding principles that should be referenced when considering a counter offer.

• Counter offers are typically used in an attempt to retain high-level performers in hard-to-recruit for and/or highly specialized positions.
• Counter offers to retain individual employees should include an analysis of similarly situated employees in the department, college and/or division.
• The level and responsibility of the current position, and the level and responsibility of the new position should be considered when determining an appropriate amount of the counter offer.
  • If the new position is at the same pay level or similar level of responsibility, the counter offer can generally match the new salary offer.
  • If the new position is at a higher pay level or increased level of responsibility, there will normally be a discount applied to account for the increased level of responsibility for the new position.  These situations are infrequent, and it is recommended that the amount be discussed with University Human Resources prior to a counter offer being made.
  • If the new position is at a lower pay level or decreased level of responsibility, the counter offer can generally match the new salary offer.  These situations are very rare, and it is recommended that the amount be discussed with University Human Resources prior to a counter offer being made.
• There must be some evidence that an offer was made in order to provide a counter offer.  This is usually in the form of a written offer.  There are circumstances where the offer is verbal and this must be documented by the department requesting the counter offer.

Internal Counter Offer Below or Within Median Zone of Current Position

1. Hiring department determines salary offer based upon practices outlined under Salary Upon a Competitive Hire of an Internal Candidate.
2. Hiring department makes a salary offer not to exceed the median zone.
3. Employee's current department has the flexibility to make a counter offer up to the hiring department's salary offer, with prior approval at the org level.
4. Neither the employee's current department nor the hiring department can offer more than the hiring department's original salary offer. (no bidding wars)
5. Employee determines if they want to accept the hiring department's offer or accept the counter offer to remain in current position and department.

Internal Counter Offer Above the Median Zone of the Current Position

1. Hiring department determines salary offer based on practices outlined under Salary Upon a Competitive Hire of an Internal Candidate.
2. Employee's current department has the flexibility to make a counter offer up to the hiring department's salary offer, with prior approval by University Human Resources.
3. Neither the employee's current department nor the hiring department can offer more than the hiring department's original salary offer. (no bidding wars)
4. Employee determines if they want to accept the hiring department's offer or accept the counter offer to remain in current position and department.

External Counter Offers

1. Current department is provided an offer letter or original e-mail from an authorized representative of the competing external employer.  There are circumstances where the offer is verbal, and this must be documented by the department requesting the counter offer.
2. Employee’s current organization and department determine if a counter offer will be made. Counter offer amounts may be made up to the maximum of the median zone with org approval; any counter offer above the median zone must be approved by University Human Resources.  No counter offer may exceed the amount of the external offer unless there are additional recurring compensation elements that are part of the external offer.  In the event that additional compensation elements will be used to provide a counter offer that is in excess of the external salary offer, University Human Resources must be consulted to help determine an appropriate amount of the counter offer.
3. The department can negotiate with the individual, offering up to amount approved by the org/University Human Resources.
4. Employee determines if they want to accept external offer or internal counter offer.
5. If external offer changes, the same process for approval of the salary rate (described above) will still apply.

Effective date is the day the staff member would have started in their new position.  If the external start date is not known, or there is a justification to use an alternative date, the department may request an appropriate date for the counter offer to be effective.  The effective date cannot precede the date that the employee received the offer.