how can we respond to an employee who won't stop asking for a raise?

A reader writes:

I have an employee who has been with us since 2008 in our small municipality (read: no money) who is constantly dissatisfied with his salary. He has gone to his manager (who is now on maternity leave), his acting manager, and the manager of HR (behind his manager's back) several times about a raise. I'm the HR assistant and now current acting HR manager.

We're at the point now where his manager has gone above and beyond, and worked with our employee to explain some options for him - setting goals, learning new skills related to an Engineering Coordinator role (which we do not have staffed right now because of budget cuts), and upon the successful completion of these goals, a step increase within his range.

The employee however, is constantly compiling job ads from other private and public organizations, and requesting/demanding that his job be in a higher pay grid.

Trying to explain "total compensation" hasn't worked - he just sees that other organizations are paying more than we are, and since we're a small municipality, there isn't any room to all of a sudden get a new pay range passed through our Council just because he thinks he's underpaid.

The last straw was an email on Friday, where he emailed me asking for his job description, and that of the (vacant) Engineering Coordinator, and that "his job description needed to be revised to include some of the Engineering duties" - without any discussion or consent from his manager, and his role/experience does not have any of the requirements to be an Engineering Coordinator.

What do we do? I'm by myself in HR, all of his managers have had it with him, and I've said to him off the cuff that since he knows for sure that there will be no new salary range for his position, then he is more than welcome to go to another job which will pay him what he thinks he deserves.

His current manager has even offered to look into supporting the employee going back to school to get an Engineering designation, if he wants to become an Engineer, but his attitude is that he's already doing the job, so why isn't he getting paid for it?

He doesn't get it, he wants to stay, but he's causing stress and strife among his department, and is frankly, a pain in my ass. Do you have any advice on how to handle this? 

Someone -- ideally his manager -- needs to sit down with him and say, "Bob, I've made it clear to you what your options are for getting a salary increase. Those are the only options. If you complete them successfully, we will consider a salary increase. We will not consider one otherwise. I need you to hear me on this, because you have continued to raise this despite clear answers, and it's become a distraction from our work. This is what we are willing to pay you. It is your prerogative to choose not to accept that salary and to look elsewhere, but we will not be having this conversation over and over anymore. If you decide this salary isn't acceptable, let me know and we'll talk about your transition out of the role."

You say that you've said this to him off the cuff. Someone needs to say it more formally, with explicit direction that it can't continue.

I want to be clear, of course, that I'm not saying that employees asking about salary should be routinely shut down. The issue here is not that the guy has pushed for a higher salary -- it's that he's been given an answer, repeatedly, and is just refusing to accept it. His manager needs to spell it out for him that the answer is not going to change. And you all need to get clear on the fact that just because someone refuses to accept your answer the first five times you give it, you don't need to keep having the conversation over and over; there's a point after which you can say, "No more. We've already discussed this, and you've been given a clear and honest answer."

As a side note, I'm assuming that in general your salary structure is working for you, and that you're not having trouble attracting and retaining good people. If that's not the case, it's worth looking at your salary structure as a whole, and seeing if it needs to be updated. But even if that's the case, this guy has still handled this poorly. Speaking of which...

As a second side note, the way he has handled this situation (particularly the part about directing you to change his job description when he hadn't even talked to his manager about it) makes me think that there's no way this kind of bad judgment isn't present in other aspects of his work too. I'd be curious what his manager's take is on that.