According to my experience in 90% of cases when the standard methods of motivation, money related or not, do not work, this means that the line manager has already grown out of his or her job.
First of all, you need to understand that this is not that issue of the material side of motivation but it's the manager’s desire to become more independent and autonomous, to not feel controlled by the senior management. It is even more about realizing "personal project" and ideas so that eventually the manager could clearly see the results of his or her hard work.
Unfortunately, these managers ultimately become "a loss" for a company in the sense that sooner or later they will go to participate in larger and more serious projects. The desire to grow and develop is an absolutely positive state of a regular person.
But if the line manager has not yet left the company and his or her superior has just begun to notice a decrease in the efficiency, there are several ways to stop the manager from leaving.
In my company, where I was the Chief Operations Officer, we had a similar manager. I could not offer him a promotion because the next in line for him was my position. He thought about leaving and nurtured plans to open his own business, but the fear of full responsibility and the unknown stopped him. That’s why I decided to give him the most independence possible: the opportunity to be not just one of the company’s units, but became an independent personality in our business. He was given a whole department, for which he was fully responsible. Since I delegated full authority over the department, all the final decisions about its activities were always his responsibility.
If you really hold on to such an employee and the company really needs him or her, you can even create a special position, making him or her, for example, a business partner. And maybe also give the manager a certain partner’s percentage of the company's gross margin.
So this decision of mine led to the fact that this manager remained with me for a long time. He was really involved in the company’s activities and well motivated. However, it has to be understood that sooner or later you will still have to let these people go. And even if your will be able to hold him or her for a while helping to become independent and gain the necessary experience, this time, will not last long.
My partner eventually matured enough to open his own business and left the company.