Remunerate retained staff? That's a travesty! (6)
I believe the answer is:
parody
'a travesty' is the definition.
('parody' can be a synonym of 'travesty')
'remunerate retained staff?' is the wordplay.
'remunerate' becomes 'pay' (I've seen this before).
'retained' means one lot of letters goes inside another.
'staff?' becomes 'rod' (I've seen this before).
'pay' going around 'rod' is 'PARODY'.
'that's' acts as a link.
(Other definitions for parody that I've seen before include "Humorous misrepresentation" , "Comic imitation of, say, well-known literary style" , "Takeoff" , "Send up" , "Travesty" .)