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Promotion and


Promotion and Demotion
Advancement within an organization is
ordinarily labeled as ‘promotion. It is an
upward movement of an employee from
current job to another that is higher in
pay , responsibility , status and
organization level. A mere shifting of an
employee to a different job which has
better working hours , better pleasant
working conditions does not imply
promotion. The new job will be
promotion only if entails increased
responsibilities an enhanced pay.

• According to Scott and Spreigal:

“A promotion is the transfer an
employee to a job that pays more
money or that enjoys some
preferred status.
• Flippo: “A promotion involves a
change from one to another that
is better in terms of status and
Purpose of Promotion

• Promotion are generally given to

achieve the following purpose :
 To put the employee in a
position where he will be of
greater value to the company .
This will imply , utilizing the
employee skills and knowledge at
the appropriate level in the
organization hierarchy resulting in
organizational effectiveness and
 To develop competitive spirit and zeal in
the employees to acquire the skill and
knowledge etc. required by higher level
 To develop internal source of employees
ready to take jobs at higher levels in the
organization . To promote employee self-
development and make them await their
turn of promotions . It reduce labour
turnover .
 To build up morale , loyalty and
a sense of belongingness on the
part of employees when it is
brought home to them that they
would be promoted if they
deserve it.
 To promote employees interest
in training and development
programmes and in team
development areas.
 To built loyalty among employees and
to boost their morale.
 To reward committed , loyal and
deserving employees.
 To create atmosphere among
employees a feeling of contentment
with their present working conditions
and encourage them to succeed in the
Promotion Policy

A sound promotion policy should be based

on the following principles:
 The promotion policy should be in
writing and must be understood by all
employees to avoid any suspicion
regarding line of promotion in the
minds of employee’s.
 Promotion programs should be closely
allied to training programs ; which
enables the employees to improve
themselves for promotion.
 The promotion policy should lay
down what percentage of
vacancies in higher levels of
hierarchy are to be filled up by
promotion and it should be
followed strictly .It is better
incorporate a statement of
management intention that
higher paid and better jobs will
be filled by promotion from
within , if possible , rather than
hiring from outside.
 The promotion policy should mention
the basis of promotion – seniority or
merit . A sound policy should be
based on both the consideration i.e.
seniority and ability.
 Job analysis decides the position of
the jobs and their relationship to
other positions. This should be
chartered to provide clear
recognition of the natural movement
from one job to another.
 A scientific procedure for evaluating
employee performance should be
followed . The assessment of the
employee and confidential repotting
should be objectives so that every
employee has a faith in the promotion
policy and is motivated for better
performance of work to get promotion.
 The supervisor or the immediate boss
should recommend the promotion
which is subject to approved by his
immediate superior in the line
 The promotion should contain a provision
for the challenge of a particular
promotion by the employee by the
employee or union within the limits of the
promotion policy to ensure fairness in
management decision.
 A vacancy should be notified to employee
in advance so that interested employee
may apply within a specified period. If
possible , the candidate should be
selected before job actually vacant.
Bases of Promotion

The well bases of promotion are : (1)seniortiy and

(1) Seniority means length of recognized service
in an organization , the senior most person in
the lower grade shall be promoted as and when
there is an opening in the higher position. The
logic behind considering the seniority as basis
of promotion is that there is positive correlation
between the length of job and the amount of
knowledge and the level of skill acquired by an
employee in the origination.
Advantages of seniority
Easy to measure the length of
Trade union generally emphasis
on seniority
Security and certainty is also
plus point
Minimize the scope of grievances
and conflicts
Reducing labour turnover
Disadvantages of seniority
It is not necessary that
employees learn more with
length of service. The employee
may learn up to a certain age,
and learning capabilities may
diminish beyond a certain age.
Demotivates the young and
more competent employee
Kills the zeal and interest for
self development
(2) Merits

Merit means ability to work . It denotes

an individual employee’s skill,
knowledge, ability , efficiency and
aptitude as measured from educational
, training and past record . If the merit
is adopted as basis of promotion the
most person in the lower grade , no
matter his junior most in the company,
shall be promoted. It encourage all
employee to improve their efficiency.
Advantage :-
The skill of an employee can be better
utilized at a higher level. It results in
maximum utilization human resources
in an organization.
Component employee are motivated
to exert all their energies and
contribute to organizational efficiency
and effectiveness.
This system continuously encourage
the employee to acquire new skills ,
knowledge etc. for all around
Disadvantages of Merit

Measuring merit is not always

The techniques of merit
measurement are subjective
Many employee , particularly ,
trade unions distrust the
management’s integrity in judging
Demotion is just opposite to promotion. In
demotion, the employee is shifted to a job
lower in status , grade and responsibilities .
“Demotion refers to the lowering down of
status, salary and responsibility of the
Dale Yoder," Demotion is the shift to a
position in which responsibilities are
decreased. Promotion is , in a sense, an
increase in rank and demotion is decrease
in rank.”
Cause of Demotion
Inadequacy on the part of the
employees in terms of job
performance, attitude and
capability . It happens when an
employee finds it difficult to meet
job requirement standards,
following his promotion.
Demotion may be used as
disciplinary tools against errant
Due to adverse business conditions
If there is a mistake in staffing i.e.
a person is promoted wrongly.
Change in technology, method
and practices
Due to ill health or personal
Demotion Policy
Demotion is very harmful for the
employees morale. It is an extremely
pain for action, impairing relationships
between people permanently. While,
effecting demotions, a manager should
be extremely careful not to place
himself on wrong side of the fence. It is ,
therefore, very necessary to formulate a
demotion policy so that there may be
no grievance on the part of the trade
Yoder,Heneman and Stone have
suggested a five fold policy in this
A clear list of rules along with
punishable offences be made
available to all the employees.
Any violation be investigated
thoroughly b a competent
In case of violations, it is better to
state the reasons for taking such a
punitive step clearly and
Once violations are proved, there
should be a consistent and
equitable application of the
There should be enough room for
the review.