CHAPTER 8

Employee
Movement
 EMPLOYEE TRANSFER
 One of the internal mobility of the employee is
transfer.
 It is lateral movement of employee in an
organization by the employee.
 A transfer involves the shifting of an employee
from one job to another without changing the
responsibilities or compensation.
 It can also be defined as a change in job within the
organization where the new job is substantially
equal to the old in terms of pay, status and
responsibilities.
…CONT’D
 Transfers of employees can possible from one
department to another from one place to
another.
 Transfer may be initiated by the organization or by
the employees with the approval of the organization.
 It can be also due to changes in organizational
structure or change in volume of work, it is also
necessary due to variety of reasons. But broadly can
be done either to suit the conveniences of
organization and to suit the convenience of
employees.
THE PURPOSES OF THE TRANSFER
 The transfer are generally affected to build up a
more satisfactory work team and to achieve the
following purposes:
 Toincrease the effectiveness of the organization.
 To increase the versatility and competency of key
positions.
 To deal with fluctuations in work requirements.
 To correct incompatibilities in employee relations.
 To correct, erroneous placement.
 To relieve monotony.
 To adjust workforce.
 To punish employees.
TYPES OF TRANSFERS
 Production Transfer: Such transfers are resorted to
when there is a need of manpower in one department
and surplus manpower in other department. Such
transfers are made to meet the company
requirements. The surplus employees in one
department/section might be observed in other place
where there is a requirement.
 Replacement Transfers: An employee with a long
service may be transferred in some other department
to replace a person with a shorter service.
 Shift Transfer: Transfer of an employee from one
shift to another.
…CONT’D
 Remedial Transfers: As the name suggest, these transfers
are made to rectify the situation caused by faulty selection and
placement procedures. Such transfers are made to rectify mistakes in
placement and recruitments. If the initial placement of an individual is
faulty or has not adjusted to work/job, his transfer to a more
appropriate job is desirable.
 Versatility Transfer: Such transfers are made to increase
versatility of the employees from one job to another and one
department to another department. Transfer (Job Rotation) are the tool
to train the employees. Each employee should provide a varied and
broader job experiences by moving from one department to another.
This is for preparing the employee for promotion, this will definitely
help the employee to have job enrichment.
 Penalty Transfer: Employee transfer from one’s place of
convenience to a far-flung and remote area is considered as a penalty
to the employee.
TRANSFER POLICY
• Every organization should have a just and impartial
policy concerning transfer of employee.
• Such a policy will help to avoid an ad-hoc and
arbitrary approach to transfer.
• Transfers should not be made frequently or without
justified reasons.
• Instead of deciding each case separately ,a policy
should be formulated to govern all types of
employee transfers.
 A GOOD TRANSFER POLICY SHOULD
INCLUDE THE FOLLOWING :
A. It should clarify the type of transfers and the condition under which
transfers will be made.
B. There should be specific authority which should initiate and implement
transfers.
C. The area of transfers should be specified. Whether these will take
place between sections , divisions, plants ,should be specified.
D. Indicate the basis of transfers – filling vacancies , accepting requests ,
administrative reasons etc.
E. Decide the rate of pay to be paid to the transferee.
F. Intimate the fact of transfer to the concerned person well in time .
G. Transfers should be writing and properly communicated to all
concerned.
H. Transfers should be minimum , not just for the sake of transfer.
 EMPLOYEE PROMOTION
“Promotion is the advancement of an employee to a
better job, better in terms of greater responsibility,
more prestige or status, greater skill and specially
increased rate of pay or salary”
-Pigou and Myers

“A promotion is the transfer of an employee to a job

which pays more money or one that carries some
preferred status”
-Scott and Clothier
PURPOSE OF PROMOTION
 To boost morale of employees
 To develop a competitive spirit among employees
for acquiring knowledge and skills required by
higher level jobs
 To retain skilled and talented employees
 To utilize more effectively the knowledge and skill
of employees
 Inefficient persons will feel demoralized when
efficient people are rewarded with promotions. So
the company can get rid of undesirable employee
 TYPES OF PROMOTION:
 Horizontal promotion:
 A promotion to a position of greater responsibility (and therefore
more compensation), but without greater managerial authority.
 For example, a travel consultant may receive a horizontal
promotion to senior travel consultant.
 Vertical Promotion:
A promotion to a position of greater managerial authority (and
therefore more compensation). For example, senior travel
consultant may receive a vertical promotion to business
travel manager.
 Dry Promotion:
 When promotion is made without increase in salary, it is called
‘dry promotion’.
BASIS OF PROMOTION
 Every organization has to devise
some criterion on the basis of which
promotion will be done. If promotion
is not based on some solid basis
then there will be resentment among
employees. On the basis of
SENIORITY and MERIT promotion
process can be employed.
SENIORITY AS A BASIS OF PROMOTION

 Seniority implies relative length of

service in the organization and is
counted from the date of his
joining the organization.
 This system is also based on the
tradition of respect for older
people.
 ADVANTAGES OF SENIORITY
AS BASIS OF PROMOTION
 It is relatively easy to measure
length of service
 System is simple to understand and
operate
 No favoritism
 Provides sense of satisfaction to
senior employees
 DISADVANTAGES OF SENIORITY
AS A BASIS OF PROMOTION
 Oldest is not always the ablest
 Demotivates and demoralize the
young employees who are
talented
 Kills ambition and passion to
improve performance
 Fails to attract young employees
MERIT AS A BASIS OF PROMOTION
 Merit implies the
knowledge, skills and
performance record of an
employee.
 ADVATAGES OF MERIT
AS A BASIS OF PROMOTION
 Motivates competent employees to
work hard and acquire new skills
 Helps to maintain efficiency of the

organization by recognizing talent

and performance
 Helps to attract and retain young and

senior employees in the organization.

 DISADVANTAGES OF MERIT
AS A BASIS OF PROMOTION
 Difficult to judge merit
 When young employees are
promoted over older employees,
the old and experienced people
may leave the organization.
 Old employees may feel insecure.
 SENIORITY-CUM-MERIT
A proper balance between the two
criteria can be created in several
ways:
A. Minimum length of service may be
prescribed
B. Relative weightage may be
assigned to seniority and merit.
C. Employees with a minimum
performance record and
qualifications are treated eligible
for promotion.
 PROMOTION POLICY
 A clear cut promotion policy is essential
for healthy industrial relations.
 The management and employees
should be clear about the criterion to
be followed for promoting employees.
 As discussed earlier promotion may be
based on either seniority or merit or
both.
 This is one aspect which a promotion
policy should incorporate.
 EMPLOYEE DEMOTION
 Demotion implies the assignment
of an employee to a job of lower
rank with lower pay.
 It refers to downward movement of
an employee in the organization
with lower status and lower salary.
 It affects the status, career and
income of the employee.
 CAUSES OF DEMOTION
 Breach of discipline
 Inadequacy of knowledge
 Unable to cope with change
 Organizational re-
organization
PURPOSE OF DEMOTION POLICY
 To provide directions on the
circumstance under which
an employee may be
demoted and procedure to
be followed in connection
there with.
SUCH POLICY SHOULD CONTAIN
THE FOLLOWING POINT :
 A clear–cut set of rules and regulation should be
prepared , the violation of which should attract
punishment like demotion.
 The employee should be communicated the grounds
which will attract action such as demotion .if the
employees are not informed of such an action then
they will resent such actions .

 There should be machinery to investigation the

violation of rules and regulation . The employee should
be given an opportunity to explain their conduct and
should state whatever they want in their defense.
..CONT’D
 For the violation , there should be
consistent and equitable action against all
employees . There should not be a pick and
choose of any.
 Demotion policy should have review
provision an action once taken may be
reviewed if situation so warrant.
 There should be provision for appeal to top
management.
 It should be open rather than a closed
policy.
 EMPLOYEE SEPARATIONS
OR EXIT
 Separation is a situation when the
service agreement of an employee with
his/her organization comes to an end
and employee leaves the organization.
 In other words, separation is a decision
that the individual and organization
part from each other.
REASONS
• Retirement :
–it’s a major cause of cause of separation of
employees from the organization. It can be define as
the termination of service of an employee on
reaching the age of superannuation.
1. Compulsory Retirement: This is the retirement
when employee retire compulsorily from service on
attaining the age of superannuation.
2. Voluntary Retirement: when organization give
option to its employees to retire even before
superannuation its called voluntary retirement.
VRS (Voluntary Retirement Scheme) or
Golden Hand Shake
…CONT’D
• Resignation
– Resignation is termination of service by an
employee by serving a notice called resignation
on employer.
– It could be voluntary or involuntary
• Layoff
– Layoff implies denial of employment to the
employees for reason beyond the control of
employer.
– Breakdown of machinery, seasonal fluctuations in
demand, shortage of power, raw materials, etc.
are the examples of reasons
…CONT’D
• Retrenchment
– Means permanent termination of an employee’s
services for economic reason.
– Retrenchment is a strategy to reduce companies
expense.
– It occurs due to the replacement of labor by
machines or the closure of the department.
• Dismissal
– Is termination of services of an employee as a
punitive.
– This may occur either on account of
unsatisfactory performance or misconduct
 Compensation plan,
Reward and Motivation
 Proclamation 1064-2017
 Proclamation 1156-2019
 Immense
Appreciation