How Employee Promotion Works in Organization

Job change usually involves filling vacancies by the internal movement of the existing employees. These movements are usually of two types: promotions and transfers. Promotion means a change involving an employee moving to a position higher than the one formerly occupied.

His responsibility, status and pay also increase. The possibility of advancement often serves as a major incentive for superior managerial performance, and promotions are the most significant ways to recognize superior performance.

However, there are promotions which do not give rise to any increase in the employee’s pay.

Such a promotion is called ‘dry’ promotion which is usually made decorative by giving a new and longer title to the employee. Employers generally get rid of their incompetent employees by giving them such decorative promotions.

In many companies only vertical promotions are made under which the employees are promoted from one rank to the next higher rank in the same department.

Such a promotion method suffers from two shortcomings; first it limits the horizon of experience of an employee; second, it deprives the employee of the opportunity to secure promotion in other departments at the right time.

Consequently horizontal promotions are also allowed in some companies under which employees may be promoted to higher ranks in other departments as well.

Since promotion or advancement serves as a major incentive for superior managerial performance and promotion is the most significant method of recognizing a manager’s merit, it is extremely important that promotions be fair, objective, and untainted by favoritism.

However, one important problem might arise quite often owing to the organization’s members, who are by passed for promotion; they are likely to feel resentful which may affect their morale and productivity.

Needs for a Sound Promotion Policy

The first requirement of a sound promotion policy is that it must provide for uniform distribution of promotional opportunities throughout the organization.

In other words, the ratio of internal promotions to recruitment must be the same at various levels in all departments. If this ratio differs considerably from one department to another, the morale of employees may be seriously impaired in the department known for its low ratio of promotions.

Secondly, a sound promotion policy must clearly state to managers and all other employees in advance about the opportunities for advancement. Organizations generally make use of various types of charts for this purpose.

These charts variously known as “opportunity charts” or “promotion charts” do not promise or guarantee the promotion of an individual. They merely point out how various positions in the organization are related to each other.

The third requirement for such a policy is to have some definite system for the selection of the employees who are to be promoted. This obviously calls for having a set of definite criteria for the purpose. This makes the process fair and objective.

Fourthly and finally, a sound promotion policy must provide for a suitable system of follow-up, counseling and review.

For example;

After a couple of months either the personnel manager or the departmental head should hold a brief interview with the promoted manager or personnel himself/herself or discuss with the concerned superior to know about his/her performance in the newly promoted post.

All promotions should be made for a trial period so that in case the promotee is not found capable of handling the job he can be reverted to his former post on the former pay scale.

Basis of Promotion

There is a controversy over what should be the criterion for promotion—seniority or ability? Seniority refers to the relative length of service of employees.

The seniority method of promotion has been in vogue since ancient times. Historically this method should be regarded as a success.

However, in modern business it is not always reliable and effective as a promotional policy.

One important drawback of the seniority principle is that capable young people are likely to become impatient and demoralized “waiting-for-dead-men’s shoes” and may quit looking for better opportunities elsewhere.

Consequently, the organization is most likely to be managed by second-grade people.

In principle, it is agreed by all that promotion should be based on merit. The use of merit as a basis for promotion causes difficulties because employees may not have full faith in what management regards as merit, or they might consider such a criterion as a pretext for favoritism.

Therefore, as far as possible merit rating should be fair, objective and transparent.

Seniority-merit should be the basis of promotions where merit can be objectively tested. The term merit generally means efficiency, skill, aptitude etc.

When a combination of merit and seniority is desirable, the play of discretion in the matter of selection cannot be overlooked. A sound management will also pursue a policy of properly balancing these factors.