UNIT – I Lesson 1 HRM – AN OVERVIEW Lesson Outline Nature of ...

3.17 Promotions, Demotions and Transfers
Promotion is an employee movement from current job to another that is higher in pay,
perquisites, prestige, privileges, authority and power, wider in jurisdiction and
responsibility with a likelihood of increase in the level a person is occupying presently in
the organizational hierarchy. A mere shifting of an employee to a different job which has
better working hours, better office space or more pleasant location would not be called
promotion. A promotion process begins with the screening of a number of possible
candidates for promotion and culminates in the official notification of the elevation of an
employee to a higher rank within the establishment. Promotions could be used as a
motivational tool as it brings enhanced working conditions for the promoted persons.
Promotions that merely increase job complexity without any real improvement in
jurisdiction could be called as Pseudo-promotions and are resented by employees.
Decisions to promote might be based on 360 degree appraisals of performance and
potentials. Job Knowledge tests could also be applied for promotions.
Promotion may be based on seniority or merit. Using merit as the sole basis for
promotion is subject to criticism because determining merit criteria often lacks reliability
and objectivity. Most organizations try to combine seniority and merit in a formula called
seniority-cum-merit. Under this formula, a certain number of years of service is taken as
the cut-off level initially. Then, if there are more persons than required for promotion in
that level, merit is given consideration. Some organizations are engaged in promotion
forecasts that allow them to identify people with high advancement potential. The highpotential
employees are then given special kinds of developmental experiences.
While filling vacancies in managerial positions, promotion from within an
organization is to be preferred to recruitment from outside because merit-based promotion
is generally viewed as a reward for excellent services rendered by an employee. If
seniority were not the sole criterion for promotions, employees at all levels would be
encouraged to show initiative and assume greater responsibility in their work. At the same
time, it could be imprudent to pick up the top performer in any area for a bigger job where
the demands are quite different. Promotions should not be decided upon parameters like
college degree, intelligence and popularity of a person. Not all people would desire to get
added burdens and shoulder additional responsibilities. Hence a person’s willingness is to
be considered thoroughly before taking any decisions on promotion.