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

merit and untainted by favoritism. Though many people accept the obligation to avoid
racial, sexual, age and religious discrimination in recruitment, very little attention is paid
to discrimination against the disadvantaged groups during promotion. Affirmative action
is to be taken to specially train the traditionally marginalized groups to face the challenges
of a competitive and potentially hostile environment. When promotion occurs in the same
category like clerical, manual or managerial groups, within one grade to another, it is
called as lateral promotions. When employees are shifted from a lower category to a
higher category, such promotions are called vertical promotion. During times of monetary
crisis, the management can grant promotions without any rise in pay, benefits and
allowances. Such promotions are known as dry promotions and the promoted employees
would be paid the increased wages when they are promoted.
The merits of promotion are encouragement of efficiency, retention of competent
people with an ambition for vertical growth upwards and increase in productivity. The
disadvantages of promotion from internal sources could be discontentment among other
contenders for the same position and scope for lobbying, bickering, frustration, unhealthy
competition and alienation from erstwhile peers and the possibility favoritism. Neglect of
length of service and loyalty could be the result of promotions not based upon seniority
and they could attract resistance from employee associations and trade unions. Promotion
policy should make it clear whether to promote employees against existing vacancies
alone or it is permissible to promote a person even if there is no real vacancy just for the
sake of rewarding a person’s performance.
3. 18.a. Demotion is the diametric opposite process of promotion. It is a course of action
by which an employee is assigned a downward assignment in the organizational hierarchy
to a different job with lesser pay, inferior designation, lower category, reduced status and
responsibility. An organization uses demotion less frequently than the other aspects of
mobility, primarily because of its serious negative implications on the employee’s career
and morale. An employee is likely to accept a demotion rather than lose the job altogether
if he employment opportunities in the job market outside are less.
Every manager is said to rise to his or her level of incompetence. In that case,
demotion would be one of the consequences arising out of an employee’s inability to
match the requirements of the present job, or when a promotion has been made
provisionally. Demotion may also occur as a disciplinary measure owing to the acts of
commission of malpractice by the employees. In the context when employee turnover is
high and organizational structures are flatter, demotion could be losing its significance and