Promotions, Demotions and Transfers
Promotion is the movement of an
employee 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 high-potential
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.
Performance factors like ability
to develop good subordinates, operating with minimum direction and having a
record of accomplishments are found to be extremely helpful characteristics for
a person to be eligible for promotion. Personality characteristics like
openness to accept criticism, ability to communicate effectively and respect
for fellow human beings tend to make the person survive after the promotion.
However the socio-environmental factors surrounding employees like their
personal life, family unity, superior’s reputation and promotional prospects and
connections with power centres, are also given importance in practice, even
though they are not concerned with the individual’s effort.
People desirous of promotion
might be adopting many of the tactics to acquire greater power. Exuding
confidence, progressing one step at a time, making one’s activities central and
non-substitutable to the organization, developing expertise, committing the
rare and uncommitted feats, engaging in rational persuasion of others, upward
appeals quoting consent of higher ups, pressure tactics like using demands and
threats, image building through attention-seeking activities, regulating
information flow upward and downward, networking with people and other such
types of behavior that are political in nature.
If a person is denied promotion
or overlooked upon at discussions for promotions, he or she might feel severely
frustrated. The frustration would be particularly high if the candidate has
nurtured deep desire for the promotion and had been sure of reaching it. Frustration
would be heightened if the person had taken a lot of efforts to be eligible for
promotion and if the next chance for promotion is remote. Being scheduled for
promotion and getting dropped from the list would lead most people to feel the
urge to quit their jobs.
For example, when the Chief
Executive Officer (CEO) of a large renowned multinational corporation reached
his retirement stage, the organization had arrived at three names in its
shortlist of candidates one of whom would be chosen to succeed the present CEO.
Since the three names were already discussed openly in the media, they were
well known to the public. Before choosing one from the three, the selectors
raised the issue of how they would react if they were not selected as the CEO.
All of them replied that it would be a loss of face to them in that case and
hence they would resign and quit the organization. Taking cues from this
feedback, the organization realized that they would have to find three
successors to the positions occupied the candidates for CEO and that an
increasing number of successors would have to be found to fit the lower levels.
Awarding promotions are the most
significant forms of recognizing superior performance. Therefore, it is
extremely important that promotions be fair and based on merit and untainted by
favouritism. 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 not 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 of
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.
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 the 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 flattering,
demotion could be losing its significance and impact. Demotion would be less
frustrating to an employee if the placement in a particular position had been
notified as temporary and revocable.
b. Transfer is reshuffling of human resources
from one unit of work place to
another. It involves lateral mobility of employees from one post to another
within an organization. Through transfers, people are shifted to a job that is
comparatively equivalent in pay, responsibility and organizational level.
Transfers may be voluntarily sought by employees or may be used as the sole
prerogative of the managements. They could be occurring on a mutual basis
between two employees or as a sequence of transfers. Transfers may occur within
or outside functions, departments, units or divisions.
Transfers serve a number of
purposes. They may be carried out to enhance efficiency in the utilization of
human resources through the redistribution of work force’s size and strength
according to changing needs. A transfer is said to be a replacement transfer if
it is caused due to the displacement of an existing incumbent in a job. It is
called remedial transfer if it is initiated to correct a previous incorrect
placement. Transfers might also be ordered to satisfy the requirements of
employee to work under a better superior or to move into a job with brighter
career prospects or be in a more convenient location.
Transfers are also at times used
to keep promotion ladders open to keep individuals not having growth
opportunities in their own department, continued to be interested in their
work. Some times, transfers are also effected to stall layoff. Since transfers
expose employees to others’ jobs, work can continue even during periods of
emergency such as accidents or strike, when some employees are unavailable to
work. An employee may be transferred because management feels that crucial
forms of competence could be put to use in another deserving place. Thus it
becomes an employee assistance measure. Transfer may be a developmental device
to provide more exposure to the employees and make them more versatile.
Transfers may at times be necessary to diminish conflicts between colleagues.
Transfers may be used as a disciplinary measure to punish employees indulging
in any acts of misconduct. In this case, they are called penal transfers.
Transfers help reducing monotony
and boredom felt by employees and thereby enhance their satisfaction on job and
the morale of their groups. They can also prepare an employee for challenging
assignments in the future. The intervening authorities from above could shift
over-dominating employees. Better employer-employee relations and stabilization
of changing work requirements in different departments or locations are the
other beneficial outcomes of transfers. On the negative side, transfers might
be viewed as an inconvenience to those who are reluctant to move. Managers
might feel that they are unfairly made to move away from their pet projects and
supportive superiors. Some employees may feel it uncomfortable when they have
to separate from their affiliates at work and might have to adapt to a more
demanding work schedule. Shifting of experienced hands and minds may affect
productivity in the department from which a person is transferred. Dual career
couples might have objections when only one of them is transferred. Arbitrary
and discriminatory transfers can affect the employees’ morale.
In order to make transfers more
pleasant and less troublesome, employees must be explained the circumstances
under which the transfer was initiated and the reason for choosing this
particular employee for the transfer. It is also important on the part of the
organization to provide appropriate support in the form of facilities like
orientation regarding the new place, days of leave, adequate manpower,
allowances and material assistance to the transferee for packaging luggage,
transportation, re-registrations and shifting of families and taking care of
avoiding disruptions in the lives and careers of employees’ spouses. Transfers
should be spaced out by years of gap and should have employee
development-orientation.
Transfer opportunities could also
be used adeptly to get vital clues into organizational problems. This could be
illustrated with the help of a case described by Akio Morita of Sony
Corporation in Japan when he introduced a scheme by which employees could apply
for transfers outside their departments, when there is an internal job posting.
The scheme proved to bring in multiple benefits. People who wanted to move out
of Sony could be retained within the company by this scheme. The scheme had yet
another benefit of identifying the departments from which request for transfer
appears in large numbers. Large numbers of these applicants were actually
sending signals of some underlying anomaly like an autocratic or nagging boss. The top
management could sense this problem and sort it out with the heads of these
departments and avert large-scale turnover of skilled human power. The
organization also got valuable insights into the needs and aspirations of its
employees, and thereafter began its plan for further human resource planning.
Vacancies arise due to a variety
of reasons like growth, diversification, turnover of employees and
organizational restructuring. While training interspersed with transfers and
promotions could occur as intermittent or discontinuous events that serve to
provide a plethora of opportunities to experiment, learn and perform in new ways,
they are still not likely to be adequate to maximize employee development. In
this regard, there should also be ongoing efforts from the organizations to
enable an employee to become involved actively, contribute his mettle and help
taking the whole firm or even an entire industry to new heights. These
continuous efforts may take forms called as Empowerment and Delegation.