Policy of open competition

Managers must decide whether the benefits of a policy of promotion from within outweigh the policy’s shortcomings. There are clear cut reasons for implementing the principle of open competition by opening vacant positions to the best qualified persons available, whether inside or outside the enterprise. It gives the firm, in the final analysis, the opportunity to secure the services of the best suited candidates. It counters the shortcomings of an exclusive policy of promotion from within, permits a firm to adopt the best techniques in recruiting managers, and motivates the complacent “heir apparent”. To exchange these advantages for the morale advantages attributed to internal promotion would appear questionable.

A policy of open competition is a better and more honest means of ensuring managerial competence than is obligatory promotion from within. However, is does put the managers who use it under a special obligation. If morale is to be protected in applying an open competition policy, the enterprise must have fair and objective methods of appraising and selecting its people. It should also do everything possible to help people develop so that they can qualify for promotions.

When these requirements are met, it would be expected that every manager making an appointment to a vacancy or a new position would have available a roster of qualified candidates within the entire enterprise. If people know that their qualifications are being considered, if they have been fairly appraised and have been given opportunities for development, they are far less likely to feel a sense of injustice if an opening goes to an outsider.

Other things being equal, present employees should be able to compete with outsiders. If a person has the ability for a position, he or she has the considerable advantage of knowing the enterprise and its personnel, history, problems, policies, and objectives. For the superior candidate, the policy of open competition should be a challenge and not a hindrance to advancement.

Promotion from within:

Originally, promotion from within implied that workers proceeded into front-line supervisory positions and then upward through the organizational structure. Thus, a firm was pictured as receiving a flow of non-managerial employees from which future managers emerged. As used to be said in the railroad industry, “When a president retires or dies, we hire a new office worker”.

Promoting from within the enterprise not only has positive values relating to morale, employees’ long run commitment to the company, and the firm’s reputation but also permits taking advantage of the presence of potentially fine managers among the firm’s employees. However, even though these positive but un-measurable values are important, executives should not be blind to the dangers of either over-emphasizing this source or relying upon it exclusively.