Promotion Policy

Seniority and merit thus, suffer from certain limitations. To be fair therefore a firm should institute a portion policy that gives due weightage to both seniority and merit. To strike a proper balance between the two. A firm could observe the following points:

1) Establish a fair and equitable basis for promotion i.e. merit or seniority or both.
2) A promotion policy established thus, should provide equal opportunities for promotions in all categories of jobs, department and regions of an organization.
3) It should ensure an open policy in the sense that every eligible employee is considered for promotion rather than a closed system which considers only a particular class of employees. It must tell the employees the various avenues for achieving vertical growth through career camps, charts etc.
4) The norms for judging merit, length of service, potentiality etc must be established beforehand. The relative weightage to be given to merit or seniority or both should also be spelt out clearly.
5) The mode of acquiring new skills, knowledge etc should he specified to all employees so that they can prepare themselves for career advancement
6) Appropriate authority should be entrusted with the responsibility of taking a final decision on promotion.
7) Detailed records of services, performance, etc should be maintained for all employees to avoid charges of favoritism, nepotism etc.
8) It should be consistent in the sense that it is applied uniformly to all employees, irrespective of their background.
9) Promotion policy should contain alternatives to promotion when deserving candidates are not promoted due to lack of vacancies at higher level. These alternatives include up-gradation re-designation, sanctioning of higher pay or increments or allowance assigning new and varied responsibilities to the employees by enriching the job or enlarging the job.
10) A provision for appeal against (alleged) arbitrary actions of management and its review should be there.
11) Promotions initially may be for a trial period as to minimize the mistakes for promotion
12) Promotion policy once it is formulated should be communicated to all employees particularly to the trade union leaders. It should be reviewed periodically based on the experiences and finding of the attitude and morale surveys.


Demotion is the downward movement of an employee in the organizational hierarchy with lower status and pay. It is a down grading process where the employees suffers considerable emotional and financial loss in the form of lower rank, power and status lower pay and poor working conditions.


There are several factors responsible for demotions:

1) A promotee is unable to meet the challenges posed by a new job (technically superior, administratively complex, involving multifarious responsibilities etc).
2) Due to adverse business conditions, organizations may decide to lay off some and downgrade other jobs
3) Demotions may be used as disciplinary tools against errant employees.


Demotion may turn employees into mental wrecks. It may have a devastating impact on employee morale. It is an extremely painful action, impairing relationships between people permanently. While effecting demotions, therefore a manager should be extremely careful not to place himself on the wrong side of the fence. A clear cut policy may save the day for him in most cases.

1) A clear list of rules along with punishable offenses should be given to all employees.
2) Any violation should be investigated thoroughly by a competent authority.
3) In case of violations it is better to state the reasons for taking such a punitive step clearly and elaborately.
4) Once violations are proved there should be a consistent and equitable application of the penalty.
5) There should be enough room for review.

Source: HRM

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