Decision 1: Seniority or Competence the Rule? Probably the most important decision is whether to base promotional on seniority or competence or some combination of the two.
Decision 2: How should we measure competence?
Decision 3: Is the process formal or informal?
Today’s focus on competitiveness favors competence as does the fact that promotion based on competence is the superior motivator. However, a company’s ability to use competence as the criterion depends on several things, most notably whether or not union agreements or civil service requirements govern promotions. Union agreements sometimes contain clauses that emphasize seniority such as: In the advancement of employees, employees with the highest seniority will be given preference where skills and performance are approximately equal. And civil service regulations that stress seniority rather than competence often govern promotions in many public sector organizations.
If the firm opts for competence how should it define and measure competence? Defining and measuring past performance is relatively straightforward. Define the job set standards and use one or more appraisal tools to record performance. But promotions require something more: You also need a valid procedure for predicting a candidate’s future performance.
Most employers use prior performance as a guide and assume that (based on his or her prior performance) the person will do well on the new job. This is the simplest procedure. Others use tests or assessment centers to evaluate promo table employees and to identify those with executive potential.
An increasing number of employers take a more comprehensive approach. For example, (particularly given the public safety issues involved). In developed countries police departments have traditionally taken a relatively systematic approach when evaluating candidates for promotion to command positions. Traditional promotional reviews here include a written knowledge test, an assessment center, credit for seniority and a score based on recent performance appraisal ratings. Other departments are adding a personnel records review. This includes evaluation of job related dimensions such as supervisory – related education and experience ratings from multiple sources, and systematic evaluation of behavioral evidence.
Many firms have informal promotion processes. They may or may not post open positions, and key managers may use their own unpublished criteria to make decisions. Here employees may (reasonably) conclude that factors like who you know are more important than performance and that working hard to get ahead at least in this firm is futile.
Many employers establish formal published promotion policies and procedures. These have several components. Employees get a formal promotion policy describing the criteria by which the firm awards promotions. A job posting policy states the firm will post open positions and their requirements and circulate these to all employees. As explained many employers also maintain employee qualification databanks and use replacement charts ad computerized employee information systems.
Decision 4: Vertical Horizontal or other?
Promotions aren’t necessarily as simple as they may appear. For example, how do you motivate employees with the prospect of promotion when your firm is downsizing? And how do you provide promotional opportunities for those like engineers who may have little or no interest in managerial roles.
Several options are available. Some firms such as the exploration division of British Petroleum create two parallel career paths, one for managers and another for individual contributors such as high performing engineers. At BP individual contributors can move up to non-supervisory but senior positions such as senior engineer. These jobs have most of the financial rewards attached to management track positions at that level.
Another option is to move the person horizontally. For instance move a production employee to human resources so as to develop his or her skills and to test and challenge his or her aptitudes. And in a sense promotion are possible even when leaving the person in the same job. Or example, you can usually enrich the job, and provide training to enhance the opportunity for assuming more responsibility.
A transfer is a move from one job to another, usually with no change in salary or grade. In India, employees seek transfers for many reasons including proximity to their home town, better job prospects, personal enrichment more interesting profiles greater convenience and greater advancement possibilities. Employers may transfer workers to fill positions in cities like Bangalore and Mumbai, where the business is growing and where there are better career prospects. Transfers are a way to give employees who might have nowhere else to go a chance for another assignment and perhaps some personal growth.
Many firms have had policies of routinely transferring employees form locale to locale, either to expose them to a wider range of jobs or to fill open positions with trained employees. Such easy transfer policies have now fallen into disfavor. This is partly because of the cost of relocating employees (paying moving expenses, and buying back the employee’s current home, or instance), and partly because firms assumed that frequent transfers had a damaging effect on transferees’ family life.