In simpler terms, promotion refers to upward movement in present job leading to greater responsibilities, higher status and better salary. Promotion may be temporary or permanent depending upon the organizational requirement. According to Clothier and Spriegel, “promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.”
Purpose and Advantages of Promotion
Promotion stimulates self-development and creates interest in the job. According to Yoder, “promotion provides incentive to initiative, enterprise and ambition; minimises discontent and unrest; attracts capable individuals; necessitates logical training for advancement and forms an effective reward for loyalty and cooperation, long service etc.” The purposes and advantages of promotions are to:
a) Recognize employee’s performance and commitment and motivate him towards better performance;
b) Develop competitive spirit among employees for acquiring knowledge and skills for higher level jobs;
c) Retain skilled and talented employees;
d) Reduce discontent and unrest;
e) Utilise more effectively the knowledge and skills of employees; and
f) Attract suitable and competent employees.
Types of Promotions
Different types of promotions are discussed below.
a) Multiple Chain Promotion: It provides a systematic linkage of each position to several others. It provides multi-promotional opportunities through clearly defined avenues of approach to and exit from each position in the organization.
b) Up or Out Promotion: In this case, an employee either earns a promotion or seeks employment elsewhere. Out promotion usually leads to termination of employee and joining some other organization in a better position.
c) Dry Promotion: In this type, promotion is given in lieu of increase in salary. For example, when an university professor is made Head of the Department, there is no increase in salary.
Promotion Programme and Procedure
Every organization should make advance plans for promotion programme. A carefully planned promotion programme has four elements: a) formulation of promotion policy, b) identification of promotion channels, c) promotion appraisal, and d) centralised records.
We shall discuss each element in detail.
a) Formulation of Promotion Policy: Each organization needs to maintain a balance between the internal sources of personnel promotion and external sources by means of recruitment. Hence, promotion must be based on consistent, fair and clear cut policy. The National Institute of Personnel Management (NIPM) has suggested a promotion policy on the following lines:
1) Encouragement of promotion within the organization instead of looking outside to fill vacancies in higher places.
2) An understanding that ability as well as seniority will be taken into account in making promotions. Ability, efficiency, attitude, job performance, physical fitness, leadership, experience, and length of service are some of the factors considered in making promotions.
3) Drawing up an organization chart to make clear to all the ladder of promotion. Where there is a job analysis and a planned wage policy, such chart is quite easy to prepare.
4) Making the promotion system clear to all concerned who may initiate and handle cases of promotion. Though departmental heads may initiate promotion, the final approval must lie with the top management, after the personnel department has been asked to check from its knowledge whether any repercussion is likely to result from the proposed promotion.
5) All promotions should be for a trial period to ascertain whether the promoted person is found capable of handling the job or not. Normally, during this trial period, he draws the pay of the higher post, but it should be clearly understood that if “he does not make the grade” he will be reverted to his former post and former pay scale.
b) Promotion Channels: Promotion channels should be identified and recorded on paper. This process is related with job analysis and career planning of an organization.
c) Promotion Appraisals: The promotion of an employee is entirely dependent upon his/her performance appraisal outcome.
d) Centralised Records: The education, experience, skills, abilities and evaluation of all employees should be recorded and maintained in a centralised manner by the department of the organization, because basing on these attributes, promotion is given to an employee.
Bases of Promotion
Promotion is given on the basis of seniority or merit or a combination of both. Let us discuss each one as a basis of promotion.
Seniority as a basis: It implies relative length of service in the same organization. The advantages of this are: relatively easy to measure, simple to understand and operate, reduces layout turnover and provides sense of satisfaction to senior employees. It has also certain disadvantages: beyond a certain age a person may not learn, performance and potential of an employee is not recognized, it kills ambition and zeal to improve performance.
Merit as a basis: Merit implies the knowledge, skills and performance record of an employee. The advantages are: motivates competent employees to work hard, helps to maintain efficiency by recognizing talent and performance. It also suffers from certain disadvantages like: difficulty in judging merit, merit indicates past achievement, may not denote future potential and old employees feel insecure.
Seniority-cum-Merit as basis: As both seniority and merit as basis suffer from certain limitations, therefore, a sound promotion policy should be based on a combination of both seniority and merit. A proper balance between the two can be maintained by different ways: minimum length of service may be prescribed, relative weightage may be assigned to seniority and merit and employees with a minimum performance record and qualifications are treated eligible for promotion, seniority is used to choose from the eligible candidates.