A STUDY ON PROMOTION, TRANSFER, DEMOTION

• PRESENTED BY

E. VENKATA RAO

CONTENTS

PROMOTIONSTRANSFERDEMOTIONS

PROMOTIONS

• Meaning• Types of Promotion• Purpose of Promotion• Bases of Promotion• Benefits of Promotion• Promotion Principles

Meaning

• According Pulapa Subba Rao “Promotion is the reassignment of a higher level job to an internal employee (which is supposed to be assigned exclusively to internal employees) with delegation of responsibilities and authority required to perform that higher job and normally with higher pay”

Types of Promotion• Promotion is of three types. They are:1. Vertical promotion2. Upgradation3. Dry promotion

1. Vertical promotion: Under this type of promotion,

employee is moved to the next higher level, in the organizational hierarchy with grater responsibility, authority, pay and status.

•Continue…..2. Upgradation:

Under this Promotion, the job is upgraded in the organizational hierarchy. Consequently, the employee gets more salary, higher authority, responsibility.

3. Dry promotion:Under this Promotion, the employee is

moved to the next higher level in the organizational hierarchy with greater responsibility, authority and status without any increased in salary.

Purpose of Promotion• Organizations promote the employees with a

view to achieve the following purposes: To utilize the employee’s skill, knowledge at the

appropriate level in the organizational hierarchy resulting in organizational effectiveness and employee satisfaction

To develop competent internal source of employees ready to take up jobs at higher levels in the changing environment

To promote training, development programs and in team development areas

To build loyalty and to boost morale To reward committed and loyal employees

Bases of Promotion• Organizations adopt different bases of

promotion depending upon their nature, size, management etc.

• Generally, they may combine two or more bases of promotion.

• The well-established bases of promotion are:

MeritSeniority Merit-cum-Seniority

• Merit:Merit is taken to denote an individual

employee’s skill, knowledge, ability, efficiency and aptitude as measured from educational, training and past employment record.

• Seniority:Seniority refers to relative length of service in

the same job and in the same organization.The logic behind considering the seniority as a

bases of promotion is that there is a positive correlation between the length of service in the same job and the amount of knowledge and the level of skill acquired by an employee in an organization.

• Merit-cum-seniority:A combination of both merit and seniority can

be considered as the basis for promotion satisfying the management for organizational effectiveness and the employees and trade unions for respecting the length of service.

Benefits of PromotionPromotion of employees from lower ranks to

higher positions benefits the organization as well as employees:

It places the employees in a position where an employee’s skill and knowledge can be better utilized;

It creates and increases the interest of the other employees in the company ass they believe that they will also get their turn;

Promotion improves employee morale and job satisfaction;

Ultimately it improves organizational health.

Promotion principles

• Every organization has to satisfy clearly its policy regarding promotion based on its corporate policy. The principles are:

Systematic line of promotion channel should be incorporated,

It should provide equal opportunities for promotion in all categories of jobs, departments and regions of an organization,

It should contain clear cut norms and criteria for judging merit, length of service, potentiality etc.,

Appropriate authority should be entrusted with the task of making a final decision,

Favouritism should not be taken as a basis for promotion.

TRANSFER• Meaning • Purpose of Transfer• Types of Transfer • Benefits of Transfer• Problems of Transfer• Transfer Principles

• Meaning:It is defined as “…the moving of employee from one job to another. It may involve a promotion, demotion or no change in job status other than moving from one job to another”

Purpose of Transfer:Organizations resort to transfers with a view to

attain the following purposes:To meet the organizational

requirements:Organizations may have to resort to transfer of

employees due to changes in technology, change in volume of production, production scheduled, product line, quality of production etc.,

To satisfy the employees’ needs:Employees do need transfer in order to satisfy

their desire to work under a friendly superior, in a department/region where opportunities for advancement are bright, in or near their native place or place of interest, doing a job where the work itself is challenging etc.,

Types of TransferTransfer can be classified into the following types:I. Production Transfer: transfer caused due to changes in

production

II. Replacement Transfer: it is caused due to replacement of a long standing employee in the same job

III.Rotation Transfer: transfers initiated to increase the versatility of emp..

IV. Shift Transfer: transfer of an employee from one shift to another

V. Remedial Transfer: transfers initiated to correct the wrong placements

VI.Penal Transfer: transfers initiated as a punishment for indisciplinary action of employees

Benefits of TransferTransfer benefits both the employees and the

Organization.Transfer reduce employees’ monotony,

boredom etc. and increase employees’ job satisfaction. Further, they improve employees’ skill, knowledge etc.

They correct erroneous placements and inter-personal conflicts. Thus, they improve employees’ morale.

Further, they prepare the employee to meet organizational exigencies including fluctuations in business and organizational requirements.

Thus, they enhance human resource contribution to organizational effectiveness.

Problems of Transfer• Despite these benefits, some problems

are associated with transfers. They are;• Adjustment problem to the employee to

the new job, place, environment, superior and colleagues

• Transfer from one place to another result in Mandays,

• Company initiated transfers result in reduction in employee contribution

• Discriminatory transfers effect employee morale, job satisfaction, commitment and contribution.

Transfer Principles• Organizations should clearly specify their policy

regarding transfer.• Systematic transfer policy should contain the

following items: Specification of circumstances under which an

employee will be transferred in the case of company initiated transfer

Reasons which will be considered for personal transfers, their order of priority etc.

Reasons for mutual transfer of employees Specification of basis for transfer like job analysis,

merit and length of service Specification of pay, allowances, benefits etc. that

are to be allowed to the employee in the new job.

DEMOTIONS• Meaning• Reasons for Demotions• Demotion Principles

Meaning:

Demotion is the “ reassignment of a lower level job to an employee with delegation of responsibilities and authority required to perform that lower level job and normally with lower pay ”.Organizations use demotions less

frequently as it affects the employee’s career prospects and morale.

Reasons for DemotionsUnsuitability of the Employee to Higher

Level Jobs:Employees are promoted based on seniority and past

performance. But some of the employees are demoted on these two bases may not meet the job requirements of the higher jobs.

Adverse Business Condition:Generally it force the organization to reduce quality

of production, withdrawal of some lines of products. Consequently, organizations minimize the number of employees.

Junior employees will be retrenched and Senior employees will be demoted under such conditions

Reasons for Demotions continue….

New technologies and new methods of operation demand new and higher level skills.

• If the existing employees do not develop themselves to meet these new requirements, organization demote them to the lower level jobs where they are suitable.

Employees are demoted on disciplinary grounds. This is one of the extreme steps and as such organizations rarely use this measure

Demotion Principles• Organizations should clearly specify the demotion

policy. A systematic demotion policy should contain following items:

Specification of a superior who is authorized and responsible to initiate a demotion

Jobs from and to which demotions will be made and specifications of line or ladders of demotion

Specification of basis for demotion like length of service, merit or both

It should provide for an open policy rather than a closed policy

It should contain clear cut norms for judging merit and length of service