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Promotion means the advancement of an employee to a higher job involving more work, greater responsibility and higher status. It may or may not be associated with the increment in salary.

Promotion is one of the best forms of incentives and it provides higher responsibilities, better salary, high morale and job satisfaction to the employees. Practically, all the employees aspire for career advancement and promotion is an advancement of the employee in the organisational hierarchy.

Edwin B. Flippo, “A promotion involves a change from one job to another that is better in terms of status and responsibilities.”


Learn about:- 1. Introduction to Promotion 2. Meaning and Definition of Promotion 3. Features 4. Purposes 5. System 6. Types 7. Bases 8. Principles 9. Reasons 10. Policy.

Promotion: Meaning, Definition, Features, Purposes, Types, Bases, Reasons, Policy and Principles


Opportunities for advancement in service are one of the best incentives an organisation can provide to its employees. Practically, in all organisations, there are only a few employees who are always satisfied with their existing jobs. The desire to advance and increase one’s status is a basic urge in all human beings.

Satisfaction of that desire keeps most people striving for higher status and better pay, which in turn improves their standard of living, morale and job satisfaction. Thus, advancement is one of the best forms of incentives, which generates a sense of loyalty towards the organisation and keeps the employees busy in investing their sincere efforts in the hope of getting further advancement.

For an employee, a job may be better even if it has more favourable working hours, better location or working conditions. Employees do seek their placement to better jobs in these terms as well. But such placements cannot be called promotions. Only the advancement of a present employee to a job which involves greater skill or responsibilities and higher pay is considered as promotion.


It will be seen that promotion is the way of recognising and developing the abilities of present employees by filling the skilled and responsible positions from within rather than from outside.

However, all promotions do not possess all the aforesaid characteristics, for example, there may be no increase in pay in a promotion. Sometimes it may happen that the promotion may be a ‘dry promotion. A dry promotion refers to an increase in responsibility and status without an increase in pay.

A company may have a formal as well as an informal promotion system, an open or a closed promotional system and so on. Promotion is distinguishable from transfer also in the sense that the latter refers to changes in jobs that involves little or no change in status, responsibility and pay.

PromotionMeaning and Definition

Promotion means the advancement of an employee to a higher job involving more work, greater responsibility and higher status. It may or may not be associated with the increment in salary. Sometimes, salary of the employee also increases with the promotion. Sometimes it is not so. When an employee is promoted but his salary does not increase it is known as dry promotion. Promotion means the placement of an employee on a higher post involving greater amount of responsibility, better status, more pay and more perks.


Some people think that promotion means the increment in pay. The reality is not so. If the salary of an employee increases or the pay scale changes to a higher one, it is only known as up grading or salary increment. However, it can now be regarded as promotion. Generally, promotion is associated with the increase in salary, status, facilities, responsibilities and job.

Performance appraisal forms a basis for HR decisions on training, salary increase, promotion, transfer and separation. Of these, promotion, transfer and separation functions are effective methods to adjust the size of the workforce of an organisation. Promotion, transfer and separation provide workforce flexibility and mobility required to meet the needs of the organisation.

Promotion is one of the best forms of incentives and it provides higher responsibilities, better salary, high morale and job satisfaction to the employees. Practically, all the employees aspire for career advancement and promotion is an advancement of the employee in the organisational hierarchy.

The term promotion has been defined by eminent authors as follows:

Edwin B. Flippo, “A promotion involves a change from one job to another that is better in terms of status and responsibilities.”

Scott & Spriegal, “A promotion is the transfer of an employee to a job that pays more money or that enjoys some better status.”

In the words of Paul Pigors and Charles Myers, “Promotion is an advancement of an employee to a better job, better in terms of greater responsibilities, more prestige or status, greater skill and specially increased rate of pay or salary”.

Thus promotion is a term which covers a change and calls for greater responsibilities, and usually involves higher pay and better terms and conditions of service and, therefore, a higher status or rank.

Promotion, in the words of Dr. L.D. White, “means an appointment from a given position to a more difficult type of work and greater responsibility accompanied by change of title and usually an increase in pay.” Real promotion means rising to a higher post carrying a higher grade.


The change in duties and responsibilities form the essential characteristics of the promotion process. If a lecturer is appointed the Head of the Department in a college, it is promotion, similarly if the Head is appointed Principal it is promotion because it has led to a change of duties and responsibilities.

On the basis of analytical study of above definition, it may concluded that promotion means the transfer of an employee to a job involving more work and greater responsibility and enjoying better pay, status and facilities.

Promotion – Top 6 Features

a. Promotion is a reward for consistently good performance of the employee.

b. It enhances employee morale and job satisfaction.


c. It involves higher responsibilities, better job status and increase in salary.

d. Provides opportunities for career advancement.

e. Promotion is beneficial to both employees as well as organisation. It motivates, increases the involvement and commitment of the employees, leading to increased productivity.

f. It helps the organisation to attract and retain good performers.

Promotion – 7 Main Purposes (With Some Other Purposes Mentioned by Watkins, Dodd and Others)


Promotion from within is a very good policy. It is useful for both – employees as well as organisation. Every organisation, therefore, needs a formal and systematic programme of promotion. This promotion programme can be said to be promotion policy.

The main purposes of promotion are:

(a) To recognize and reward the efficiency of an employee.

(b) To attract and retain the services of qualified and competent people.

(c) To increase the effectiveness of the employee and of the organisation.

(d) To motivate employees to higher productivity.


(e) To fill up higher vacancies from within the organisation.

(f) To impress upon those concerned that opportunities are available to them also in the organisation if they perform well.

(g) To build, loyalty, morale and sense of belongings in the employees.

Watkins, Dodd and others mention the purposes of promotion as under:

(a) To reduce discontent and unrest.

(b) To furnish an effective incentive for initiative, enterprise and ambition.


(c) To conserve proved skill, training and ability.

(d) To attract suitable and competent workers.

(e) To suggest logical training for advancement.

As Youder and others observe, “Promotion provides incentive to initiative, enterprise and ambition, minimizes discontent and unrest, attracts capable individuals, necessitates logical training of advancement and forms an effective reward for loyalty and cooperation, long service, etc.”

Promotions have a salutary effect on the satisfaction of the promoted person’s needs for esteem, belonging and security. They are also offered an opportunity for greater self-actualization through more varied and challenging assignments.


Promotion system involves clear-cut definitions of line of future advancement, detailed personnel records, specific promotion plans, definite allocation of responsibility for identifying promotable individuals and a centralised co-ordination of promotion function.


Beach has very aptly described promotion systems for different categories of personnel in the organisation. He observes- “For unskilled and semi-skilled workers, entry is made into ‘labour pool’ and thereafter upgrading takes place on the basis of seniority or a combination of both seniority and ability. The skilled craftsmen are recruited as helpers or apprentices and thereafter upward mobility occurs up to position of foremen, inspectors or production coordinators. Entry in clerical jobs is through appointment as clerks, typists or stenographers and subsequently promotions are made to higher positions such as that of secretaries or administrative assistants. In professional jobs, entry is made as assistant engineers, engineers, senior engineers, project engineers or even managers. Jobs in managerial positions are filled up by individuals who enter as management trainees or assistant supervisors, finally they are promoted to middle level management positions and ultimately to top management positions.”

Promotions may be based on either the “rank-in-the-job” or “rank-in-the-man”. In former system, the content of the job including level of skill, efforts and responsibility form the basis. In this system, emphasis is laid on job analysis, job evaluation, organisational planning, etc. These determine the pay and status in the organisation.

In the latter system, emphasis is put on proficiency of the individuals. It determines the position level in the hierarchy of career pattern.

Promotion – 3 Types: Horizontal Promotion, Vertical Promotion and Dry Promotion

Promotions may be multiple chain promotions which provide for a systematic linking of each position to several others. Such promotions identify multi-promotional opportunities through clearly defined avenues of approach to and exit from each position in the organisation.

In an up or out promotion, a person must either earn a promotion or seek employment elsewhere. Many universities and other organisations follow this practice. Such promotions often lead to termination of services.

Dry promotions are those which are given in lieu of increases in compensation, i.e., when all compensation is adjusted upward to keep pace with the cost of living, we have dry promotions.


Promotion becomes a delicate problem not in the matter of selection of the right incumbent for the right job, but it poses a constant challenge to executives at all levels and impels them to chalk out a well thought-out programme by which the best and the most capable individuals may find an opportunity to go up to the top.

The procedure for promotion, therefore, starts right at the bottom from the shop-floor and ends with the managing director of a company.

All promotions should be on a trial basis (from 6 months to one year) for if the promoted person is not found capable of handling his job, he may be reverted to his former post and former pay scale.

Promotion may be temporary or permanent, depending up on the needs of an organisation, an employee is promoted.

Promotion may be classified into the following types:

1. Horizontal Promotion:

When an employee is shifted in the same category with increase in pay, responsibilities and change in designation, it is called horizontal promotion. For example Second Division Assistant is promoted as First Division Assistant. This type of promotion may take place within the same department or from one department to another or from one plant to another plant.

2. Vertical Promotion:

When an employee is shifted from a lower category to higher category with increase in pay, status and responsibility it is called vertical promotion. For example a sales Manager is promoted as General Manager in the company.

3. Dry Promotion:

When promotion is made without increase in salary or remuneration, it is called “dry promotion”. For example a college professor promoted as Head of the Department without increase in salary. In dry promotion there will be a change in designation and responsibility without corresponding change in remuneration.

Promotion – 2 Important Bases: Promotion by Seniority and Promotion by Merit

There are two bases of promotion, i.e.:

1. Promotion based on Seniority and

2. Promotion based on Merit/Performance.

Of course, there is also the third method, a blend of seniority and merit used in a balanced manner.

1. Promotion by Seniority:

Promotion by seniority is one of the popular methods followed for giving promotion to the employee. Seniority is based on the total length of service and is counted from the date of his appointment in the organisation. This method is followed in Government service. However, merits such as qualifications, knowledge, skills, performance, etc., are not given weightage as promotion is based on seniority.

Advantages/Merits of Promotion by Seniority:

a. In business and industrial undertakings, this method is followed for patronising employees and has wide acceptance by trade unions and among employees.

b. It is very simple and objective method of identifying employees for promotion.

c. Creates a sense of security among employees since they can predict in advance when they will get promoted.

d. Leads to congenial industrial relations as decisions on promotions are based on seniority alone.

e. Avoids bias, favouritism and nepotism in identifying employees for promotion.

f. Employees will remain loyal to the organisation even when there are better opportunities elsewhere.


a. Seniority very often ignores merit and good performance in the job. The person with long service need not be competent in the job.

b. Overemphasis on seniority and no incentive for high/improved performance the job.

c. Ambitious people who are highly career oriented, may not stick to the job and leave the organisation.

d. It is difficult to attract talented people unless they are placed in special category for promotion.

e. No differentiation between efficient and inefficient employees and promotes mediocrity in the organisation.

f. Management is not generally favourable to promote employees based on seniority. They prefer to combine merits and seniority.

2. Promotion by Merit:

Promotion by merit is generally followed in private organisations. Promotions are based on merits of the employees, i.e., qualifications, knowledge, skills, honesty, initiative, interpersonal relationship, effective communication and of course performance in the job. Seniority is not given weightage. However, unions demand promotions based on seniority, i.e., length of service of the employee.

The HR department has to keep updated records about each employee and such records should include details, performance in the job, increments, performance awards etc. Performance appraisal records would also provide information on the past performance and strengths and weaknesses of the employee.

Advantages of Promotion by Merit:

a. It appreciates and recognises the knowledge, skills and performance of the employee. Even employees with less experience can expect promotions.

b. It motivates the employees to perform better as promotions are based on merits.

c. The management is able to retain competent employees as they are eligible for promotions based on merits.

d. Leads to increased productivity in the organisation.

e. Management support promotions based on merit.

f. It is a scientific and objective method of promoting employees.

Limitations of Promotion by Merit:

a. Scope for favouritism and bias.

b. The method is not accepted by trade unions.

c. Defining merit is difficult and complicated in the absence of updated and accurate records.

d. No guaranteed promotion even if the person has put in several years’ service in the organisation.

Promotion – 7 Important Principles

There are certain principles of promotion which must be observed in framing promotion policy and making promotion decisions.

These principles are as follows:

1. Uniformity:

Promotion policy must provide for a uniform distribution of promotional opportunities throughout the organization. As far as possible, the ratio of internal promotions to external recruitment must be the same in all the departments. In absence of this, morale of employees will be seriously impaired in the departments in which rate of promotions is lower.

2. Consistency:

Promotion should have consistency, that is, it must be applied to all personnel concerned. Consistency demands that promotion is linked with career planning of all individuals and promotion is not a sudden spurt and ad hoc to benefit a few individuals.

3. Fair and Impartial:

Promotion policy should be fair and impartial. Fairness and impartiality in promotion ensure that only right personnel are promoted, and other factors such as family connection, caste connection, etc. do not play their role. Further, fairness and impartiality in promotion should not be only for communication but these must be followed in practice, otherwise, promotion may create more conflicts and politics in the organization.

4. Planned Activity:

Promotion policy should ensure that promotion is undertaken as a planned activity and as a regular process, rather than ad hoc process. Promotion must be seen as a backward linkage with assessment of the promotion opportunities on the one hand, and forward linkage with the development of personnel to make them promotable, on the other hand.

5. Sound Basis of Promotion:

There should be sound basis of promotion and it must be made known to the employees. In the light of this, the employees develop their promotability. In absence of sound basis of promotion, organizational politics is heightened because every aspirant for promotion may try for promotion and is likely to use all possible tricks for promotion.

6. Sanction:

All promotions should be finally sanctioned by the concerned authority. Generally, organizations make a provision that HR department proposes the names of potential candidates and send their records to the department making the requisition to fill vacancies through promotion. In this way, the staff authority of HR department does not intrude upon the authority of the department served.

7. Follow-Up:

There should be a suitable system of follow-up to assess the how the promoted employee is working in his new position. The HR department should hold a brief interview with the promoted employee and his new superior to determine whether everything is going well. Many organizations make provision that the promoted employees should be kept on probation for a specified period. If their performance during period is not satisfactory, they may be reverted back to their previous positions. In this case, follow-up action is necessary.

Promotion – 10 Reasons for Promoting Employees in an Enterprise

There may be many reasons for promoting the employee in an enterprise.

Main reasons are as under:

1. To Reward the ability and efficiency of the employees.

2. To develop the feeling of integration with the enterprise among the employees.

3. To maintain discipline in the enterprise.

4. To provide an opportunity of development to the employees.

5. To motivate them to do their jobs with responsibility.

7. To develop the feeling of loyalty towards employers among the employees.

8. To fill up the higher posts.

9. To establish cordial human relations in the enterprise.

10. To maintain the industrial peace.

PromotionPolicy: Meaning, Areas, Elements, Guidelines, Benefits and Drawbacks

A sound promotion policy means a policy, which is fair, impartial and enjoys consistency. It should state management’s intention regarding filling of vacancies from within the organization (i.e. by promotions) or recruiting from outside or from both. In most cases, the superior/higher vacancies in an organization are filled through external recruitment, while the lower level vacancies are filled by promotions.

A promotion policy should provide a well-defined and clear-cut promotion chart. Management should state clearly the base of promotion, i.e. whether seniority is considered or merit, or both. Seniority means the length of service and is counted from the date of employee’s appointment in the organization.

Merit refers to a person’s qualifications and his competence. There has always been a great controversy with regard to the question whether promotions should be based on seniority or merit, or both. Each base has its own advantages/ merits and disadvantages/demerits.

The various requirements are:

(a) Showing ratios of internal promotion to direct recruitment

(b) Identifying the network of the related jobs and the promotional channels for each job.

(c) Developing the procedural norms for determining employees’ seniority and deciding upon whether it should be considered plant wise or occupation wise.

(d) Developing relationship between disciplinary action and promotions.

The usual policy is to take merit into consideration. Sometimes length of service, education, training courses completed, previous work history, etc., are factors which are given weight while deciding on a promotion. Although promotions are made on the basis of ability, hard work, co-operation, merit, honesty, many informal influences are powerful determinants of a promotional policy.

For higher posts, persons are picked by the top executives:

(i) Who think and feel just as he does;

(ii) Who value loyalty to him and to the organisation; and

(iii) Who have social, political, economic and religious interests similar to his own.

Top executives tend to choose those who are carbon copies of themselves.

Seniority versus Merit- “Seniority” refers to length of service in the company or in its various plants, or in its departments, or in a particular position. Under straight plant-wise seniority in all jobs, promotions go to the oldest employees, provided that he is fit for the job. Occupational seniority may be within a department, within a division or in the entire plant.

Seniority offers certain rights and benefits.

These are:

(a) Some rights are based on competitive seniority among employees. Rights to promotion, transfer, lay-off and recall are such examples.

(b) Other benefits have nothing to do with one man relative to another, e.g., a man may be entitled to have 15 days’ casual leave in a year, a pension after 30 years and a certain amount of sick leave after 6 months’ service.

Areas of Promotion Policy:

1. Promotion Policy Statement should cover the following-

i. Internal sources of personnel promotion or external source through recruitment

ii. Promotion policy with regard to direct recruits

iii. Increase in pay and benefits on promotion

iv. Promotion of consistently good performers in the absence of vacancies

2. Basis for giving promotions

i. Performance appraisal system/Confidential reports

ii. Promotion based on length of service, performance or both

3. Prepare formal and systematic promotion channels for the benefit of employees. Example- Promotion charts/Opportunity charts/Dead end jobs

4. Provide training for career advancement,

Example- On-the-job training, job rotation, under study, special assignments etc.

5. Communicate the Policy to the employees through union agreement, circulars, manuals, intranet etc.

6. Use of Personnel Records for taking decisions on promotion.

Elements of Promotion Policy:

Promotion from within is a very good policy. It is useful for both employees and organisation. Every organisation, therefore, needs a formal and systematic programme of promotion. The promotion pro­gramme can be said to be a promotional policy.

A sound promotion policy should be invariably based on merit, but seniority should also be taken into consideration. In addition to the relative emphasis on merit and seniority, there are certain other elements which must be duly incorporated in a sound promo­tion policy.

Considering the need for promotion, every organization should formulate its promotion policy. Promotion policy is a statement or an understanding which provides guidelines for making promotion decisions. The promotion policy should be a comprehensive one which should provide guidelines on all important issues related to promotion.

From this point of view, a promotion policy must deal with the following elements:

1. Promotion Policy Statement:

Promotion policy statement should specify whether a particular position will be filled by internal promotion, or it will be filled by open competition involving both internal and external candidates. If it is to be filled-up by open competition, whether some kind of preferential treatment will be given to internal candidates and in what forms.

2. Promotion Routes:

The organization must define the channels for promotion of different categories of employees — unskilled workers, apprentices, technical personnel, and managerial personnel. For each category of employees, it must define the ladder up to which they can ride.

For example, promotional ladders for different categories of employees may be as follows- for unskilled and semi-skilled workers, entry is made into ‘labour pool’ and, thereafter, upgrading takes place on the basis of seniority or a combination of both seniority and ability.

The skilled craftsmen are recruited as helpers and apprentices and, thereafter, upward mobility occurs up to the positions of foremen, inspectors, or production coordinators. Entry in clerical jobs is through appointment as clerks, typists, or stenographers, and subsequently, promotions are made to higher positions such as that of secretaries or administrative assistants.

In professional jobs, entry is made as assistant engineers and promoted as engineers, senior engineers, project managers or even managers. Jobs in managerial positions are filled-up by individuals who enter as management trainees or assistant supervisors, finally they are promoted to middle level management positions and ultimately to top management positions.

3. Promotion Procedure:

Promotion policy should spell out the procedure which will be followed in promotion and the personnel who will be involved in promotion decision. Generally, the promotion process is initiated by HR department and is completed in association with line managers. For example, Udai Pareek has observed that “top management critically review the promotion system developed by HR department and ensure objective promotions of senior managers.

It is the line management function to carry out periodical potential appraisal of the executives, participate in developing critical attributes (CA) of various roles, recommend promotions according to the policy, and provide feedback to HR department on the working of the system. HR department helps line management in promoting competent workers.”

4. Basis of Promotion:

Promotion policy should spell out the basis on which the promotion will be made- whether it will be based on merit or seniority, or a combination of both. If there is combination of both, the policy should indicate their relative weight in the promotion of various grades of employees. Further, guidelines should be provided how the merit and seniority should be determined. The basis for promotion is critical issue in any promotion decisions.

When promotion policy is formulated, it should be communicated to personnel concerned because if the policy is not communicated, there may be suspicions and misgivings about promotion policy which is detrimental to the organization.

Guidelines Promotion Policy:

A sound promotion policy provides decision-making criteria so that consistency of action can be maintained across the organization, and thus it obviates the need for frequent repetition of an extended decision-making process.

It provides basic guidelines as to certain questions like:

(i) Whether vacancies are primarily to be filled up from within an organization or by recruitment from outside?

(ii) Is any preferential treatment to be given to direct recruits?

(iii) Would it be sound to deny promotion to otherwise qualified personnel?

(iv) Whether an increase in pay is to be given? If so, when and how much?

(v) What should be the criteria of promotion – seniority or merit and ability? etc.

The promotion policy laying down the criteria, standards, measures, weightages, and the process and procedures for evaluation and communication must be specified and explained clearly. It should be in writing and must be understood by all so that there is no chance of suspicion on the part of any employee.

It is also helpful to communicate the rationale of promotion decisions to those who were superseded even though their seniority was considered. So, a promotion policy may lay down that if a senior person is not selected for promotion, he will be told the reason for his suppression.

Benefits of Promotion Policy:

The formation of a formal and sound promotion policy in any organisation offers the following advantages:

(a) It increases job satisfaction and improves their morale.

(b) It develops employee’s loyalty by assuring his promotion within the organisation.

(c) It attracts good and efficient employees from outside also.

(d) A sound and well organized promotion policy, if followed in a no partial manner removes the chances of subjectivity in promotional decision.

(e) It Increases the effectiveness of the organisation too.

(f) The policy of promotion from within is economical for organisation also.

(g) The efficiency of the employee and production of the organisation also increases.

Drawbacks of Promotion Policy:

The policy of filling up higher posts from among the internal candidates may be associated with the following drawbacks:

(i) Better qualified outsiders may not be reached by the management. Moreover, the person promoted to a senior job may not possess the required qualities.

(ii) The mobility of manpower is restricted. Once a man joins an organisation, he will stick to that organisation. Employee turnover to a certain extent is good for the health of the organisation.

(iii) In promotion, there may be clash between factors like seniority and ability. The decisions may lead to favouritism.

(iv) Further growth of the business is hindered by the limited talent of the insiders. The entry of fresh talent into the organisation will be restricted.

Therefore, in order to avoid the disadvantages of filling up senior vacancies through promotion, a sound policy of promotion should be designed. It should lay down what percentage of vacancies in higher posts are to be filled up by promotion from within the organisation and what shall be the basis for promotion, i.e., seniority or ability.

It should not bar the outsiders who may bring valuable ideas and may be more suitable to handle the job than the insiders.

However, discards of other organisations should always be avoided. Ordinarily, the demands made upon the outside labour market should be for the beginners only unless some specially qualified outsiders fit better than any of the insiders. Sound personnel policy demands that internal staff should be given fair chance for promotion before posts are filled up from outside recruitment.

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