A STUDY ON

PROMOTION, TRANSFER, DEMOTION

PRESENTED BY

E. VENKATA RAO

CONTENTS
PROMOTIONS
TRANSFER
DEMOTIONS

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 promotion
2. Upgradation
3. 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

Purpose of Promotion
Organizations promote the employees with a view
to achieve the following purposes:
To utilize the employees 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:

Merit
Seniority

 Merit:
Merit is taken to denote an individual
employees 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

 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 Promotion
Promotion of employees from lower ranks to
higher positions benefits the organization as
well as employees:
It places the employees in a position where an
employees 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

Types of Transfer
Transfer 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 Transfer
Transfer 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 interpersonal conflicts. Thus, they improve
employees morale.
Further, they prepare the employee to meet
organizational exigencies including fluctuations
in business and organizational requirements.

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

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 employees
career prospects and morale.

Reasons for Demotions

Unsuitability 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

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