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The three ways of career evolution: Promotion, Transfer, Demotion

Category: Staff’s Motivation


A promotion is a move of an employee to a job within the organisation, which has greater importance and, usually, higher pay. Frequently the job has higher status and carries improved fringe benefits and more privileges. Its purpose is to improve both the utilisation and motivation of employees.


By management decision

This is where an employee is selected for promotion on the basis of information already known to the management. This method is quick and inexpensive and obviously suitable for a small organisation or for jobs for which the field of possible candidates is small and well known. In large organisations it may cause discontent because the decision is arrived at in secret, possible candidates not having the opportunity to state their qualifications for the post. In all cases, this method depends for its success on complete and up to date employee records which can be used to identify all possible candidates for the job.

By internal advertising

Employees are told by notices or circulars that a post is vacant and they are then invited to apply. Some or all of the candidates are interviewed and one finally selected. It is a comparatively expensive and time consuming method, but it is particularly suitable to a large organisation in which management cannot be expected to have personal knowledge of possible candidates. It does not rely on accurate employee records, and being open rather than secret, appears fairer to the candidates than the management decision method.

Promotion and motivation

Normally, employees derive satisfaction from a company policy of promotion from within, but badly handled promotions can cause dissatisfaction. The important points to note are:

The criteria for promotion must be fair — usually a combination of ability, relevant experience and length of service.

The method must be fair.

Selection for promotion must be based on appraisals by past and present managers.

The wage or salary offered to the promoted employee must be what the job deserves rather than what the management thinks the new jobholder will accept.

Unsuccessful candidates must be sympathetically treated.

There must be no discrimination


A transfer is a move to a job within the organisation that has approximately equal importance, status and pay.

Selection for transfer

To manage human resources in a constructive way it is sometimes necessary to transfer employees to other jobs, sometimes because of changed work requirements and sometimes because an employee is unhappy or dissatisfied in his present job.

In some organisations it is the custom for the least satisfactory employees to be transferred from one department to another with the result that a transfer is regarded as discreditable, particularly if it occurs at short notice and without explanation. An unhappy employee may therefore prefer to leave the company rather than seek a transfer.

In other organisations transfers are used as a means of developing promising employees by giving them experience in several departments. A few organisations advertise all vacancies internally and consider applicants for whom the new job would be a transfer rather than a promotion.

Transfer policy

Transfers can increase job satisfaction and improve utilisation under the following circumstances:

A transfer is regarded as a re-selection.

The need for a transfer is explained.

Unsatisfactory employees are not dealt with by transferring them to other departments.

Requests by employees for transfers are fully investigated.

No employee is transferred to another district against his will.

An employee transferred to another district is given financial assistance from the company to cover removal costs, legal fees, refurbishing, etc.


A demotion is a move to a job within the organisation, which is lower in importance. It is usually, though not always, accompanied by a reduction in pay.

Reasons for demotion

An employee may be demoted for these reasons:

His job may disappear or become less important through reorganisation.

He may no longer be thought capable of carrying out his present responsibilities efficiently.

Effects of demotion

Unless the employee has himself asked for it, demotion will probably have adverse effects such as:

There will be less satisfaction of esteem and self-achievement needs. The employee may show negative reactions to frustration.

The employee may become a centre of discontent in the organisation.

Other employees may lose confidence in the company.

An employee who resigns because he has been demoted without his agreement may complain of unfair dismissal under the special category known as “constructive dismissal”.

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