Job Promotion Definition in Business

Promotion: Definition, Types of Promotion Promotion is transferring an employee to a new position that commands higher pay, privileges, or status than the old one, and it is a vertical move in rank and responsibility.

An organization can use a variety of incentives to motivate its employees. Demotivated employees are frustrated and cannot contribute to the best of their abilities. It is important to note that well-performing employees expect a reward in extra incentives, such as promotion.

Promotion ensures the effective utilization of human resources. Employees need to be assigned additional authority and responsibility as they acquire adequate expertise and competence.

The good work of an employee is to be recognized and rewarded.

Finally, higher vacancies in the organization are to be filled up progressively, and promotion serves the above purposes. Let us now define promotion.

The advancement of an employee from one job position to another job position with a higher salary rank, often more and higher-level job responsibilities is called a promotion. Visually, a promotion moves an employee's job up one level on an organizational chart.

Meaning of Job Promotion

A promotion occurs when an employee moves from one job to another, which is higher in pay, responsibility, and status. It is a vertical move in rank and responsibility. Yoder (1972) defines promotion as a movement to a position in which responsibility and prestige increase.

Strauss and Sayles (1976) define promotion as a movement to a position in which responsibility and prestige increase. It is a job with more prestige and income.

According to Biswanath Ghosh, "Appointment to a position requiring higher qualifications such as greater skill or longer experience and involving a higher level of responsibility, a higher rate of pay, and a title change is considered a promotion and will be classified as such in all personnel documents. Promotions will be made without regard to the employee's race, color, sex, religion, age, ethnic origin, or disability".

Promotion is different from upgrading. Promotion means advancing an employee to a higher status, while upgrading means increasing pay for the same job or moving to a larger scale without changing the job. Some regard it as a limited promotion.

When a higher position is given without a change in the salary, it is known as Dry Promotion.

Open and closed promotional systems. A company is said to have an open promotion policy if it considers all employees within the organization as potential candidates and announces internally such vacancies.

When an organization does not announce vacancies or openings are not open to all employees within the organization, the company has a closed promotion policy.

Objectives of Job Promotion

Researchers (Khan, and Akkas, 1990; Kokemuller, 2013) have pointed out different promotion objectives. They have outlined the following purposes of promotion:

To provide an incentive for initiatives and ambition,
To make the best use of skills and ability,
To reduce discontent and unrest,
To attract suitable and competent workers,
To suggest logical training for advancement,
To recognize outstanding achievements,
To improve morale, motivation, and job satisfaction of employees.

Types of Job Promotion / Bases of Job Promotion

There is a controversy as to what should be the criteria for promotion-the seniority or merit. Trade unions prefer seniority, while management prefers ability or merit.

Promotions usually are based on merit and/or seniority.

3 basic types of promotion are;

Seniority-based promotion;
Merit-based Promotion.
Seniority and Merit-based Promotion

1. Seniority-Based Job Promotion

Seniority denotes the relative duration of service or length of service in the same post and the same company. In some situations, the most senior employee gets the promotion. There is a positive connection between service, talent, and the knowledge obtained by the employees. It is based on the convention that the first should be given the first opportunity in all rights.

Unions demand seniority as a basis of promotion because layoffs and discharges are frequently based on seniority. Seniority refers to employees' relative length of service, and the seniority promotion plan is as old as civilization.

The oldest son succeeded his father as king. The method of calculating seniority or length of service is an important part of a seniority plan. It should provide for the following factors:

when seniority starts to accumulate,
effects of various interruptions to employment, and
the effect of promotions upon seniority calculation.

Seniority begins to accumulate as soon as an employee is hired.

In the case of union contracts, it is important to note whether or not new employees have seniority rights during their probation period and whether or not the probationary period will be included in the calculation of seniority.

Again, when a large number of employees are hired on the same date, a question of seniority may arise unless a priority basis is established. In such cases, priority may be established upon such an arbitrary basis as an alphabetic listing. There are merits as well as demerits of considering seniority as the sole criteria for the promotion.

Advantages of Seniority-Based Promotion

It is comparatively simple to measure the service and review the seniority. There would be full support from everyone as there is no scope for nepotism, prejudice, and judgment.

It builds a sense of certainty of getting promotions to every employee. Senior employees get a sense of contentment since they are esteemed, and their effectiveness cannot be disputed. It diminishes the possibility of complaints and disagreements.

Nair and Nair (1999); Hall (1998) have pointed out the merits of seniority criteria in promotion, which are listed below:

Easy and simple,
Focus on individual career prospects and security,
Avoid favoritism and arbitrariness by management,
Risk is reduced,
The policy is more acceptable to the majority of employees and unions,
It reduces employee turnover,
It is compatible with the oriental culture of respecting age and experience.

Demerits of Seniority-Based Promotion

Seniority-based promotions usually are limited to hourly employees. It presumes that the employees learn more fairly with the length of service.

In point of fact, employees learn up to a certain age, and learning skill is retreating over a phase of time. It kills the inquisitiveness to build up since everyone will be promoted with or with no development.

It demotivates the young and more capable employees, which might give rise to a higher turnover of young employees. Judging the seniority can also be complicated in carrying out as tribulations like job seniority, company seniority, earlier experience, etc., pose diverse considerations.

The efficiency of the organization is expected to be reduced.

Merit is devalued. Capable young people are likely to become impatient about waiting -for- "Dead- man's shoes" and will quit looking for better prospects elsewhere.
Promote mediocre performance and inefficiency. Consequently, this may mean that the company comes to be managed by second-grade people who have stated because they don't have enough calibers to make a move.
Limit the influence of managers as their evaluation of the performance of individual employees has little effect on their performance.
There is no guarantee that experience or length of service increases ability.
No incentive for training and development for employees.
Inability to attract talented hands from outside.
It goes against obtaining and sustaining a competitive advantage.

2. Merit-Based Job Promotion (Merit as a Sole Basis for Job Promotion)

Merit refers to knowledge, skill, talent, competence, and capability as different from education, training, and past service record. Merit-based promotions occur when an employee is promoted because of superior performance in the current job.

In principle, it is agreed by all that promotion should be based on merit. Merit-based promotion occurs when an employee is promoted because of superior performance in the present job.

The use of merit as a basis for promotion causes difficulties because what management regards as a merit union may consider favoritism and can distrust management's sincerity when it claims the right to promote solely on merit.

When management adopts merit as a basis for promotion, it must evolve controls to recognize merit objectively, which will refute the allegations of favoritism.

As far as possible, merit rating or employee evaluation should be based on operating facts. The plan of employee evaluation should include an arrangement for consultation and perhaps vocational guidance.

By discussing a person's strong and weak points before vacancies occur, a two-edged weapon is employed. Those who are ambitious can get suggestions on how to improve themselves.

And a record of such discussions can be cited for those who did not get the desired job because they failed to follow suggestions. What is important is to discuss the standards before as well as after application.

Advantages of Merit-Based Job Promotion

The merit system makes better deployment of resources at a high level. Merit works as a golden handshake concerning employee turnover.

Capable employees are motivated to do their best and add to the organizational effectiveness. The merit system encourages the employees to obtain new knowledge/skills for all-around development.

Disadvantages of Merit-Based Job Promotion

A lot of people have doubts about dying management integrity in evaluating merit. The measurement of merit is extremely complicated. The methods of merit measurement are prejudiced. Merit refers to past accomplishments; however, it does not signify potential achievement. For this reason, the intention of promotion might not be served if merit is taken as the only decisive factor.

3. Seniority and Merit-based Promotion (Combine Seniority and Merit)

Seniority-merit should be the basis of promotions where merit can be objectively tested. Merit is a term that includes efficiency, skill, aptitude, etc.

When a combination of merit and seniority is desirable, the play of discretion in the matter of selection cannot be overlooked.

Sound management will pursue a policy of properly balancing these factors. The policy can derive strength if worked in consultation with the workers.

The policy works in the following manner:

As between two employees with equal merit, the one with the greater seniority will be given preference.
If two employees are of the same seniority, give weight to ability in the promotion.
A set of job and employee specifications should be carefully prepared so that claimant for jobs can be shown that requirements are objective and not capricious.
A complete and thoroughly understood promotion plan should be promulgated.
A good system of merit rating should be installed. Performance standards should be set as objectively as possible so that all may more readily accept the measurement of employee productivity and cooperation.

Job Promotion Policy

A policy is a guideline for action. It varies by organization. Promotion policies must be clearly stated and widely circulated and explained to all employees since they are sensitive. A comprehensive and realistic promotion policy should be evolved covering the following points:

Lines and ladder of promotion should be made clear to all employees to know where the possibility of promotion lies.
The policy must specify rules regarding the proportion of internal and external recruitment for each grade.
Prescribing training and development programs before promotion.
Promotion from within the organization should be encouraged.
Top management must lay down its policy regarding weight given to seniority and merit. Both merit and seniority should be considered.
Weightage given to the recommendation of an immediate superior is an essential policy.
A method of assessing the potentials of employees must be introduced.
It must be fair and equitable.
It must be consistent.
Promotional plans require follow-up.
Service records must be maintained to avoid confusion and misunderstanding.

Benefits of Having a Job Promotion Policy

Generally, the following reasons for promoting employees are advanced:

Promotion from within fosters inbreeding.
Promotion may increase the effectiveness of the organization in attaining its service and profit objectives.
It creates an inside market for talent and experience, sheltered from the competition and readily available as a resource to the company.
It increases interest in training and self-development as necessary preparation for promotion.
It creates a feeling of content with the present conditions and encourages ambition to succeed within the company.
It promotes employee morale and stimulates efficiency.
It increases job satisfaction.

Differentiate between Job Promotion and Upgrading

Promotion results in an improvement in pay prestige position-designation and responsibilities of an employee within his or her organization. Where a change in designation and raise in pay does not add to promotion is dray promotion.

Upgrading is one kind of promotion. This type of promotion involves an increase in responsibilities, pay, and a change in designation.

But the employee concerned does not transgress the job classification. This type of promotion refers to horizontal promotion when the employee concerned naturally transgresses the vertical promotion job classification.

Job Promotion Definition in Business

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