when there are vacancies in an organization, they can be filled up by the internal or external candidates. Though the organization prefers to fill up the vacancies by the external candidates through the selection procedure, the internal candidates may also apply for post and may be tested and selected for higher level job in the organizational hierarchy at par with external candidates. Is such upward movement of an employee a promotion? Or it is purely selection? It is purely a selection. If the organization prefers to fill a vacancy only by the internal candidates, it assigns that higher level job to the selected employee from within through promotion tests. Such upward movement can be said as promotion.


“Promotion is advancement of an employee to a better job- better in terms of greater responsibility, more prestige or status, greater skills and especially increased rate of pay or salary.”

“The upward reassignment of an individual in an organizational hierarchy, accompanied by increased responsibilities, enhanced status and usually with increased income though not always so.”

Promotion is the reassignment of a higher level job to an internal employee with delegation of responsibilities and authority required to perform that higher job and normally with higher pay. Thus, the main conditions of promotion are:-
  • Reassignment of higher level job to an employee than what he is presently performing.
  • The employee will naturally be delegated with greater responsibility and authority than what he has had earlier.
  • Promotion normally accompanies higher pay.
  • Promotion may be temporary or permanent depending upon the organizational needs and employee performance.

Organizations promote the employee with a view to achieve the following purposes:-
  • To utilize the employee’s skills, knowledge at the appropriate level in the organizational hierarchy resulting in organizational effectiveness and employee satisfaction.
  • To develop competent spirit and inculcate the zeal in the employees to acquired the skills, knowledge etc. required by higher level jobs.
  • To develop competent internal source of employees ready to take up jobs at higher level in the changing environment.
  • To promote employee’s self development and make them await their turn of promotions. It reduces labour turnover.
  • To promote a feeling of content with the existing conditions of the company and a sense of belongingness.
  • To promote interest in training, development programmers and in team development areas.
  • To build loyalty and to boost morale.
  • To reward committed and loyal employees.
  • To get rid of the problems created by the leader of workers’ unions by promoting them to the officer’ levels where they are less effective in creating problems.

  • Merit is taken to denote an individual employee’s skills, knowledge, ability, efficiency and aptitude as measured from educational, training and past employment record. The merits of merit system of promotion are:
  • The resources of higher order of an employee can be better utilized at a higher level. It result in maximum utilization of human resources in an organization
  • Competent employees are motivated to exert all their resources and contribute them to the organizational efficiency and effectiveness
  • It works as golden hand-cuffs regarding employee turnover,
  • Further it continuously encourages the employees to acquire new skill, knowledge etc. for all-round development.
Despite these advantages the merit systems suffer from some demerit. They are:
  • Measurement or judging of merit is highly difficult.
  • Many people, particularly trade union leaders, distrust the management’s integrity in judging merit.
  • The techniques of merit measurement are subjective.
  • Merit denotes mostly the past achievement, efficiency but not the future success. Hence, the purpose of promotion may not be served if merit is taken as sole criteria for promotion.


Seniority refers to relative length of service in the same job and in the same organization. The logic behind considering the seniority as a basis 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. This system is also based on the custom that the first in should be given first chance in all benefit and privileges.

Advantages of seniority as a basis of promotion are:

  • It is relatively easy to measure the length of service and judge the seniority.
  • There would be full support of the trade unions to this system.
  • Every party trust the management’s action as there is no scope for favoritism and discrimination and judgment.
  • It gives a sense of certainty of getting promotion to every employee and of their turn of promotion.
  • Senior employees will have a sense of satisfaction to this system as the older employees are respected and their inefficiency cannot be pointed out.
  • It minimizes the scope for grievances and conflicts regarding promotion.
  • This system seems to reserve the purpose in the sense that employees may learn more with increase in the length of service.
In spite of these merits, this system also suffers from certain limitations. They are:
  • The assumption that the employees learn more relatively with length of service is not valid as this assumption has reverse effect. In other words employees learn up to a certain age and beyond that stage the learning ability of the cognitive process diminishes.
  • It denominates the young and more competent employees and results in employee turnover particularly among the dynamic force.
  • It kills the zeal and interest to develop as everybody will be promoted with or without improvement.
  • Organizational effectiveness may be diminishes through the deceleration of the human resource effectiveness as the human resource consists of mostly undynamic and old blood.
  • Judging the seniority though it seems to be in the theoretical sense. it is highly difficult in practice as the problems like job seniority, company seniority, zonal/regional seniority, service in different organizations, experience as apprentice trainee, trainee, researcher, length of service not only by days but hours and minutes will crop up.
  • Thus the two main basic of promotion enjoy certain advantages and at the same time suffer from certain limitations. Hence, a combination of both of them may be regarded as an effective basis of promotion.

Management mostly prefers merit as the basis of promotion as they are interested in enriching its human resources. But trade union favour seniority as the sole basis for promotion with a view to satisfy the interests of majority of their members.

Hence a combination of both seniority and merit can be considered as the basis for promotion satisfying the management for organizational effectiveness and employees and trade union for respecting the length of service. A balance between seniority and merit should be struck and a new basis is to be developed. There are several ways in striking the balance between these two basis.viz:-

Minimum length of service and merit:-

  • Under this method all those employees who complete the minimum service, say five years, are made eligible for promotion and then merit is taken as the sole criteria for selecting the employee for promotion from the eligible candidates. Most of the commercial bank in India has been following this method for promoting the employees from clerk’s position to officer’s position.
  • Measurements of seniority and merit through a common factor.
Minimum merit and seniority:-

In contrast to the earlier methods, minimum score of merit which is necessary for the acceptable performance on the future job is determined and all the candidates who secure minimum score are declared as eligible candidates. Candidates are selected for promotion based on their seniority only from the eligible candidates.

Benefit of promotion:-

  • Promotion places the employees in a position where an employee’s skills and knowledge can be better utilized.
  • It creates and increases the interest of the other employees in the company as they believe that they will also get their turn.
  • It creates among employees a feeling of content with the existing conditions of work and employment.
  • It increases interest in acquiring higher qualifications, in training and in self development with a view to meet the requirement of promotion
  • Promotion improves employee morale and job satisfaction.
  • Ultimately it improves organizational health.
Problems with promotion:-

Though promotions benefit the employee and the organization, it creates certain problems. They are disappointment of the candidates, refusal of promotions etc.

Promotion disappointment some employees:-

Some employees who are not promoted will be disappointed when their colleagues with similar qualifications and experience are promoted either due to favoritisms or due to lack of systematic promotion policy. Employee may develop negative attitude and reduce their contributions to the organization and prevent organizational and individual advancement.

Some employee refuse promotion:-

There is a general tendency that employee accept promotion. But their are several incidents where employees refuse promotions. These include promotion together with transfer to an upward place, promotion that level where the employee feels that he will be quite incompetent to carry out the job, delegation of unwanted responsibilities, and when trade union leader feel that promotion causes damage to their position in trade union.

The other problems associated with the promotion are: some superiors will not relieve their subordinates who are promoted because of their indispensability in the present job and inequality in promotional in different departments, regions and categories of jobs.

Promotion problems can be minimized though a career counseling by the superiors and by formulating a systematic promotion policy.

Promotion policy

Every organizational has to specify clearly its policy regarding promotion based on its corporate policy. The characteristics of a systematic promotion policy are:

  • It should be considered the sense that policy should be applied uniformly to all employees irrespective of the background of the persons,
  • It should be fair and impartial. In other words it should not give room for nepotism, favoritism etc.,
  • Systematic line of promotion channel should be incorporated
  • It should provide equal opportunities fro promotion in all categories of jobs, departments, and regions of an organization
  • It should insure open policy in the sense that every eligible employee should be considered for promotion rather than a closed system which consider only a class of employees
  • It should contain clear cut norms and criteria for judging merit, length or service, potentiality etc.
  • Appropriate authority should be entrusted with the task of making final decision
  • Favoritism should not be taken as a basis for promotion
  • It should contain promotional counseling, encouragement, guidance and follow-up regarding promotional opportunity, job requirement and acquiring the required skills, knowledge etc. it should also contain reinforcing the future chances in the mind of rejected candidates and a provision for challenging the managements decision and action by employee or union within the limits of promotion policy.


As already noted, a promotion involves an increase in status, responsibilities and pay. But, in certain cases, only the pay increases, and the other elements remain stagnant. In other cases, the status only increases without a corresponding increase in pay or responsibilities. Depending on which elements increase and which remain stagnant, promotions may be classified into the following types:

1) Horizontal Promotion:-

This type of promotion involves an increase in responsibilities and pay, and a change in designation. But the employee concerned does not transgress the job classification. For example, a lower division clerk is promoted as an upper division clerk. This type of promotion is referred to as upgrading’ the position of an employee.

2) Vertical Promotion:-

This type of promotion results in greater responsibility, prestige and pay, together with a change in the nature of the job. A promotion is vertical when a canteen employee is promoted to an unskilled job. The concerned employee naturally transgresses the job classification.

3) Dry Promotions:-

Dry promotions are sometimes given in lieu of increases in remuneration. Designations are different but no change in responsibilities. The promotee may be given one or two annual increments.

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