Traditionally, promotions were expected advancements in an employee's career, often involving an advancement up the hierarchy and a new title, increased responsibilities, and higher pay. And while that still occurs, today’s organizational structures are flatter, without as many levels to move up. This changes how promotions occur. Today, promotions may involve a lateral promotion to develop skills in another area and are influenced by individual aspirations and organizational needs, focusing more on career development and employee engagement.
Types of Promotions
There are three main types of promotions.
- Vertical Promotions
- The most common form of promotions, and what usually comes to mind when most people think of promotions.
- This promotion moves employees up within the same work area, typically involving higher responsibilities, a new title, and increased status and pay.
- Example: Accountant to Accounting Supervisor
- Lateral Promotions
- Moves an employee to an equivalent role in the organization, at a similar level, with a similar pay scale, but have changed their job responsibilities.
- Offering a horizontal promotion allows employers to provide a form of career growth even when the organization lacks the necessary funding for raises.
- Example: Accountant to Financial Analyst
- Dry Promotions
- Commonly referred to as "in name only" promotions, this promotion adds increased responsibilities and status along with a new title, but does not include an increase in pay or benefits, which are typically associated with a promotion.
- Used to motivate employees when budget constraints limit salary increases.
- Example: Accountant with added general ledger responsibilities
Considerations for Effective Employee Promotions
Navigating the complexities of employee promotions requires a thoughtful approach that balances organizational goals with fair and transparent practices. Here are essential elements for a successful promotion process:
- Establish Promotion Policy: Create a clear policy on promoting employees to form the foundation for fair and consistent decision-making.
- Set Clear Criteria: Establish transparent promotion criteria based on performance, skills, and organizational needs. Clearly define the expectations and responsibilities associated with each level. For example, have a clear understanding of what the titles of Senior, Supervisor, Manager and Vice President mean within your organization to ensure consistency of title usage across the organization.
- Ensure Fair Selection: Consistent application of policies and practices will help to avoid bias and maintain employee confidence in the process, while also reducing risk of unfair employment practices.
- Leverage Meritocracy: Promote based on merit or performance rather than tenure alone. Recognize achievements that align with the organization's goals and values, reinforcing their importance.
- Create Career Pathways: Develop structured career paths that outline potential advancement opportunities while ensuring alignment with business objectives. Communicating these pathways to employees provides them with ideas on their career potential within your organization.
- Provide Ongoing Feedback: Regular feedback is crucial for employees to understand their strengths, areas for improvement, and readiness for promotion. It is also important to understand an employee’s career aspirations. Are they interested in a vertical or lateral promotion – or are they happy where they currently are in their career?
- Train Managers: Train managers on the promotion policy and criteria. Provide them with knowledge on compensation practices and the career pathways available. Realize that managers are promotion decision-makers who are human; meaning they are prone to bias. Avoid bias sneaking into promotion decisions by training managers to be self-aware and ask questions of others to ensure they are not affected by the halo effect, stereotypes they carry, or affinity bias.
- Communicate Often: Communicate promotion decisions openly and provide rationale behind them. Ensure employees understand the pathways to advancement and the importance of maintaining job title integrity.
The Push for Endless Promotion
Promotions are often seen as motivational tools, boosting morale and encouraging employees to strive for excellence. They signal recognition of an individual's achievements and contributions, fostering loyalty and commitment. Moreover, promoting from within can harness existing talent and reduce turnover rates, saving recruitment costs and maintaining organizational knowledge.
Despite the benefits, excessive or misaligned promotions can lead to several challenges:
- Title Inflation: Over-promotion can result in inflated job titles that no longer reflect actual responsibilities. This can confuse internal and external stakeholders about an employee's role and capabilities.
- Structural Inconsistency: Rapid promotions may disrupt the organizational structure, creating disparities in pay scales and creating supervisory challenges. This can strain relationships among peers and lead to a perception of unfairness.
- Erosion of Standards: Diluted job titles may diminish the value associated with higher-level positions, reducing the prestige and respect traditionally associated with senior roles.
Summary
While promotions are essential for employee motivation and retention, organizations must balance these benefits with maintaining the integrity of job titles and organizational structure.
Organizations can balance these benefits and navigate the push and pull effectively by:
- Implementing clear promotion policies
- Fostering a culture of meritocracy
- Aligning promotions with organizational goals
- Communicating promotion decisions and their rationale to maintain transparency and mitigate misunderstanding
This approach not only enhances employee satisfaction, professional growth and engagement, but also ensures organizational coherence.
Contact Us
Contact Beth Ostrem or Amy Ryan for expertise on promotion philosophy and policy development, compensation insight and equitable pay, manager training, and communication best practices.
