NATIONAL LAW UNIVERSITY, JODHPUR

(Winter session- January-May 2020)

HRM ASSIGNMENT CA-3

CHALLENGES OF PROMOTION OF EMPLOYEES MERIT SYSTEM

Submitted by: Submitted to:

Ria Mehta (1741) Mrs. Vedantam Leela
B.B.A. L.L.B (Hons.) Faculty of H.R.M.
(2nd SEMESTER)
 TABLE OF CONTENTS

Acknowledgement ................................................................................................................... iii

Introduction ................................................................................................................................ 3
Chapter 1 .................................................................................................................................... 4
Defining promotion ................................................................................................................ 4
Chapter 2 .................................................................................................................................... 4
System of merit ...................................................................................................................... 4
Chapter 3 .................................................................................................................................... 5
Challenges of promotion of employees merit basis. .............................................................. 5
Solution to the above challenges............................................................................................ 7
Bibliography .............................................................................................................................. 8

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 ACKNOWLEDGEMENT

The completion and success of this project could happen only because of the steadfast

support given by Mrs. Vedantam Leela, Faculty of H.R.M., National Law University,

Jodhpur. I would like to take this opportunity to thank her for her words of guidance and

constructive feedback.

Last, but not the least, I would like to thank my parents and my batch mates who constantly

raised our morale so that I could finish this assignment with satisfaction to the fullest of my

capabilities even in these times of quarantine.

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 INTRODUCTION

Promotion or Career Advancement is a process through which an employee of a company is

given a higher share of duties, a higher pay-scale or both. A promotion is not just beneficial

for the employees but is also highly crucial for the employer or business owners. It is

responsible for boosting the morale of the employees, increasing their productivity and hence

improving upon the overall profit earned by the organisation

Promotion of employees bring with it a number of challenges for the employer. Employer has

to ensure that the correct employee is promoted and this works as a motivation for others to

work hard and not demotivation that the organisation is biased or creating tension among the

employees.

There are 2 ways in a competitive model by which employees are given promotion based on

employee performance, productivity, skills, experience, knowledge and other such factors.

These are: - (a) Merit based promotion, (b) Merit-cum-seniority.

Merit based promotion is a system in which promotion takes place solely based on the

performance, qualification, hard work and skills of the employees and the most qualified

employee is prone to get the promotion.

In the other system i.e. Merit-cum-seniority, your seniority in the organisation is also given

consideration along with the required qualifications. A balance is stroked between these two

considerations and then only the promotion of the candidate is decided.

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CHAPTER 1

DEFINING PROMOTION

According to Clothier and Spiegel, “Promotion is the transfer of an employee to a job which

pays more money or one that carries some preferred status.”

According to Yoder, “Promotion provides incentive to initiative, enterprise and ambition;

minimizes discontent and unrest; attracts capable individuals; necessitates logical training for

advancement and forms an effective reward for loyalty and cooperation, long service etc.”

Promotion is the ultimate motivating factor for any employee because moves employee

forward in hierarchy of concern organisation added with additional responsibility, higher

respect, honour, with increase in grade pay and allowances.

Section 6 of The Sales Promotion Employees (Conditions of Service) Act, 1976 briefs about

the-Application of certain Acts to sales promotion employees.

CHAPTER 2

SYSTEM OF MERIT

Organizations undertake different bases of promotion. It depends upon the nature, size and

management of the organizations. There are some systems that have been evolved and used

as models or bases for promotion.

Some organizations (Public Sector Undertakings) decide promotions solely on the basis of

seniority while others (Private Corporate) finalize promotions on the basis of merit. There are

also organizations those who decide promotions on the basis of seniority-cum-merit or merit-

cum-seniority.

1. Seniority: - Seniority of an employee refers to the relative length of service in an

organization. When seniority is considered as the basis of promotion, the rule is to

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 promote the employee having the longest length of service, irrespective of the

employee is competent to occupy a higher post or not. The reason behind taking

seniority as the basis of promotions 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.

2. Seniority-Cum-Merit/Merit-Cum-Seniority: - A combination of both seniority and

merit can be considered as the basis of promotions, thereby satisfying the

management for organizational effectiveness and the employees and trade unions for

respecting the length of service.

3. Merit System: - Merit indicates an employee’s knowledge, skills, abilities and

efficiency measured from the employee’s educational qualifications, experience, job

performance and training records. To get promotion on the basis of merit requires

hard work and sincerity on the part of the employee. To further put it simply, an

employee is promoted on the basis of excellent and superior performance in the

current job. This is known through performance appraisal done by the organization.

According to Peter and Hull (1969) the members of an organization where promotion

is based on achievement, success, and merit will eventually be promoted beyond their

level of ability and reach the ceiling of their performance. Employees tend to be given

increasing responsibility and authority until they cannot continue to work competently.

This is commonly known as Peter Principle.

CHAPTER 3

CHALLENGES OF PROMOTION OF EMPLOYEES MERIT BASIS.

Following are some of the challenges posed to promotion of employees on merit basis: -

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 1. This can lead to dissatisfaction and unhappiness of senior employees. Senior

employees are essentially those who have been in the organisation for the longest

period of time and have the maximum period of

experience.

2. Many senior and experienced employees leave the

organization. This is consequence of the above

problem wherein the senior employees feel

disrespected and the feeling of belongingness for the organisation reduces for them.

3. Loyalty and length of service are not rewarded. A person may be meritorious but may

not be loyal to the organisation which will become a great disadvantage for the

organisation in the near future. Also those who have

been working with the organisation for a longer

time won’t be motivated and this will affect overall

turnover of the employees.

4. Subordinates are interested to work under a senior and experienced boss but at the

same time if a senior is made to work under a subordinate even though skilled will

disrupt the order of command in the organisation.

5. It is not easy to measure merit. Personal prejudices, biases and union pressures

usually come in the way of promoting the best performer. This can be very

detrimental for overall motivation of all the employees and not just the senior ones.

These tests are subjective ones and personal biases are very probable to kick in.

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 6. This basis of promotion leads to favouritism and jealousy. Favouritism and jealousy

are very prone to creep in the organisation

if proper measures aren’t taken place.

7. Difficulty in judging merit as there are a

lot of factors such qualification, skillset,

knowledge etc. which have to be taken into consideration before giving the verdict of

promotion to any one person and possibility of different people being good in

different things exists.

8. Merit indicates past achievement, may not denote future potential. This is a valid

question that may be asked by other employees and create dissatisfaction among

them.

9. Chances of Nepotism: - Nepotism is most commonly seen in family run businesses.

While favouring family members is very

common in family businesses, it runs the

dual risks of demoralising non-family

members and increasing complacency

among family members. The after effects

of favouring family members for a senior

level position on the existing employees are severe.

SOLUTION TO THE ABOVE CHALLENGES

 Seniority and the time spent in the organisation should also be a factor while deciding

the merit. System of seniority cum merit can be considered and thought upon.

 Also sometimes with the age person becomes unwelcoming to new concepts.

 Positivity and fairness should be involved in the decision making process so that

promotion acts as a motivation for the employee rather than a question of biasedness.

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 BIBLIOGRAPHY

1. Internet sites: -

 http://www.whatishumanresource.com/promotions-of-employee

 https://www.cleverism.com/when-and-how-to-promote-your-employees/

 https://www.businessmanagementideas.com/human-resource-management-

2/employee-promotion/bases-of-promotion/20566

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