Promotions

Demotions
Transfers
Separation
Absenteeism
Turnover
 INTRODUCTION

Internal movement of employees which takes place between

the jobs in sections, departments or divisions of the
organization.

This is done to match the employee’s skill with the

requirements of the job and those of the organization
continuously.

Internal mobility can take any or more of the form of

promotion, demotion, transfer, etc.
 PROMOTIONS
Promotion is an upward movement of employee in the organisation’s
hierarchy, leading to
• higher job involving more work,
• greater responsibility
• higher status
• increment in salary
• Greater privileges
• high morale and job satisfaction

Edwin B. Flippo, “A promotion involves a change from one job to

another that is better in terms of status and responsibilities.”
Purpose of Promotion

• To motivate employees to higher productivity.

• To attract and retain the services of qualified and competent people
to recognize and reward the efficiency of an employee.
• To increase the effectiveness of the employee and the organization.
• To fill up higher vacancies from the within the organization.
• To build loyalty, morale and the sense of belongingness in the
employee.
• To impress upon others that opportunities are available to them too in
the organization, if they perform well.
Promotion is a double edged weapon.

If handled carefully, it contributes to employee satisfaction and

motivation.

If it is mishandled, it leads to discontentment, frustration, skepticism,

bickering among the employees and culminates in a high rate of
employee turn over.
Types of Promotion

1. Horizontal Promotion:
When an employee is shifted in the same category with increase in pay,
responsibilities and change in designation, it is called horizontal promotion.
For example : Second Division Assistant is promoted as First Division Assistant.

2. Vertical Promotion:
When an employee is shifted from a lower category to higher category with
increase in pay, status and responsibility it is called vertical promotion.
For example a sales Manager is promoted as General Manager in the company.

3. Dry Promotion:
When promotion is made without increase in salary or remuneration, it is called
“dry promotion”.
For example a college professor promoted as Head of the Department without
increase in salary.
 BASIS OF PROMOTION
1. Promotion by Seniority
SENIORITY AS A BASIS OF PROMOTION implies length of service in the
organization. This system is also based on the tradition of respect for older people
The merit's are:
• It is easy to administer.
• There is less scope for subjectivity or arbitrariness in fixing seniority.
• Seniority and experience go hand in hand; therefore, it is right and proper to make
promotions on this basis.
• Subordinates are willing to work under an older boss
• Loyalty is rewarded.

Demerits are:
• Seniority is no indication of competence.
• Young and competent people get frustrated and might leave the organization.
• Kills ambition and zeal to improve performance
• Fails to attract young employees
Promotion by Competency

The merits of promotion by competency:

• Efficiency is encouraged, recognized and rewarded.
• Competent people are retained because better prospects are open to
them.
• Productivity increases.

The disadvantages of promotion by merit are:

• Discontentment among senior employees.

• Scope for favouritism.
• Loyalty and length of service are not rewarded.
• Opposition from union leaders.
 DEMOTION
➢ Demotion implies the assignment of an employee to a job of lower
rank with lower pay
➢ Demotion is the opposite of promotion.
➢ It is a downward movement of employees in the organizational
hierarchy
➢ It affects the status, career and income of the employee.
➢ Demotion is the punishment for incompetence or mistake of
serious nature on the part of the employee.
➢ It is serious types of the penalty or punishment and should be
given rarely and only under exceptional circumstances and
tactfully.
CAUSES OF DEMOTION
• disciplinary tool against offending employees.
• Inadequacy of knowledge
• Unable to cope with changes
• Organisational re-organization

Demotions should be made for genuine reasons.

Demotion usually treated as an insult and naturally resented by the
employees in one way or the other.
It is, therefore, desirable to avoid demotions as far as possible.
Demotions should be an exception but not the normal rule of the
organization.
Demotion Policy
Yoder, and Stone has suggested a five fold strategy relating to the
demotion of the employees in an organization.
• A clear list of rules along with the punishable offences be made
available to all the employees.
• Any violation be investigated thoroughly by a competent authority.
• In case of violation, it is better to state the reasons for taking such
punitive actions clearly and elaborately.
• Once violation is proved, there should be a consistent and equitable
application of the penalty.
• There should be enough room for review.
 TRANSFER
➢ A transfer implies a lateral movement of an employee in the hierarchy of
positions with the same pay and status.
➢ Transfers may be either company initiated or employee initiated.
➢ Dale Yoder "A transfer involves the shifting of an employee from one job
to another without changing the responsibilities or compensation".
➢ This can also be defined as a change in job within the organization where
the new job is substantially equal to the old in terms of pay, status and
responsibilities.
Transfers may be either temporary or permanent.
Temporary transfers may be due to
• temporary absenteeism
• shifts in the workload
• Vacations

Permanent transfers may be due to

• shifts in the workload
• vacancies requiring the special skill of the transferred employee
• ill-health of the employee
The purposes of the Transfer:
• To increase the effectiveness of the organization.

• To increase the versatility and competency of key positions.

• To deal with fluctuations in work requirements.

• To correct incompatibilities in employee relations.

• To correct, erroneous placement.

• To relieve monotony.

• To adjust workforce.

• To punish employees.
Types of Transfers
Production Transfer: Such transfers are resorted to when there is a need of
manpower in one department and surplus manpower in other department.
Replacement Transfers: This takes place to replace a employee who has
been in the organization for a long time and there by giving some relief to an
old employee from the heavy pressure of work.
Remedial Transfers: these transfers are made to rectify the situation
caused by faulty selection and placement procedures.
Versatility Transfer: Such transfers are made to increase versatility of the
employees from one job to another and one department to another
department. Transfer (Job Rotation) are the tool to train the employees. Each
employee should provide a varied and broader job experiences by moving
from one department to another.
Benefits of transfers
• Improve employee skills
• Remedy faulty placement decisions
• Prepare the employee for challenging future
• Improve employee satisfaction
• Improve employee-employer relations

Problems with transfers

• Inconvenient to employees.
• Employees may or may not fit in the new location
• Shifting of experienced hands may affect productivity
• Discriminatory transfer may affect employee satisfaction.
Transfer Policy:
A sound, just and impartial transfer policy should be evolved in the organization to govern
all types of transfers, so that the superiors cannot transfer their subordinates arbitrarily
1. Transfer policy must be in writing and be made known to all the employees
2. The policy must very clearly specify the types and the circumstances under which
company initiated the transfer will be made.
3. It should indicate the executives who will be responsible for initiating and approving the
transfers.
4. The policy should specify the region or unit of the organization within which transfers
will be administered.
5. It should be prescribed in the policy whether the training or retraining is required on the
new job.
6. Transfer should be clearly defined as temporary or permanent.
 EMPLOYEE SEPARATION

➢ Employee separation occurs when employees cease to be a member

of an organization.

➢ Agreement between employer & employee comes to an end.

➢ Employees decide to leave the organization

➢ Organization ask employee to leave.

➢ Reasons for employee separations are voluntary or involuntary.

 Types of Separation
Voluntary Separations

Quits
• An employee decides to quit when he is dissatisfied with the present job or he is
getting a better job.

• Organisations often encourage quits through cash incentives. Popularly known

as voluntary retirement scheme (VRS)

Retirements

• It occur when employees reach the end of their careers.

• Retirement differs from quits. When the employee retires, he or she carries
several benefits with himself or herself. Such a privilege is denied to the
employee who quits.
Involuntary Separations
Employers decide to terminate employees when
• Organization is passing through lean period and is unable to maintain the
existing labour
• Initial faulty hiring resulting in mismatch between job and employee.
• Employee exhibits unusual behavior.

Discharge/Dismissal
A discharge takes place when the employer discovers that it is no more desirable to
keep an employee any longer.

It is expensive as the firm must seek replacement, hire and train the new hire.

The following reasons lead to the dismissal of an employee:

• Excessive absenteeism
• Serious misconduct
• False statement of qualification at the time of employment
• Theft of company property
Layoff

A layoff is a temporary separation of the employee.

It is “the failure, refusal or inability of an employer to give employment to a worker

whose name is present on the rolls but who has not been retrenched”.

A layoff may be for a definite period on the expiry of which the employee will be recalled
by the employer for the duty. The compensation must be equal to half of the normal
wages the employee.

A layoff may be due to

• Epidemic,
• Shortage of raw materials
• Accumulation of stocks
• Breakdown of machinery etc.
Retrenchment

It refers to the termination of the employee because of

• the replacement of labour by machines
• the closure of a department due to lack of demand of the products

retrenchment also entitles the employees to compensation.

According to the industrial disputes act, 1947 is equivalent to 15 days average pay for
every competed year of continuous service.

Voluntary retirement scheme (VRS)

both public and private sector have been sending home surplus labour through Voluntary
retirement scheme VRS also called the “golden hand shake plan”. Handsome
compensation is paid to the leaving employee
 Employee Absenteeism

It refers to failure of an employee to report for duty when he is scheduled to

work. It is an unauthorized absence from the workplace.

1. Authorised Absenteeism:
If an employee absents himself/ herself from work by taking permission
from his superior

2. Unauthorised Absenteeism:
If an employee absents himself from work without informing or taking
permission

3. Willful Absenteeism:
If an employee absents himself from duty willfully,
Features

• Absenteeism is the lowest on a day when wages and bonus are

paid. It is higher immediately after pay day.

• Absenteeism is generally higher in the night shifts than in the day

shifts.

• Absenteeism is much higher in coal and mining industries than in

organized industries.

• Absenteeism is related to marriages/ festivals/harvest seasons etc.

 REASONS ABSENTEEISM MAY OCCUR

Organizational Factors:
• Dullness, monotony of work cause an employee to lose interest in work.
• Leniency towards absenteeism causes high rate of absenteeism.
• Militant attitudes of trade unions also cause high absenteeism.
• Ineffective and defective selection and placement procedure
• Heavy workload leads to excessive fatigue
• Dissatisfaction with the work leads to dislike of work.
• Poor and bossy supervisors cause discontentment, unrest, conflict and tension
causing absenteeism.
Social Factors
• Inadequate transport facilities keep workers away from work.
• Seasonal causes like cultivation season, marriage season, religious festivals, lead to
absenteeism.
• Childcare
• Bullying and harassment so they can avoid the unpleasant situation.

Personal Factors:

• The rate of absence is high in the case of unskilled and young workers because of
their personal problems.
• Women workers are more prone to absenteeism because of their personal and family
problems.
• Alcoholic and drug addicts show higher tendency of absenteeism.
• Inferiority complex, maladjustment, job dissatisfaction, neglect by family members,
etc., cause workers to lose interest in the job.
Important effects of absenteeism
• Absenteeism hinders the process of production.
• As a result of loss of production, the cost of production increases.
• It results in the reduced margin of profits of the industry.
• So the customers have to pay more for the commodity.
• The production targets are upset.
• Due to absenteeism of regular workers, the industry has to depend upon casual
employees,
• Organization is unable to meet the demand of market in full and it causes delay in the
supply to the valuable customers.
• It reduces the incomes of the employees
• It may lead to indiscipline among the workers.
How to Reduce Absenteeism

• Create a clear attendance policy and set expectations

• Reduce workplace stress
• Provide feedback
• Reward good attendance
• Design an employee wellness program
 Employee turnover

Employee turnover is the rate of displacement of the personnel employed

in an organisation due to resignation, retirement or retrenchment.

Turnover has sometimes been defined as ‘‘the ratio of the number of

organizational members who have left during the period being
considered divided by the average number of people in that organization
during the period’
Types of Turnovers
Voluntary turnover: It is initiated by the employee;
example, a worker quits to take another job.
Involuntary turnover: It is initiated by the organization;
Example: a company dismisses an employee due to poor performance
Dysfunctional turnover: High value employee leaving the organisaion. It is harmful to the organization
Example: the exit of high performers and people with hard-to-replace skills,
Functional turnover: Less valued employee leaving. It does not hurt an organization.
Examples exit of poor performers or employees whose talents are easy to replace.
Avoidable turnover: Those that could be prevented/organization may be able to influence.
For example, if employees are leaving because of low job satisfaction, the company could improve the situation by
redesigning jobs
Unavoidable turnover: Those over which the organization has little or no control.
For example: employees leave because of health problems
WHAT CAUSES THE EMPLOYEES TO LEAVE AN ORGANIZATION
• employees feel that their work or workplace is not what they expected,
• there is a discrepancy between the job and the person.
• there is very little training and feedback,
• there are very few opportunities for growth and progress.
• employees feel devalued and unrecognized,
• employees feel stressed due to overwork
• imbalance between work and life,
• lack of trust
• tension with other employees
• poor communication between management and blue-collar workers
• job-related factors are one of the causes of employee turnover
• dissatisfaction with working conditions,
• supervision disputes,
• scheduling conflicts
• wage inequality,
• job dissatisfaction
IMPACT OF TURNOVER ON THE ORGANIZATION
• Organization needs to hire and train new employees,
• New employee needs time to be productive.
• Turnover is expensive, significant amounts are spent on the selection and
training of new employees
• The assurance of good employee quality is at risk
• Hinders skills development
• Lack of talented and skilled employees can lead to a management problem
• Productivity, profitability, quality of products and services are affected.
• Relationships, morale, among the workers is affected.
• Employee turnover in an organization can affect customer service
 Effective Retention plans

• new compensation plans,

• Job redesign,
• Strengthening social ties,
• Hiring the less mobile.
• Training and career development opportunities
• Career advancement
• Improved work environment
• Increasing health care benefits
• team building,