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Promotion, Transfer

and separation

Promotion is upward movement of employees

Promotion means an improvement in pay, prestige,
position and responsibilities of an employee within
an organization.
A mere shifting of an employee to a different job
which has more working hours, better location and
more pleasing working conditions does not amount
to promotions
Purposes of promotion
To motivate employees for 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 of
the organization
To fill up higher vacancies from within the organization.
To build loyalty, morale and a sense of belongingness
in the employee.
To impress upon others that opportunities are available
to them too in the organization, if they perform well
Principles of promotion

Clear policy for filling the positions from internal

employees or through recruitment. Top positions
are normally filled through recruitment and lower
and middle positions through promotions
Basis of promotion usually is merit or seniority
Basis of promotion may also be competence of the
Vacancy or non vacancy promotion
Promotion should be preceded by job analysis and
performance evaluation

Transfer is also called as horizontal or lateral

movement of employees.
Transfer involves change of job (accompanied by a
change in the place of the job) of an employee
without a change in responsibilities and
Reasons of transfer

Shortage of employees in one department and

surplus employees in other department
To sort out boss employee issues
Correction of faulty initial placement of an
Monotony can be avoided by transfer, it also help in
raising productivity
Health reasons (climate may not be good to work
for longer periods)
Family related issues
Principles of transfer

The frequency of transfers and the minimum

period between transfers need to be decided upon
and made known to all the employees.
The authority which would handle transfers is to be
The criteria for entertaining transfers need to be
laid down and strictly adhered to.
The area of the organization over which transfers
can be made need to be defined.
Performance of the employee should be assessed
before transfer.
Types of Transfers

Specifically transfers may be production,

replacement, versatility, shift and remedial
Production transfers: to meet the shortage of
employees during production
Replacement transfers: to replace senior positions by
junior officers
Versatility Transfers: To make employees versatile and
competent in different areas
Shift transfers: transfers between work shifts
Remedial transfer: on request of employees (also called
personal transfers)
Voluntary separations

When employee decides to terminate his/her

relationship with the employer. Tow types are
Quits: out of dissatisfaction in the current job, and
Retirements: Occur when the employees reach end of
their careers
Involuntary separations

Employer terminates the employee

Three reasons
Organization is passing through a lean phase
Faulty hiring leading to a mismatch
Employee exhibits deviant behavior vitiating the

Discharges: also called termination and is done when
the employer find the employee to be non performing
Layoffs: Temporary separation. Section 2 (KKK) of the
Industrial Disputes Act, 1947, defines lay-off as a 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. It may be for a definite period, after
which the employee may be recalled
Retrenchment: termination by the employer because of
productivity or economic reasons. It differs from the
dismissal because here it takes place without any fault of
the employee.

VRS (Voluntary Retirement Scheme): sending

home surplus labor. Also called golden handshake
plan. It is with benefits
Like Hindustan Lever VRS consisted
A lump sum payment equal to 2.25 times in July 1992
salary multiplied by remaining years of service
(subsequently reduced to 15 years service)
Pension equal to 70% of the July 1992 salary payable till
the age of 60 (the companys retirement age)
Prizes such as computers, trucks, houses, and so forth
(99 in all) to be decided on the basis of a lucky draw.

Rightsizing: means reducing the size of the

workforce or increasing it to maintain the employee
strength at the most desired level.
Mostly it is downsizing only
Triggered by
The companys bottom line is threatened
Technological advancements renders people redundant,
Organizational restricting

It is quite painful for the employee and his family.

Affects the morale of all the employees
Managing separations

Positive outcomes
Organizations become fitter and trimmer
Saving on wage and salary bill
Fresh ideas brought by new entrants
Negative outcomes
Disrupts employee morale, may rather add to cost
Cost of turnover include retirement costs and hiring and
training costs