1. A STUDY ON
PROMOTION, TRANSFER, DEMOTIO
N
• PRESENTED BY
E. VENKATA RAO

2. CONTENTS
PROMOTIONS
TRANSFER
DEMOTIONS

3. PROMOTIONS
• Meaning
• Types of Promotion
• Purpose of Promotion
• Bases of Promotion
• Benefits of Promotion
• Promotion Principles

4. Meaning
• According Pulapa Subba Rao “Promotion
is the reassignment of a higher level job to
an internal employee (which is supposed
to be assigned exclusively to internal
employees) with delegation of
responsibilities and authority required to
perform that higher job and normally with
higher pay”

5. Types of Promotion
• Promotion is of three types. They are:
1. Vertical promotion
2. Upgradation
3. Dry promotion
1. Vertical promotion:
Under this type of promotion, employee is
moved to the next higher level, in the
organizational hierarchy with grater
responsibility, authority, pay and status.

6. • Continue…..
2. Upgradation:
Under this Promotion, the job is upgraded in
the organizational hierarchy. Consequently, the
employee gets more salary, higher
authority, responsibility.
3. Dry promotion:
Under this Promotion, the employee is
moved to the next higher level in the
organizational hierarchy with greater

7. Purpose of Promotion
• Organizations promote the employees with a view to
achieve the following purposes:
 To utilize the employee’s skill, knowledge at the
appropriate level in the organizational hierarchy
resulting in organizational effectiveness and employee
satisfaction
 To develop competent internal source of employees
ready to take up jobs at higher levels in the changing
environment
 To promote training, development programs and in
team development areas
 To build loyalty and to boost morale

8. Bases of Promotion
• Organizations adopt different bases of
promotion depending upon their
nature, size, management etc.
• Generally, they may combine two or more
bases of promotion.
• The well-established bases of promotion are:
Merit
Seniority

9. • Merit:
 Merit is taken to denote an individual employee’s
skill, knowledge, ability, efficiency and aptitude as
measured from educational, training and past
employment record.
• Seniority:
 Seniority refers to relative length of service in the
same job and in the same organization.
 The logic behind considering the seniority as a bases
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

10. • Merit-cum-seniority:
 A combination of both merit and seniority can be
considered as the basis for promotion satisfying the
management for organizational effectiveness and the
employees and trade unions for respecting the length
of service.

11. Benefits of Promotion
Promotion of employees from lower ranks to higher
positions benefits the organization as well as
employees:
 It places the employees in a position where an
employee’s skill and knowledge can be better utilized;
 It creates and increases the interest of the other
employees in the company ass they believe that they
will also get their turn;
 Promotion improves employee morale and job
satisfaction;
 Ultimately it improves organizational health.

12. Promotion principles
• Every organization has to satisfy clearly its policy
regarding promotion based on its corporate policy.
The principles are:
 Systematic line of promotion channel should be
incorporated,
 It should provide equal opportunities for promotion in
all categories of jobs, departments and regions of an
organization,
 It should contain clear cut norms and criteria for
judging merit, length of service, potentiality etc.,
 Appropriate authority should be entrusted with the task

13. TRANSFER
• Meaning
• Purpose of Transfer
• Types of Transfer
• Benefits of Transfer
• Problems of Transfer
• Transfer Principles

14. • Meaning:
It is defined as “…the moving of
employee from one job to another.
It may involve a
promotion, demotion or no change
in job status other than moving
from one job to another”

15. Purpose of Transfer:
 Organizations resort to transfers with a view to attain
the following purposes:
To meet the organizational requirements:
 Organizations may have to resort to transfer of
employees due to changes in technology, change in
volume of production, production scheduled, product
line, quality of production etc.,
To satisfy the employees’ needs:
 Employees do need transfer in order to satisfy their
desire to work under a friendly superior, in a
department/region where opportunities for

16. Types of Transfer
Transfer can be classified into the following types:
I. Production Transfer: transfer caused due to
changes in production
II. Replacement Transfer: it is caused due to
replacement of a long
standing employee in the same job
III. Rotation Transfer: transfers initiated to increase the
versatility of emp..
IV. Shift Transfer: transfer of an employee from one
shift to another
V. Remedial Transfer: transfers initiated to correct the

17. Benefits of Transfer
 Transfer benefits both the employees and the
Organization.
 Transfer reduce employees’ monotony, boredom etc.
and increase employees’ job satisfaction. Further, they
improve employees’ skill, knowledge etc.
 They correct erroneous placements and inter-personal
conflicts. Thus, they improve employees’ morale.
 Further, they prepare the employee to meet
organizational exigencies including fluctuations in
business and organizational requirements.
 Thus, they enhance human resource contribution to
organizational effectiveness.

18. Problems of Transfer
• Despite these benefits, some problems are
associated with transfers. They are;
• Adjustment problem to the employee to the new
job, place, environment, superior and
colleagues
• Transfer from one place to another result in
Mandays,
• Company initiated transfers result in reduction
in employee contribution
• Discriminatory transfers effect employee
morale, job satisfaction, commitment and

19. Transfer Principles
• Organizations should clearly specify their policy
regarding transfer.
• Systematic transfer policy should contain the following
items:
 Specification of circumstances under which an
employee will be transferred in the case of company
initiated transfer
 Reasons which will be considered for personal
transfers, their order of priority etc.
 Reasons for mutual transfer of employees
 Specification of basis for transfer like job
analysis, merit and length of service

20. DEMOTIONS
• Meaning
• Reasons for Demotions
• Demotion Principles

21. Meaning:
Demotion is the “ reassignment of a lower
level job to an employee with delegation of
responsibilities and authority required to
perform that lower level job and normally with
lower pay ”.
Organizations use demotions less frequently as
it affects the employee’s career prospects and
morale.

22. Reasons for Demotions
Unsuitability of the Employee to Higher
Level Jobs:
 Employees are promoted based on seniority and past
performance. But some of the employees are demoted
on these two bases may not meet the job
requirements of the higher jobs.
Adverse Business Condition:
 Generally it force the organization to reduce quality of
production, withdrawal of some lines of products.
Consequently, organizations minimize the number of
employees.

23. Reasons for Demotions
continue….
New technologies and new methods of
operation demand new and higher level skills.
• If the existing employees do not develop
themselves to meet these new
requirements, organization demote them to the
lower level jobs where they are suitable.
Employees are demoted on disciplinary
grounds. This is one of the extreme steps and
as such organizations rarely use this measure

24. Demotion Principles
• Organizations should clearly specify the demotion
policy. A systematic demotion policy should contain
following items:
 Specification of a superior who is authorized and
responsible to initiate a demotion
 Jobs from and to which demotions will be made and
specifications of line or ladders of demotion
 Specification of basis for demotion like length of
service, merit or both
 It should provide for an open policy rather than a
closed policy