Promotions,

Transfer &

Separation

Ms. Anubha RastogiAstt. Prof, Vidya School Of Business

2015-16

PROMOTION:

‘A movement to a position in which responsibilities and presumably, prestige

are increased’

• Advancement within a organization is ordinarily labeled as ‘Promotion’.

• It is an upward movement of an employee from current job to another that is

higher in pay, responsibility, status and organizational level.

• A mere shifting of an employee to a different job which has better working

hours, better pleasant working conditions does not imply promotion.

• It is a vertical movement in rank and responsibility.

• According to E.B. flippo “ promotion involves a change from one job to another that

is better in the terms of status and responsibilities.

• According to Scott and Spreigal: “A Promotion is the transfer an employee to a job

that pays more money or that enjoys some preferred status.:

Examples of promotion:

HR Assistant receives a promotion to HR Generalist

HR Generalist receives a promotion to a dual role of HR Generalist and Employee

Development Coordinator

HR Generalist is given a promotion to HR Manager

HR Manager is given a promotion to Manager of Human Resources and

Administration

HR Manager is promoted to HR Director

Purpose / Objective of Promotion:

Promotions have a positive impact on the employees. Beside higher wages

they also satisfy the higher order needs of employees.

Purpose / Objective of Promotion:

To recognize an individual’s performance and reward him for his work.

To put the employee in a position where he will be of greater value to the company.

To promote job satisfaction among the employees and give them an opportunity for

unbroken continuous service.

To build up morale , loyalty and a sense of belonging on the part of the employees.

To demonstrate effective career development plans.

To attract suitable and competent employees for the organization.

To create among employees a feeling of contentment with their present conditions

and encourage them to succeed in the company.

Types of Promotion:

Open promotions: An organization or a company considers all individuals

within it as a potential candidate and announces it to various aspirants internally.

Closed promotions: An organization or company in which the candidate for

higher position opening or vacancies is restricted and not open for all the

individuals ,within the organization and also does not announce the vacancies

internally.

Frequently Companies Follow A Combination Of Both The Systems.

Multiple Chain promotions: Which provides for a systematic linkage of each

position to several others. Such promotions identify multi-promotional

opportunities through clearly defined avenues of approach.

Dry promotions :Dry promotions are those that are given in lieu of increase in

compensation.

Horizontal promotion :Promotions have similar kind of work. Ex – lower grade

to higher grade without any change in work content.

Vertical promotion : Those which change the nature of the work. Ex –

Supervisor to Manager.

Promotion Programme:

It must provide for a uniform distribution of promotional opportunities

throughout the organization. This means that the ratio of internal promotions to

external recruitment must be the same at various levels in all departments.

A sound promotion programme is that it must tell employees in advance what

avenues for advancement exist.

There should be some definite system for the selection of employees who are to

be promoted from within the promotion zone.

Finally all sanctions must be approved by the concerned line heads.

A sound promotion policy must provide for suitable system of follow up and

review.

Promotion Policy

Every organization should have a promotion policy.

Each organization should strike a balance between the internal sources of

personnel promotion and external sources of recruitment on one hand and

between merit and ability as against length of service on the other.

Characteristics of a sound promotion policy:

1) It should have consistency and be co-related to the career planning.

2) It should be fair and impartial.

3) It should be a planned activity , so that there is no phenomena of

‘bunching’ or no period of ‘ promotional drought’.

Seniority

Seniority means length of

recognized service in an organization

Seniority means the calculation of

time from when an employee has

joined the company and served for

how many years in the company.

The senior most person in the lower

grade shall be promoted as and

when there is an opening in the

higher position

Seniority is suggested as the criteria

for promotion on the plea that there

is a positive correlation between

length of the service and talent

Merit

Merit means ability to work .

It denotes an individual

employee’s skill, knowledge, ability,

efficiency and aptitude as

measured from educational,

training and past record

If the merit is adopted as basis of

promotion then the person in the

lower grade ,no matter his junior

most in the company, shall be

promoted.

It encourage all employee to

improve their efficiency

Bases of Promotion

Seniority Merit

Advantages - Easy to measure the length of service

-Trade union generally emphasis on

seniority.

-Security and certainty is also plus point

-Minimize the scope of grievances and

conflicts

-Reducing labour turnover

-It provides a sense of satisfaction to

senior employees and is in line with the

Indian Culture of respecting seniority in

all walks of life.

-It implies the knowledge, skills and performance

record of an employee.

-It motivates competent employees to work hard

and acquire new skills.

-It helps to maintain the efficiency of the

organization by recognizing talent and

performance

-It helps to attract and retain young and

promising employees in the organization

Disadvantages -The assumption that the length of the

service indicates talent is not valid

because beyond a certain age a person

may not learn.

-Performance and potential of an

individual is not recognized.

-It demotivates and demoralize the

young employees who are talented

-Kills the zeal and interest for self

development

-The concern fails to attract young and

hardworking employees

-Measuring Merit is not easy, subjective

judgement may involve.

-Many Employee, particularly trade unions

distrust the management’s integrity in

judging merit.

-And when younger employees are

promoted over the older one, the older

employees may feel insecure.

-They may leave the organization as well.

• A transfer is a horizontal or lateral movement of an employee from one job,

section, department, shift plant or position to another at some other place where

salary, status and responsibility are usually the same.

• Transfer is defined as “a lateral shift causing movement of individuals from one

position to another usually without involving any kind of change in duties,

responsibilities, skills needed or compensation”.

Meaning of Transfer

Purpose of Transfer• To meet organizational needs.

• To meet employees own request.

• To utilise properly services of an employee when he is not performing and management feels he may be

useful elsewhere.

• To increase versatility of the employee.

• To adjust the workforce.

• To replace new employee by an employee who has been in the organization for a sufficiently long time.

• To penalise employee or due to avoid trade union pertaining issues.

• The policy must be impartial and known to each employee.

• The basis of the transfer should be indicated i.e. based on seniority or skill.

• Decide the rate of pay to be given to the transferee.

• Intimate the fact of transfer to the person concerned well in advance.

• Should be in writing and duly communicated to all concerned.

• Locate the authority in some officer who may initiate and implement transfers.

• Transfer cannot be made frequently and not for the sake of transfer only.

• Facilities such as leave, special allowance for shifting, etc. should be clearly

prescribed to the transferee.

Policy for Transfer

Intradepartmental transfers

within same section of the same department and effected without the

issue of any transfer order to the employee. He may be given oral

instructions. However must be informed of such transfers.

Interdepartmental transfers

from one department to another are decided by mutual consultations

among the departmental heads when such transfers are of the

permanent nature or long duration. Written orders signed by the

personnel manager are issued to the employee.

Types of Transfer

• Increase in productivity and effectiveness of the organization.

• Greater job satisfaction to employees.

• Stabilize fluctuating job needs.

• Improve employee skills.

• Remedy for wrong placement.

• Improve labour relationships.

• Develop employees for future promotions.

• Avoid monotony and boredom.

Benefits of Transfer

Demotion has been defined as the assignment of an individual to a

job of lower rank and pay usually involving lower level of difficulty

and responsibility.

Demotions serve as a useful purpose in the sense that they keep

the employees alert and alive to their responsibilities and duties.

Demotion

Causes of Demotion When departments are combined, bosses are often required to accept

lower level position since jobs are eliminated.

Inadequacy on the part of the employees in terms of job performance,

attitude and capability.

When older employees are unable to adjust as per change in

technology.

Ill health or personal reasons.

Demotion is also used as disciplinary measure.

SEPERATIONSeparation means cessation of service with the organisation for one or other reason.

The employee may be separated from HR payroll due to:

• Resignation

• Discharge and dismissal

• Suspension and retrenchment

• Lay off

RESIGNATION: Resignation may be put in voluntary by the employees on the ground of

health, better opportunities elsewhere or maladjustment with the company policy and

officers or for reasons of marriage.

DISCHARGE: A discharge involves permanent separation of an employee from the pay roll for

violation of company rules or for inadequate reasons. Proper procedure of discharge must be

conducted and it should not be an impulsive act. There has to be a written warning for the

same along with discharge letter at the time of discharge. Adequate provision should exist

for review of discharged employee’s case.

SEPERATION

DISMISSAL: A dismissal is the termination of services of an employee by the way

of punishment for some misconduct or for some unauthorised and prolonged

absence from duty.

SUSPENSION: It may be awarded during inquiry is being conducted. During

suspension employee gets subsistence allowance.

RETRENCHMENT: Permanent termination for economic reasons of the

organisation. In the Industries Disputes ACT 1947, defines retrenchment as

termination by the employer of the services of workmen for any reason.

A 3 months’ notice in writing needs to be given to the employee and wages in

lieu of such notice.

VRSVRS (Voluntary retirement schemes)

VRS is legally found to be giving no problem to employers, employees and their

unions. The essence of the voluntary retirement scheme which is approved by the

government involves voluntary separation of employees who are above age of 40

years or have served company for minimum 10 years. The company may offer

various benefit for employees which are tax exempted till 5Lakh.

REASONS FOR PROPOSING VRS

• Recession

• Intense competition resulting in downsizing

• Changes in technology

• Joint ventures with foreign establishments

• Take overs and mergers

• Business reengineering process

• Product technology obsolescence

MERIT:

• There is no legal obstacle in implementing the VRS

• It offers an employee an attractive financial compensation than permitted under

law.

• Voluntary nature of the schemes precludes the need for enforcement which may

give rise to conflicts and disputes.

• It allows flexibility and can be applied only to certain divisions, department where

there is excess manpower

• It allows overall savings in the employee costs thus lowering the overall costs

DEMERITS OF VRS

• To a certain extent it creates fear, a sense of uncertainty among

employees

• Sometimes the severance costs are heavy

• Trade unions generally protest the operation of such schemes and may

cause disturbance in normal operations.

• Some of the good, capable and competent may apply which may cause

embarrassment.