Purposes and Basis of Promotion

26/08/2022 0 By indiafreenotes

Promotion means the advancement of an employee to a higher job involving more work, greater responsibility and higher status. It may or may not be associated with the increment in salary. Sometimes, salary of the employee also increases with the promotion. Sometimes it is not so. When an employee is promoted but his salary does not increase it is known as dry promotion. Promotion means the placement of an employee on a higher post involving greater amount of responsibility, better status, more pay and more perks.

Some people think that promotion means the increment in pay. The reality is not so. If the salary of an employee increases or the pay scale changes to a higher one, it is only known as up grading or salary increment. However, it can now be regarded as promotion. Generally, promotion is associated with the increase in salary, status, facilities, responsibilities and job.

Performance appraisal forms a basis for HR decisions on training, salary increase, promotion, transfer and separation. Of these, promotion, transfer and separation functions are effective methods to adjust the size of the workforce of an organisation. Promotion, transfer and separation provide workforce flexibility and mobility required to meet the needs of the organisation.

Promotion is one of the best forms of incentives and it provides higher responsibilities, better salary, high morale and job satisfaction to the employees. Practically, all the employees aspire for career advancement and promotion is an advancement of the employee in the organisational hierarchy.

Edwin B. Flippo, “A promotion involves a change from one job to another that is better in terms of status and responsibilities.”

Scott & Spriegal, “A promotion is the transfer of an employee to a job that pays more money or that enjoys some better status.”

In the words of Paul Pigors and Charles Myers, “Promotion is an advancement of an employee to a better job, better in terms of greater responsibilities, more prestige or status, greater skill and specially increased rate of pay or salary”.

(a) To recognize and reward the efficiency of an employee.

(b) To attract and retain the services of qualified and competent people.

(c) To increase the effectiveness of the employee and of the organisation.

(d) To motivate employees to higher productivity.

(e) To fill up higher vacancies from within the organisation.

(f) To impress upon those concerned that opportunities are available to them also in the organisation if they perform well.

(g) To build, loyalty, morale and sense of belongings in the employees.

Watkins, Dodd and others mention the purposes of promotion as under:

(a) To reduce discontent and unrest.

(b) To furnish an effective incentive for initiative, enterprise and ambition.

(c) To conserve proved skill, training and ability.

(d) To attract suitable and competent workers.

(e) To suggest logical training for advancement.

As Youder and others observe, “Promotion provides incentive to initiative, enterprise and ambition, minimizes discontent and unrest, attracts capable individuals, necessitates logical training of advancement and forms an effective reward for loyalty and cooperation, long service, etc.”.



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 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 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.

This practice of promoting employees is followed in unionized industrial establishments, government-owned undertakings and sometimes in private corporate and educational institutions.

This basis of promotion has the following advantages and disadvantages:


  1. Seniority being quantifiable provides an objective means of identifying the personnel eligible for promotion.
  2. It is easy to measure the length of service and administer the rule.
  3. There is less scope for subjectivity or arbitrariness in fixing seniority.
  4. It gives a sense of certainty of getting promotion to every employee and their turn of promotion.
  5. It is also considered that seniority and experience go hand in hand. Hence it is right to have promotions on this basis.
  6. Subordinates are interested to work under a senior and experienced boss.
  7. As promotion is predictable under this system, it generally reduces employee turnover.


  1. Seniority always does not indicate competence.
  2. The idea that employees learn more with length of service is not valid.
  3. Employees learn up to a particular stage. After that grasping power diminishes.
  4. This basis of promotion de-motivates the young and competent employees.
  5. It kills the zeal and interest to learn and develop.
  6. It does not guarantee quality staffing of promotional vacancies as merit or ability is altogether ignored.
  7. Judging seniority practically is a difficult task.
  8. It discourages creativity and innovation in the organization.


In this case 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. 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. In non- unionized organizations promotions are made on the basis of merit. In unionized organizations merit is the basis of promotion for non-productive employees. Seniority should be considered as the basis of promotion, when there are more than one employees of equal merit.

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. Employees tend to be given increasing responsibility and authority until they cannot continue to work competently. This is commonly known as Peter Principle.

The principle holds that in a hierarchy, members are promoted so long as they work competently. Eventually they are promoted to a position at which they are no longer competent (their level of incompetence), and there they remain, being unable to earn further promotions and thus reach their careers’ ceiling in the organization.


  1. It motivates the employees to work hard, improve their knowledge, acquire new skills and become a part of increasing organizational efficiency and effectiveness.
  2. Efficiency is encouraged, recognized and rewarded.
  3. Competent employees are retained.
  4. It motivates the competent employees to exert all their resources and contribute them to the organizational efficiency and effectiveness.


  1. This creates unhappiness among the senior employees.
  2. Many senior and experienced employees leave the organization.
  3. This basis of promotion leads to favouritism and jealousy.
  4. It is not easy to measure merit. Personal prejudices, biases and union pressures usually come in the way of promoting the best performer.
  5. Loyalty and length of service are not rewarded.


Managements mostly prefer merit as the basis of promotion as they are interested in enriching organizational effectiveness by enriching its human resources. But trade unions favour seniority as the sole basis for promotion in order to satisfy the interests of majority of their members. Both seniority and merit as the bases of promotions have their advantages and disadvantages.

Hence it is necessary for the organizations to give due weightage to both seniority and merit while promoting their employees. A combination of both seniority and merit can be considered as the basis of promotions, there by satisfying the management for organizational effectiveness and the employees and trade unions for respecting the length of service.

There are various ways for striking a balance between seniority and merit which are as follows:

  1. Minimum Length of Service and Merit:

Under this method all those employees who complete the minimum years of service, say five years, are made eligible for promotion and then merit is taken into consideration for selecting the employees for promotion from the eligible employees. Most of the commercial banks in India follow this method of promoting employees from clerk positions to officers.

  1. Measurement of Seniority and Merit through a Common Factor:
  2. Due weightage is given to seniority and merit (for example 30% for seniority and 70% for merit).
  3. Length of service is measured by points with the help of assigned weightage (for example one point for every six months of completed service) with a maximum of 40 points.
  4. Merit is also measured by points with the help of assigned weightage.
  5. Points assigned to a candidate under both the heads of seniority and merits are added up.
  6. Merit list is prepared and employees for promotion are selected on the basis of their ranks(for example if there are four employees for one post i.e. A, B, C and D and if their merit points are 50,60,85, and 65 respectively then the third employee i.e. C is selected for promotion.
  7. Minimum Merit and Seniority:

A minimum score of merit which is necessary for the acceptable performance on the future job is determined and all those employees who secure minimum score are declared eligible. Employees are selected for promotion based on their seniority only from the eligible pool.

The National Commission on Labour has suggested that as a general rule, particularly among the operative and clerical categories i.e. lower levels, seniority should be the basis of promotion. In respect of middle management, technical, supervisory and administrative personnel, seniority- cum-merit should be the criterion for promotion. For the top level management, merit should alone be the guiding factor for promotion.