“According to research published by LinkedIn, after analyzing 32 million employee profiles, around 70% of workers who get promotions are still at the same company after three years — but only 45% of employees who don’t get promotions hang around.”
An employee promotion recognizes an individual’s contributions, skills, and potential and communicates to them that their efforts are valued. Thus, a well-managed employee promotion process is essential for enhancing company morale, increasing workforce motivation, and improving talent retention. A strategic approach to promoting employees is necessary to ensure promotions are fair and in alignment with company goals and values. This guide explores effective employee promotion strategies, best practices, and key considerations for implementing a structured promotion process.
What is an Employee Promotion?
An employee promotion is usually given to an employee who has displayed exceptional performance or has developed the appropriate skills and knowledge necessary to take on additional job responsibilities.
Why are Employee Promotions Important?
For individual employees, promotions play an important role in maintaining job satisfaction, and in particular, retaining high-performers. For example, employees who earn promotions feel appreciated, recognized, and rewarded for their contributions to the business.
From an organizational perspective, promoting employees contributes to employee engagement by demonstrating that hard work is valued and can result in career advancement. Furthermore, promotions provide a clear path for career progression within the company, reducing the probability of talented employees seeking opportunities with rival companies.
“Employees ripe for promotion are often the ones who volunteer to spearhead projects or ask for more responsibility. They’re your staff members who consistently do what it takes to get the job done. They don’t come up with excuses.” – Jennifer Dublino, Business.com.
How Many Types of Promotions are there?
Employee promotions can take on several forms, each catering to different aspects of an employee’s career progression and the company needs.The following are three distinct types of employee promotion:
Horizontal Promotion
A horizontal promotion occurs when an employee moves to a new position at the same level within a business. This type of promotion rewards employees for their hard work and commitment to company aims and gives them the opportunity to continue developing their skills.
Horizontal promotions include an increase in title and pay without significant changes in responsibilities, such as from Manager to Senior Manager.
Vertical Promotion
A vertical promotion is when an employee is promoted upwards to a position with greater responsibilities and higher compensation. Employers tend to reserve vertical promotions for employees who have excelled in their current roles and demonstrated the potential to take on more challenging duties.
A vertical promotion involves increased pay, more responsibilities, and decision-making authority. For example, a manager promoted to director has received a vertical promotion.
Dry Promotion
A dry promotion, also known as a no-raise promotion, includes an increase in responsibilities and titles with no corresponding increase in salary or benefits.
Dry promotions are typically viewed unfavorably by employees who receive them. However, these promotions generally come with a new job title, adding valuable prestige, and the opportunity allows employees to gain new experience that looks good on future resumes.
“When an employee asks for more responsibility, it means they have more capacity and are eager to help the entire team succeed. When they seek to know “what else they can do,” they are demonstrating they are ready for the next step. If they are actively anticipating their leader’s or team’s needs and taking initiative before deadlines, it is time for a promotion.” – Cheri Rainey, Rainey Leadership Learning.
What to Consider When Promoting an Employee?
Managers should use the following four criteria when considering an employee promotion:
1) Experience
Work Experience is the duration and depth of an employee’s tenure and exposure to different roles within a company. An employee’s experience encompasses the practical knowledge gained over time, often leading to a nuanced understanding of the business culture, processes, and challenges.
An employee’s experience level is an important consideration in the promotion process. Past experience often correlates with an employee’s ability to handle more complex and high-stakes responsibilities in the future. Employees with extensive experience within a company are likely to have developed valuable interpersonal relationships and a deep loyalty to the company and its management.
2) Performance
Employee performance gauges an individual’s effectiveness in their current role, assessed through their ability to meet or exceed set goals and expectations. Performance includes the quantity and quality of work produced and the employee’s consistency and reliability over time.
Performance is important in promotion decisions as it directly reflects an individual’s ability to handle new or increased responsibilities. High-performing employees often demonstrate a strong work ethic, positive attitude, strong problem-solving skills, and the ability to inspire and lead others, making them prime candidates for advancement.
3) Skillset
Skillset refers to an employee’s specific abilities and expertise, including technical skills relevant to their job and soft skills like communication and leadership. Evaluating an employee’s skill set helps determine if they are capable of handling the complexities and demands of the higher position.
When managers promote employees with the right skills, they ensure that the promoted employee will continue to perform at a high level.
4) Personal Motivation
Personal motivation is the internal drive that compels an employee to excel in their professional role. Motivation includes intrinsic factors such as a passion for the work, a desire for personal growth, and a commitment to the company’s mission.
Assessing personal motivation is crucial as motivated employees are more likely to be engaged, proactive, and resilient in the face of challenges and stress. Further, employees with high personal motivation tend to pursue continuous improvement. These employees are often enthusiastic about taking on new responsibilities.
“Ensuring your decision-making process for promotions is transparent is essential because it fosters trust among your employees and demonstrates that you award promotions fairly based on the established promotion criteria. This equitable approach motivates them to perform at their best and invest in their career growth. “—Amanda Chua, Omni HR.
Tips to Improve the Employee Promotion Process
Here are actionable tips for employers to consider when promoting employees:
Establish Clear Promotion Criteria
The employer must define specific, measurable promotion criteria, including required experience, performance metrics, and necessary skills. Communicate these criteria to all employees so they understand what is expected of them to be considered for promotion.
Process transparency helps company leaders manage expectations and ensure that the evaluation component remains fair.
Conduct Regular Performance Reviews
Managers and supervisors must conduct regular performance reviews to assess employees’ progress and identify potential candidates for promotion. Use these reviews to provide constructive feedback, set goals, and discuss career aspirations.
Regular performance reviews allows for an ongoing dialogue helping employees understand their strengths and areas for improvement, keeping them motivated and on track for advancement.
Provide Career Development Opportunities
HR managers must provide employees with opportunities for training and development to build the skills necessary to take on more responsibility. In addition, direct managers should encourage participation in skill development workshops, seminars, and courses relevant to their career path.
Investing in professional development shows employees that the company is committed to their growth and prepares them for future promotions.
Use Open Communication
Senior management must create a work culture where employees feel comfortable discussing career goals and aspirations with managers and co-workers. Regularly meet with employees to gain awareness of their career goals and provide guidance on how they can achieve them.
Open communication helps managers identify motivated individuals who are ready for promotion and ensures the promotion process aligns employee ambitions with company objectives.
Structure the Promotion Process
HR leaders must develop a formal process for evaluating and promoting employees based on merit; including clear application, assessment, and decision-making steps.
It is critical that the promotion process is accurately documented and consistently implemented across the organization to maintain fairness. A structured process minimizes human bias, maintains equity, and provides a clear career path for employees to follow.
“Promotions are most successful when they involve lots of communication–both before and after the bump in title. Employers should strive to stay abreast of employees’ career goals and find or create advancement opportunities that serve those goals.” – Pete Newsome, President of 4 Corner Resources.
Final Comments
In sum, promoting employees is a key part of maintaining a motivated and dedicated workforce. When employers recognize hard work by advancing employees’ careers, they concurrently enhance employee morale, increase staff productivity, and retain top talent. Moreover, implementing a fair and transparent promotion process ensures that organizational goals and employee career progression are in alignment. With the well-designed employee promotion process in place, company leaders can be confident that the right people are selected for the right positions at the right time.
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