Promotion Meaning, Types, Benefits, Limitations

Table of Contents:-

    • Meaning of Promotion
    • Definition of Promotion
    • Purposes of Promotion
    • Types of Promotion
    • Benefits of Promotion
    • Limitations of Promotion

Meaning of Promotion

Human resource management professionals strongly associate emotional significance with the term “promotion.” When there are vacancies in an organisation, they can be filled up by internal employees or external candidates. While the organization generally favours filling vacancies with external candidates through the selection process, internal candidates are also welcome to apply. They may undergo testing and be selected for higher-level positions within the organisational structure, just like external candidates. In other words, a promotion is the movement of a person to a higher-level position in the organisation. Thus, promotion is the most important part of many employees’ careers.

Definition of Promotion

According to Yoder, “Promotion provides incentives to initiative, enterprise and ambition, minimises and unrest, attracts capable individuals; necessitates logical training for advancement and forms an effective reward for loyalty and cooperation, long service, etc.”

As per Paul Pigors and Charles A. Myers, “Promotion is the advancement of an employee to a better job- better in terms of greater responsibility, more prestige or status, greater skill and especially increased rate of pay or salary”.

According to Arun Monappa and Mirza S. Salyadain, “Promotion is the upward re-signing of an individual in an organisation’s hierarchy, accompanied by increased responsibilities, enhanced status and usually with increased income though not always so”.

Purposes of Promotion

Organisations promote the employees to achieve the following purposes:

Purposes of Promotion

1) To Develop Competitive Spirit: To develop competitive spirit and inculcate zeal in the employees to acquire the skill, knowledge, etc., required by higher-level jobs.

2) To Promote Employee Self-Development: To promote employee self-development and make them await their turn for promotions. It reduces labour turnover.

3) To Utilise Employee Skill: To utilise the employee skill and knowledge at the appropriate level in the organizational structure resulting in organisational effectiveness and employee satisfaction.

4) To Develop Competent Sources: To develop competent internal sources of employees ready to take up jobs at higher levels in the changing environment.

5) To Help in Problem-Solving: To get rid of the problems created by the leaders of workers’ unions by promoting them to the officer levels where they are less effective in creating problems.

6) To Promote a Feeling of Content: To promote a feeling of content with the existing conditions of the company and a sense of belongingness. This helps in building loyalty and boosting the morale of employees.

7) To Promote Employees’ Interest: To promote interest in training, development programmes and team development areas.

8) To Reward Employees: To reward employees for past performance, commitment, and loyalty and to encourage them to continue their efforts.

Types of Promotion

Types of promotion are as follows:

1) Open versus Closed Promotion

A company is considered to have an open promotion system when it is willing to consider all individuals within its organization as potential candidates. Additionally, the company makes an effort to announce position openings. In cases where an organization does not announce vacancies or restrict candidacy, making promotion opportunities unavailable to all individuals within the organization, the company is referred to as having a closed promotion system. Very often, an organization has a combination of these two concepts.

2) Horizontal Promotion

This type of promotion involves both a rise in responsibilities and a salary increase. However, the job classification remains the same. For example, a lower-division clerk is promoted to a higher-division clerk.

3) Vertical Promotion

Most of the time, when we refer to the term promotion, we refer to this context. In vertical promotion, there is a change in the job classification, responsibilities, status, and salary. For example, a production superintendent is promoted to production manager.

4) Dry Promotion

The term “dry promotion” refers to a situation in which an individual’s responsibilities and status are elevated without any increase in salary or other financial benefits. For example, a Professor in a college becomes Head of the Department.

Benefits of Promotion

Promotions are beneficial for to following reasons:

1) Lesser Cost of Training

Individuals familiar with the organizational structure and issues, often referred to as insiders, can easily adapt to new roles. Their close connection with the company results in significantly lower training costs.

2) Permits Individual Growth

All employees, regardless of their position, should experience a sense of personal and professional growth. However, it’s important to note that not every employee wants challenges beyond those inherent in their current roles.

3) Rewards Good Work

Promotions are enduring and establish a conceptual foundation of organisational behaviour to inspire ongoing excellent performance. Promotions offer a platform for management to recognize, acknowledge, reward, and rectify initial appointment mistakes, provide incentives to top-performing employees, and gradually phase out inefficient personnel.

4) Provides Greater Satisfaction and Prestige

Promotions provide an opportunity for the present employees to move into jobs that provide greater personal satisfaction and prestige.

5) Improves Morale of Employees

A sound policy of promotion will keep the morale of the employees high and will solve many personnel problems automatically such as absenteeism, discipline, accidents, etc.

6) Informs About Opportunities For Career Growth

When one person is promoted, other workers are encouraged that greater opportunity awaits them if they are qualified and motivated to assume greater opportunity.

Limitations of Promotion

Though promotion is important for the employee and the organisation, it creates certain problems which are as follows:

1) Some Employees Refuse Promotion

Employees generally tend to accept promotions. However, there are several incidents where employees refuse promotions. These incidents include promotion together with a transfer to an unwanted place, promotion to a level where the employee feels incompetent to carry out the job, delegation of unwanted responsibilities, and trade union leaders feeling that promotion damages their position in the trade union.

2) Promotion Disappoints Some Employees

Some employees who are not promoted will be disappointed when their colleagues with similar qualifications and experience are promoted either due to favouritism or due to a lack of systematic promotion policy.


What is the role of promotion in HRM?

Effective strategies for promotion in HRM  contribute towards employee engagement, satisfaction, and organizational success. These strategies help the organisation in rewarding talented employees. It develops a culture of growth and career development for employees and maintains a skilled workforce. 

What is the importance of promotion in hrm?

The importance of promotion in hrm involves several reasons such as Employee Motivation and Morale, Retention of Talent, Enhanced Productivity, Skill and Competency Development, Succession Planning, and Positive Organizational Culture.

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