Bases of Promotion

A promotion is an increase in rank which may also be accompanied by a raise in pay, benefits, and responsibility.

Most people view promotions positively, as they indicate that the individual being promoted is successful, valuable, and useful. In many workplaces, people actively work towards promotion and its accompanied benefits.

Promotion indicates that the employee has a potential for development and long employment within the company and promotion may include supervision responsibilities, as the promoted employee becomes responsible for administrative assistants and other staff.

These responsibilities should not be taken lightly, as most employees look to their supervisors for guidance and examples of appropriate workplace behaviour.

Organizations undertake different bases of promotion. It depends upon the nature, size and management of the organizations.

Some organizations (Public Sector Undertakings) decide promotions solely on the basis of seniority while others (Private Corporate) finalize promotions on the basis of merit. There are also organizations those who decide promotions on the basis of seniority-cum-merit or merit-cum-seniority.

The three important bases of promotion are:- 1. Seniority as the Basis of Promotions 2. Competence/Merit as the Basis of Promotions and 3. Seniority-Cum-Merit/Merit-Cum-Seniority.

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Bases of Promotion: Seniority, Merit and Seniority-Cum-Merit Based Promotion

Bases of Promotion – Top 3 Basis: Seniority, Competence/Merit and Seniority-Cum-Merit Basis (With Advantages and Disadvantages)

A promotion is an increase in rank which may also be accompanied by a raise in pay, benefits, and responsibility. Most people view promotions positively, as they indicate that the individual being promoted is successful, valuable, and useful. In many workplaces, people actively work towards promotion and its accompanied benefits.

The term is also sometimes used to refer to a general change in status such as a graduation, which is why employees may find themselves attending a “fifth grade promotion” instead of a fifth grade graduation. Typically, someone is rewarded with a promotion when he or she performs exemplary work, or shows aptitude for a position with more responsibility.

Promotion indicates that the employee has a potential for development and long employment within the company and promotion may include supervision responsibilities, as the promoted employee becomes responsible for administrative assistants and other staff. These responsibilities should not be taken lightly, as most employees look to their supervisors for guidance and examples of appropriate workplace behaviour.

Organizations undertake different bases of promotion. It depends upon the nature, size and management of the organizations. Some organizations (Public Sector Undertakings) decide promotions solely on the basis of seniority while others (Private Corporate) finalize promotions on the basis of merit. There are also organizations those who decide promotions on the basis of seniority-cum-merit or merit-cum-seniority.

Basis # 1. Seniority:

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:

Advantages:

a. Seniority being quantifiable provides an objective means of identifying the personnel eligible for promotion.

b. It is easy to measure the length of service and administer the rule.

c. There is less scope for subjectivity or arbitrariness in fixing seniority.

d. It gives a sense of certainty of getting promotion to every employee and their turn of promotion.

e. It is also considered that seniority and experience go hand in hand. Hence it is right to have promotions on this basis.

f. Subordinates are interested to work under a senior and experienced boss.

g. As promotion is predictable under this system, it generally reduces employee turnover.

Disadvantages:

a. Seniority always does not indicate competence.

b. The idea that employees learn more with length of service is not valid.

c. Employees learn up to a particular stage. After that grasping power diminishes.

d. This basis of promotion de-motivates the young and competent employees.

e. It kills the zeal and interest to learn and develop.

f. It does not guarantee quality staffing of promotional vacancies as merit or ability is altogether ignored.

g. Judging seniority practically is a difficult task.

h. It discourages creativity and innovation in the organization.

Basis # 2. Competence/Merit:

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.

Organizations can avoid the risks associated with Peter Principle by the following ways:

i. By having an “up or out” policy that requires termination of an employee who fails to attain promotion after a specified period of time. A manager who competently handles his /her current job responsibilities, but does not reveal the skill set necessary for promotion, he/ she may cause harm within the company, by way of preventing those beneath him/her with higher potential from moving up. This leads to degradation of morality of the subordinates working under the manager. Hence it is better for the organization to terminate the manager.

ii. By refraining from promoting a worker until he/she shows the skills, competencies and work habits those are needed to succeed at the next higher job.

This basis of promotion has the following advantages and disadvantages:

Advantages:

a. It motivates the employees to work hard, improve their knowledge, acquire new skills and become a part of increasing organizational efficiency and effectiveness.

b. Efficiency is encouraged, recognized and rewarded.

c. Competent employees are retained.

d. It motivates the competent employees to exert all their resources and contribute them to the organizational efficiency and effectiveness.

Disadvantages:

a. This creates unhappiness among the senior employees.

b. Many senior and experienced employees leave the organization.

c. This basis of promotion leads to favouritism and jealousy.

d. It is not easy to measure merit. Personal prejudices, biases and union pressures usually come in the way of promoting the best performer.

e. Loyalty and length of service are not rewarded.

Basis # 3. Seniority-Cum-Merit/Merit-Cum-Seniority:

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:

i. 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.

ii. Measurement of Seniority and Merit through a Common Factor:

a. Due weightage is given to seniority and merit (for example 30% for seniority and 70% for merit).

b. 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.

c. Merit is also measured by points with the help of assigned weightage.

d. Points assigned to a candidate under both the heads of seniority and merits are added up.

e. 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.

iii. 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.

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Bases of Promotion – With Merits and Demerits

When it has been decided to fill up a higher position through promotion, the next decision is about determining the basis for promotion. The basis for promotion may be seniority or merit, or both.

1. Seniority as the Basis for Promotion:

Seniority implies the length of service in the organisation. This is taken as the basis, as each employee will know his place in the promotion chart and the promotion will be done as a matter of routine. If seniority is taken as the base, the employee with the longest period of service will be promoted, irrespective of the fact whether he is capable to handle the higher position or not. This practice is mainly followed in the educational institutions government organisations, and unionised industrial establishments.

Merits:

(i) It is a simple and easy method of promotion of employees. This is because it is very easy to measure the length of service and to calculate the seniority of the employee.

(ii) This method creates discipline and respect for the senior personnel in the organisation.

(iii) As the promotions are acceptable to all, this method creates the peace in the organisation, as it is generally accepted by the trade unions.

(iv) This method is trusted by the employees in the organisation as there are no chances of partiality or discrimination.

(v) Right for the senior persons for promotion is recognised in this system.

(vi) The employees become aware of the future prospects of their job.

(vii) The existing manpower can be used to an optimum level by giving them training and preparing them for higher jobs.

(viii) It is the cheapest system of recruitment.

Demerits:

(i) Oldest is not always best. Therefore, the assumption that the length of the service indicates talent is not valid, as beyond a certain age a person may not learn.

(ii) This method does not recognise the ability and competence of the employees which demotivates the competent and young employees and results in more labour turnover.

(iii) As everybody is promoted without improvement, this system kills ambition and zeal to improve performance.

(iv) Though calculating the seniority sounds very easy in the theoretical sense, it is highly difficult in practice as many aspects like job seniority, company seniority, trainee, etc., have to be considered.

2. Merit as a Basis of Promotion:

Management personnel generally prefer merit as the basis for promotion as it considers the job performance and employees’ potential. When merit is taken as the base, it is ensured that competence is the fundamental determinant of progress. The promotion is made on merit and competence, which are determined on the basis of performance appraisal. Such a promotion has its own excitement, as it is achieved through hard work and dedication.

Merits:

(i) The competence, knowledge and initiative of the employees are recognised and rewarded.

(ii) It leads to the better utilisation of skills of an employee, and also to the fuller utilisation of the human resources in the organisation.

(iii) Employees feel that their performance will be rewarded. It leads to improvement in their performance.

(iv) This system continuously motivates the employees to acquire new knowledge and skills for their all-round development.

(v) Competent and efficient personnel are retained in the organisation.

(vi) It is a logical and scientific system of recruitment.

Demerits:

(i) It is not easy to measure the merit.

(ii) The subjective measures are used for determining the merit for promotion.

(iii) Merit should mean future potentiality but not the past performance. So, purpose of promotion is not fulfilled when merit is taken as the base.

(iv) Management integrity is distrusted by employees’ and trade unions in calculating the merit for promotion.

3. Seniority-Cum-Merit:

Both seniority and merit suffer from certain limitations. None of them is the complete criterion. Merit is preferred by the management personnel as they are interested in enriching the organisation, whereas trade unions prefer seniority as the basis for promotion. So, it becomes necessary to combine both the methods to frame the best policy. For instance, if two employees are equal in seniority then merit should be taken as the base for promotion for them.

On the other hand, if two employees are equal in merit then seniority should be the decisive factor for promotion. Both the management and trade unions get satisfied with this policy.

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Basis of Promotion – 2 Main Basis: Seniority and Merit Based Promotion (With Benefits)

There are two main bases of promotion:

1. Seniority, and

2. Merit.

There has been a great controversy as regards the question — whether the promotions should be based on merit or qualification or competence of the employee or on his seniority. Seniority is based on his total length of service and is counted from the date of his appointment in the organisation.

The workers and their unions prefer ‘seniority’ as the basis for promotion while die management prefers ‘merit or competence’. Before reaching on a final conclusion, we must evaluate the respective merit and demerits of these bases.

Basis # 1. Seniority:

Seniority is the oldest and most widely used basis of promotion.

It has following advantages:

(a) In business and industrial undertaking the system has been adopted with a view to patronizing the employees.

(b) Utilization of seniority in making various employment decisions brings an objective means of distinguishing among personnel.

(c) This basis of promotion creates a sense of security in employees as they can predict in advance as to when and how certain changes will be affected.

(d) Seniority as a means of employment decision creates more peace in the organisation for such decisions are always made strictly on the basis which will be acceptable to all. This will keep employees satisfied and help in avoiding the charges of bias, favouritism and nepotism.

(e) This basis of promotion is also acceptable to management because it reduces the rate of labour turnover. Employees will remain within an organisation even when they are aware of better opportunities elsewhere since there will be the loss of seniority resulting from quitting.

Disadvantages of Seniority as a Basis of Promotion:

The above mentioned plus points, usually, establish a case especially in unionized firms to give more weight to seniority in making promotion because of the great importance that workers attach to length of service. But this is not correct because there are several reasons against the use of seniority, particularly when it becomes the sole base for decision making.

It has the following main disadvantages:

(a) Seniority often ignores merit or ability. This in turn may impair ability because the employees with the longest service need not necessarily be the most competent.

(b) It overvalues experience. If workers automatically qualify for better jobs by accumulating seniority, it will bring no incentive to new employees to improve their performance.

(c) It may enhance the rate of labour turnover. It may drive the ambitious and able men, with less period of service out of the firm.

(d) A rigid seniority system places a considerable burden on the hiring process. It makes extremely difficult to attract and recruit capable new personnel unless they are placed in the exempted category.

(e) Since seniority places no premium on the merit of the employees, it fails to differentiate between efficient and inefficient employees.

Basis # 2. Merit:

The following are the benefits from the promotion by merit system:

(a) It recognizes and rewards extra knowledge, competence and initiative of the employees. Even juniors can expect promotions.

(b) It generates greater motivation in the competent employees as they do not have to depend more on seniority for their advancement.

(c) Competent employees are likely to be retained instead of being lost to the organisation.

(d) It results generally in increased productivity if promotions are based on an evaluation of the employee’s performance.

(e) It is a scientific and logical system for promotion.

Management prefers this system as it increases the efficiency and profitability of the enterprise.

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Basis of Promotion – On the Basis of Seniority, Merit and Seniority-Cum-Merit

Promotions can be made on the basis of seniority or merit or a combination of both.

1. Seniority as a Basis of Promotion:

Seniority means length of service in the same organisation. It is based on that there is a positive correlation between length of service and talent. This system is also based on tradition of respect of for older.

The advantages of seniority as the basis of promotion are as follows:

(i) System is simple to measure length of service & judge seniority of an employee.

(ii) Every employee find his place in promotion list.

(iii) There will be no scope for favouritism or dispute regarding promotion.

(iv) It will reduce labour turnover as the employee feel secured about their promotion.

(v) Seniority as the mode of employee promotion is consistent with Indian culture of respecting seniors/elders and gives satisfaction to senior employees.

This system contributes to cordial industrial relations because gets full support of trade unions.

Seniority system suffers from the following disadvantages:

(i) It is not always true that length of service indicates talent.

(ii) Demotivate talented employees those are not senior.

(iii) Efficiency of the organisation suffers in the absence of incentive for hard work and self-development.

(iv) The concern fails to attract young and hardworking employees.

2. Merit as a Basis of Promotion:

Merit implies the knowledge, skills and performance record of an employee.

The policy of Promotion on the basis of merit has the following merits:

(i) Promotion on the basis of merit motivates the employees having potential for development.

(ii) Merit as the basis of promotion ensures that efficiency of the organisation is maintained.

(iii) Merit based promotion policy attracts young and promising candidates to apply for jobs in the organisation.

Merit based promotion system suffers from the following disadvantages:

(i) There is no foolproof method of judging the ‘ability’ of an employee. The judgment may vary from person to person.

(ii) The merit based criteria ignores the value of experience.

(iii) When young employees are promoted over older employees, the old and experienced, loyal people may leave the organisation.

3. Seniority-Cum-Merit:

Both seniority and merit suffers from certain limitations. Therefore, a sound promotion policy should be based on both the considerations, i.e., seniority and merit.

A Proper combination of two criteria can be created in several ways. Firstly minimum length of service may be prescribed e.g., employees who are having minimum 5 years of service length can be eligible for promotion. Among these merit is used as the sole criteria to select the employee for promotion. Secondly relative weightage may be assigned to seniority and merit.

For instance, 40% for seniority and 60% for merit weightage may be used. Thirdly employees with a minimum performance record and qualifications are treated eligible for promotion. Seniority is used to choose from among the eligible candidates.

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