written by | May 31, 2022

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Table of content

What is Employee Promotion? Types and Benefits Explained

Employee enthusiasm and dedication are two key factors in a successful workplace. Employee promotion can provide many other benefits for both employers and employees and satisfy these two basic needs.

Promotion is elevating an employee to the next grade or designation. It's the advancement of an employee to the next level of grade and designation.

Promotion refers to an employee being promoted to a job with higher responsibilities and more roles, and most of the time, this also leads to a higher salary. This allows him or her to fulfil the requirements of the next cadre profile.

This article helps explore various types of employee promotions, benefits, and more.

Did You Know?

If you implement a promotion strategy in your employee base, it’ll add higher responsibilities to the team. Also, it’ll bring more determination and motivation to them. It’ll result in getting more productivity as well while preventing the loss of important employees.

Also Read: What is EPS - Employee Pension Scheme?

Types of Employee Promotion

There are several types of employee promotions: Horizontal, Vertical, and Dry. You'll probably be surprised at some of them! Hopefully, you'll find one that works for you. And remember, no matter which type of promotion you choose, there's always an upside. 

This article will cover the benefits and drawbacks of each type. This article also explores how you can use the different styles of promotion to make your company more profitable.

Horizontal Promotion

While the business world has emphasised vertical movement, horizontal employee promotion is just as beneficial. It can enhance an employee's efficiency and productivity while allowing them to try different jobs.

Horizontal employee promotion is more like a transfer and does not necessarily result in a promotion or higher status. Instead, an employee may move from one department to another to build up their professional experience and gain experience in their chosen field. Horizontal movement can provide new challenges and a chance to try out new ideas.

Dry Promotion

A dry employee promotion occurs when an employee is put into a higher-level position without receiving an increase in salary or benefits. Instead, the employee gets a new title with increased responsibility and authority.

In other words, a dry employee promotion is a way for a company to test an employee's leadership skills without involving a pay increase. This type of promotion can be a valuable development tool for employees who don't have the necessary skills to move up the corporate ladder.

One common example of a dry employee promotion is promoting a college professor to Head of Department without a pay raise. While this type of promotion is generally temporary, it can also be permanent, depending on organisational needs and the employee's performance. 

Whether an employee gets a dry promotion is a personal choice and organisational culture. Dry promotions also differ from the more traditional types of promotions, such as merit-based and performance-based.

Vertical Promotion

A vertical employee promotion can benefit both the company and the employee. It allows an employee to move up to a new department or HR manager's position, thereby changing the nature of the job.

This type of promotion also allows a company to fill a position without recruiting a new team member. A vertical promotion can be an open call for all employees or a closed call in which only selected team members are invited to apply for a vacant position.

The traditional type of promotion involves upward movement and a salary increase. On the other hand, a vertical promotion involves a change in the job's designation or responsibilities but changes the employee's role and responsibilities.

This type of promotion may also change the employee's responsibilities, add more direct reports, or increase the number of decision-making responsibilities. For this reason, vertical employee promotions can be a good idea if you are looking for a way to reward your employees for their hard work and dedication.

Benefits of Employee Promotion

Now that you know what employee promotion is let’s understand its benefits. One of the main goals of hardworking employees is employee promotion

When this doesn't happen, employees will leave and find other opportunities. Employees expect to be promoted within one to two years, and employers who fail to meet this expectation will suffer the consequences.

Studies show that 40% of millennials expect to be promoted within a year, or they will seek other employment opportunities. Employee promotion often comes with a pay raise, which helps reduce attrition. Here are some of the benefits of employee promotion.

Rewards and Recognition

In addition to boosting your company's morale, rewards and recognition for employee promotion can also increase productivity and enhance teamwork. By providing monetary or non-monetary rewards, you can encourage high-performing employees to perform better and contribute to the company's success.

Ultimately, employee recognition improves company morale and can lead to a lower turnover rate. A simple way to get employees involved is to hold a virtual company-wide meeting. During the meeting, introduce the new recognition program, answer questions and let employees share their stories about how the program has impacted their lives.

This way, they will feel included and proud to learn about the rewards and recognition programs you are implementing. Moreover, a virtual meeting will allow you to engage with employees and discuss how the program has positively impacted their lives.

Also Read: Difference Between Net, Take-Home, Gross Salary & CTC

Motivation & Productivity

Employee promotions provide a variety of benefits to employees. They often get a raise, motivating them to work harder and achieve more. They may also learn new systems or attend college.

These benefits can increase an employee's personal development and improve the company as a whole. Employees who receive an employee promotion often bring fresh ideas and skills to the company. They also work up the ladder and become more valuable to the company.

In addition to increasing motivation and productivity, employee promotions increase loyalty. Promotions that offer higher pay and higher positions increase workers' loyalty. However, a lack of promotion can make some workers leave a company searching for better opportunities. Also, be sure to improve your communication skills.

Reduce Attrition

While it is very easy to eliminate positions in an organisation due to poor performance, it's important to minimise attrition rates if you want to keep your existing staff. High attrition rates result in institutional knowledge gaps, lack of continuity and burnout among existing staff. 

High attrition rates also cause lower productivity and unhappy customers. If you're considering employee promotion or reorganisation, it can help in reducing attrition.

Cost-Efficient

Promoting from within has several benefits. For one, employee promotions are much cheaper than hiring outside candidates. Recruiting one person can easily cost half of his or her annual salary. Not only that, but the new hire must be trained and given basic training. 

It can also take months to train them. Furthermore, internal promotions help to retain employees. Employees who are allowed to progress in their careers are likely to be motivated and loyal, thereby saving the cost of new hiring.

Career Growth

Career growth benefits of employee promotion come in many forms. A pay increase usually accompanies a promotion, but it's often more than that. The benefits of being noticed extend far beyond the pay.

Employee engagement is often increased after receiving a promotion. Promotions also help employees gain a greater sense of ownership and responsibility. Employees can also become more successful in their careers when they're given a chance to lead. Monetary promotion is not available to every employee; it can have long-term career benefits.

Who to Promote in Your Next Employee Promotion Phase?

When determining who to promote, keep in mind that there are many different reasons. In addition to fostering growth, promotions help your employees recognise their hard work and value it.

Employees will be more likely to remain with a company that rewards hard work and encourages them to pursue their career goals. As an employer, you should not overlook the importance of employee promotions for retention.

This practice can boost employee productivity and engagement and help you attract younger talent. When deciding on who to promote, you need to consider the person's motivations for receiving the promotion.

There are many reasons why a person may be rejected, from lack of critical training to leadership skills. However, you must find a person who is truly deserving of the promotion. In addition, it is important to communicate the decision to the rest of the team without reserving your feelings.

Remember, the decision should be both celebratory and justified. Finally, the newly promoted employee should be provided with the necessary tools to succeed in the new role, including a clear blueprint for their success.

Conclusion

It is important to note that not all promotions are for management roles. When determining who to promote, consider their interpersonal skills. If they show initiative, they are likely to be a good candidate for a promotion.

If an employee can help their colleagues and solve problems, they are great candidates. However, it is equally important that the employee has a clear understanding of their role in the organisation. Also, be sure to bring new and better ideas for getting a promotion if you're an employee. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: How can you promote employees?

Ans:

  1. Know your promotion technique.
  2. Evaluate your current employee base.
  3. Establish the need for promotion.
  4. Re interview your existing employees.
  5. Announce the promotion opportunity.
  6. Make and announce your decision.

Q: What are the types of a job promotions?

Ans:

There are a total of three different sorts of promotion for employees:

  • Vertical promotion
  • Horizontal promotion
  • Dry promotion

Q: What is career promotion?

Ans:

A career promotion means getting promoted to a higher rank or position within your company. You can achieve it by performing better at work.

Q: What is the job promotion meaning?

Ans:

Promotion is given when an employee brings better results in work and gives him/her a better position and offers the highest salary.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.