Promotion is shifting of a person from a lower to higher level with greater responsibilities, better status and increased rate of pay or salary. Some companies recruits the higher level people through direct recruitment but it is better to promote a existing employee to higher level. This type is treated as a better strategy as compared to direct recruitment. It motivates the existing employees for hard work. Every firm should have a written systematic policy and it must be clear to all the employees.
Types of Promotions:
Horizontal promotion – The job nature shall remain the same but there will be an increase in responsibilities and salary with the change in designation. Promotion from Junior Accountant to Senior Accountant is an example of such type of promotion.
Vertical promotion – There will a change in job nature, status, job responsibilities and salary. A promotion from Supervisor to manager is an example of vertical promotion.
Dry promotion – There is an increase in status and responsibilities but there is no increase in salary. A professor is made Head of the Department, is an example of such type.
Benefits of promotion:
- It motivates the employee to work hard. It also provides satisfaction to the existing employees.
- The expenditure for the training of promoted employee will be less.
- The promoted employee can perform the new job efficiently as he is aware of the company internal set up.