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Promotion refers to upward movement of an employee from current job to another that is higher in pay, responsibility and\or organizational level. Promotion brings enhanced status, better pay, increased responsibility and better working conditions to the promotee.

But ,
They can be moved to higher level even without increase in pay. Such type of promotion is known as dry promotion This promotion is slightly different from upgradation which means elevating the place of the job in the organizational hierarchy. It implies horizontal movement of an employee but no increase in pay, authority or status. Such promotions does act as motivating factor.

Purpose And Advantages

Powerful motivational values. Inspire employees to utilise their skills to fullest. Inspire employees to compete and get ahead of others. Encourages loyalty and commitment. Improve readiness to accept challenging roles. Development of interest in training and development.

Bases Of Promotion
Merit based promotion. Seniority based.

Advantages of Merit Based promotion 1. It motivates employees to work hard, improve their knowledge, acquire new skills and contribute to organizational efficiency. 2. It helps the employer to focus attention on talented people, recognize and reward their meritorious contributions in appropriate way. 3. It also inspires other people to improve their standards of performance through active participation in all related activities.

Disadvantages of merit based promotion 1. It is not easy to measure merit. Personal prejudices, biases and union pressure may come in the way of promoting the best performer. 2. When young employees go ahead of other senior employees in an organization , frustration and discontentment may spread among the ranks. 3. Past performance may not guarantee future success of an employee. Good performance in job is no guarantee of good performance in another.

Advantages of seniority based promotion 1. Welcome by union. 2. Easy to judge. 3. No scope for favouritism, discrimination and subjective judgement. 4. Everyone is sure of getting the same one day.

Disadvantages of seniority based promotion 1. The assumption that the employees learn more with length of service is not valid employees may learn upto a certain age. 2. It demotivates the young and more competent employees and results in greater employee turnover. 3. It kills the zeal and interest to develop, as everybody will be promoted without showing any all round growth. 4. Sometimes judgement of seniority becomes difficult. Like: Zonal regional seniority.

Promotion Policy
Any firm should institute a promotion policy that give due weightage to seniority and merit. A sound promotion policy should be based on following criteria: 1. Consistency 2. Fair and impartial 3. Planned activity

Elements of promotion policy

Promotion policy statement : It should specify whether a particular position will be filled by internal promotion or it will be filled by open competition. Promotion routes : The organisation must define the channels for promotion of different categories of employees. promotion procedure : Policy should spell out the procedure to be followed and personnel to be affected by promotion decision.

Basis of promotion promotion on merit basis. promotion on seniority basis. If its on seniority basis determination of seniority should be properly done. There are three major tasks in the design and establishment of a seniority system. 1. Accumulation of seniority. 2. Special groups. 3. Seniority unit.