Internal Mobility and Job Changes: Promotions, Demotion

The lateral or vertical movement (promotions, transfer demotion or separation) of an employee within an organization is called internal mobility. It may take place between jobs in various departments or divisions. Some employees may leave the organization for reason such as better prospects, retirement terminations, etc. Such movements are known as external mobility.

Purposes of Internal Mobility and Job Changes

  1. Improper organizational effectiveness: Organizations want to become lean and clean. To this end, structural defects may have to be eliminated; unwanted positions removed and other jobs redesigned. Internal mobility increases every such change within an organization.
  2. Improve employees effectiveness: Knowledge, skills and abilities (KSAs) can be put to use if there is a good equation between what the person has and what the organizations demands. Through promotions and transfers organizations try to bridge such gaps.
  3. Adjust to changing business operations: During a boom, there might be a phenomenal demand for new skills. Finance professionals were in great demand for example during the early 90s. In a recession, layoffs may be needed to cut down and survive. Likewise short term adjustments may have to be carried out in case of death or illness of employees.
  4. Ensure discipline: Demotion, causes loss of status and earning capacity. A demoted employees has to learn new ways of getting things done and adjust to a new setting. Demotions can be used to ensure discipline and to correct wrong placements and job assignments.


According to Pigours and Myers, ‘Promotion is 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”.

Arun Monappa and Mirza S Saiyadain defined promotion as “the upward reassignment of an individual in an organization’s hierarchy, accompanied by increased responsibilities, enhanced status and usually with increased income though not always so”.

Conditions of promotions are-

  • Reassignment of higher level job to an employee than what he is presently performing
  • The employee will naturally be delegated with greater responsibility and authority than what he has had earlier. Promotion normally accompanied higher pay. It means in some cases, the employee perform higher level job and receive the salary related to the lower level job.
  • Promotion may be temporary or permanent depending upon the organizational needs and employee performance.

Types of Promotion

  1. Vertical Promotion
  2. Up gradation
  3. Dry Promotion

Purposes of Promotion-

  • To utilize the employee’s skill knowledge at the appropriate level in the organizational hierarchy
  • To develop competitive spirit and inculcate the zeal in the employees to acquire the skill, knowledge etc. required by higher level jobs.
  • To develop competent internal source of employees ready to take up jobs at higher levels in the changing environment.
  • To promote employees’ self development and make them await their turn of promotions. It reduces labour turnover.
  • To promote a feeling of contentment with the existing conditions of the company and a sense of belongingness.
  • To promote interest in training, development programmes and in team development areas.
  • To build loyalty and to boost morale.
  • To reward committed and loyal employees
  • To get rid of the problems created by the leaders of workers’ unions by promoting them to the officers’ levels where they are less effective in creating problems.
  • Promotion places the employees in a position where an employee’s skills and knowledge can be better utilized.
  • It creates and increases the interest of other employees in the company as they believe that they will also get their turn.
  • It creates among employees a feeling of content with the existing conditions of work and employment.
  • It increases interest in acquiring h9gher qualifications, in training and in self development with a view to meet the requirements of promotion.
  • It improves morale and job satisfaction
  • Ultimately it improves organizational health.
  • Benefits of Promotion
  • Promotion Principles:
  • It should be consistent in the sense that policy should be applied uniformly to all employees irrespective of the background of the persons,
  • It should be fair and impartial.
  • Systematic line of promotion channel should be incorporated,
  • It should provide equal opportunities for promotion in all categories of jobs, departments and regions of an organization,
  • It should ensure open policy in the sense that every eligible employee should be considered for promotion rather than a closed system,
  • It should contain clear cut norms and criteria for judging merit, length of service, potentiality etc.
  • Appropriate authority should be entrusted with the task of making a final decision, it should contain promotional counseling, encouragement, guidance and follow-up regarding promotional opportunities, job requirements and acquiring the required skills, knowledge etc.



  • Unsuitability of the employee to higher level jobs
  • Adverse business conditions
  • New technology and new methods of operation
  • On disciplinary actions

Demotion Principles:

  • Specification of circumstances under which an employee will be demoted like reductions in operation, indisciplinary cases.
  • Specification of supervisor who is authorized and responsible to initiate a demotion.
  • Jobs from and to which demotions will be made and specifications of lines or ladders of demotion.
  • Specification of basis for demotion like length of service, merit or both.
  • It should provide for an open policy rather than a closed policy
  • It should contain clear cut norms for judging merit and length of service
  • Specification of provisions regarding placing the demoted employees in their original places if normal conditions are restored.
  • Specification of nature of demotion, i.e., whether it is permanent or temporary of it is as disciplinary action. It should also specify the guidelines for determining the seniority of such demoted employees.

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