Promotion and Transfer of Employee


Promotion is vertical movement of an employee within the organization. In other words, promotion refers to the upward movement of an employee from one job to another higher one, with increase in salary, status and responsibilities. Promotion may be temporary or permanent, depending upon the needs of the organization.

There can be ‘dry promotion’ also where an employee is assigned to a higher level job without increase in pay. An example of ‘dry promotion’ is a University Professor made Head of the Department with no increase in salary.

Promotion has an in-built motivational value as it elevates the authority, power and status of an employee within an organisation. It is considered good personnel policy to fill vacancies in a higher job through promotions from within because such promotions provide an inducement and motivation to the employees and also remove feelings of stagnation-and frustration.

Types of Promotion

Promotion given to employees in an organization can be classified into three types:

  1. Horizontal promotion

When an employee is shifted in the same category, it is called ‘horizontal promotion’. A junior clerk promoted to senior clerk is such an example. It is important to note that such promotion may take place when an employee shifts within the same department, from one department to other or from one plant to another plant.

  1. Vertical Promotion

This is the kind of promotion when an employee is promoted from a lower category to lower category involving increase in salary, status, authority and responsibility. Generally, promotion means ‘vertical promotion’.

  1. Dry Promotion

When promotion is made without increase in salary, it is called ‘dry promotion’. For example, a lower level manager is promoted to senior level manager without increase in salary or pay. Such promotion is made either there is resource/fund crunch in the organization or some employees hanker more for status or authority than money.

Purpose of Promotion

The following are the purposes or objectives of promotion:

  1. To recognize an employee’s skill and knowledge and utilize it to improve the organisational effectiveness.
  2. To reward and motivate employees to higher productivity.
  3. To develop competitive spirit and inculcate the zeal in the employees to acquire skill, knowledge etc.
  4. To promote employees satisfaction and boost their morale.
  5. To build loyalty among the employees toward organization.
  6. To promote good human relations.
  7. To increase sense of belongingness.
  8. To retain skilled and talented people.
  9. To attract trained, competent and hard working people.10. To impress the other employees that opportunities are available to them too if they also perform well.


A transfer is a change in job assignment. It is the movement of an employee from one job to another without involving any substantial change in his duties, responsibilities, required skill, status and compensation. A transfer does not imply any ascending (promotion) or descending (demotion) change in status or responsibility.

According to Edwin B. Flippo, “Transfer is a change in job where the new job is substantially equal to the old in terms of pay, status and responsibilities.”

According to Dale Yoder, “A transfer involves the shifting of an employee from one job to another without special reference to changing responsibility or compensation. Transfer may involve promotion, demotion or no change in status and responsibility.”

Thus, transfer is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or position to another at the same or another place, where his salary, status and responsibility are the same.

Purposes of Transfer

Transfers are generally resorted to with a view to attain the following:

  1. To Meet the Organisational Requirements

Organisational changes may demand the shift in job assignments with a view to place the right man on the right job.

Such changes may be changes in technology, changes in the volume of production, production schedule, product line, quality of products, change in the job pattern, fluctuations in the market conditions, reallocation of or reduction in the workforce due to a shortage or a surplus in same section so that layoffs may be avoided, filling in of the vacancies which may occur because of separations or because of the need for suitable adjustments in business operations.

In short, the purpose of transfers is to stabilize employment in an organization.

  1. To Meet Employees’ Requests

Sometimes, transfer is done at the request of the employer himself. Employee may need transfer in order to satisfy their desire to work under a different superior in a department/region where opportunities for advancement are bright, in or near their native place or place of interest, doing a job where the work itself is challenging etc.

  1. To Ensure Better Utilization of the Employees

An employee may be transferred because the management feels that he is not performing satisfactorily and adequately and when the management feels that he may be more useful or suitable elsewhere, where his capacities would be better utilized.

  1. To Make the Employees More Versatile

Employees may be shifted from one job to another to expand their capabilities. Job rotation may prepare the employee for more challenging assignments in future.

  1. To Adjust the Workforce

Workforce may be transferred from a plant where there is less work to a plant where there is more work. Thus, the employees who have been in service of an organization are not thrown out of employment but adjusted elsewhere.

  1. To Provide Relief to the Employee

Transfers may be made to give relief to employees who are overburdened or doing hazardous jobs for long periods. Transfer may also be made to break the monopoly of the employee. The climate of a place may be unsatisfactory for an employee’s health. He may request a transfer to another place, where his health may not be affected by the climate.

  1. To Reduce Conflicts and Incompatibilities

Where employees find it difficult to get along with colleagues in a particular section or department, they could be shifted to another place to reduce conflicts.

  1. To Penalise the Employees

Transfers may be effected as disciplinary measures to shift employees indulging in undesirable activities to remote, far flung areas.

  1. To Maintain a Tenure System

In senior administrative services of the Government and also in industries or where there is a system of annual intake of management trainees, the employee holds a certain job for a fixed tenure but is made to move from job to job with a view to enable him to acquire variety of experience and skills and also to ensure that he does not get involved in politicising informal groups.

  1. To Accommodate Family Related Issues

Family related issues cause transfers, specially among female employees. When they get married, the female employees want to join their husbands and this fact necessitates transfers or resignations.

Types of Transfer of employee

Transfers may be classified on the basis of purpose or unit

(A) On the Basis of Purpose

  1. Production Transfers

A shortage or surplus of the workforce is common in different departments in a plant or several plants in an organization. Surplus employees in a department have to be laid off, unless they are transferred to another department. Transfers effected to avoid such inevitable layoffs are called production transfers.

  1. Replacement Transfers

A replacement transfer is the transfer of a senior employee to replace the junior employee or a new employee, when the latter is laid off or shifted to another job. Sometimes, it is a temporary arrangement to make use of the services of die senior personnel.

  1. Versatility Transfers

Versatility transfers are effected to make employees versatile and competent in more than one skill. It aims at giving training to the employees of various jobs of similar nature having different operations. It helps the employees to get themselves prepared for promotions and also helps the employer in developing the effective manpower prepared to handle the higher openings.

  1. Shift Transfers

When the unit runs in shifts, employees are transferred from one shift to another on similar jobs. In some undertakings, where shifts are operated regularly, employees may be recruited permanently for the shift, but in some cases they are rotated from one shift to another as a matter of practice, because many employees dislike second or third shift assignment as it interferes with their social or family engagements.

  1. Remedial Transfers

Remedial transfers are effected at the request of the employees and are, therefore, called personal transfers. Personal transfers take place because the initial placement of an employee may have been faulty or the worker may not get along with his supervisor or with other workers in the department.

He may be getting too old to continue his regular job or working conditions may not be well adapted to his personal health. If the job is repetitive, the employee may stagnate and would benefit by transfer to a different kind of work.

  1. Precautionary Transfers

Such transfers are made as a precautionary measure to avoid the misuse of office or misappropriation of funds by the employees. In some undertakings, there are more chances of misuse of office or misappropriation of funds than others. Generally it is mentioned in the transfer policy of the organisation that an employee cannot stay at one post for more than 3 years or so.

 (B) On the Basis of Unit

  1. Sectional Transfers

These transfers are made within the department from one section to another. The main purpose of such transfers may be to train the workers and prepare them to handle the operations of different sections of the department.

  1. Departmental Transfers

Transfers from one department to another department within the plant are called departmental transfer. Such transfers are made if the nature of work is same or substantially the same in both the departments such as clerical or routine jobs.

  1. Inter-Plant Transfers

If there are more than one plants under the control of same management, transfer may be made from one plant to another on varied reasons. Such transfers are called inter-plant transfers.

2 thoughts on “Promotion and Transfer of Employee

  1. Effectiveness of promotion and transfer scheme in the organisation project notes

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