Meaning

The remaining type of internal mobility is 'demotion. It is the opposite of promotion. Demotion is the reassignment of a lower level job to an employee with delegation of responsibilities and authority required to perform that lower level job and normally with lower level pay. Organisations use demotions less frequently as it affects the employee's career prospects and morale.

Reasons for Demotions

Demotions are necessary for the following reasons

1. Unsuitability of the Employee to Higher Level Jobs: Employees are promoted based on seniority and past performance. But some of the employees promoted on these two bases may not meet the job requirements of the higher level job. In most cases, employees are promoted to the level of their incompetency. Some employees selected for higher level jobs may prove to be incompetent in doing that job. Such employees may be demoted to the lower level jobs where their skills, knowledge and aptitude suit the job requirements.

2. Adverse Business Conditions: Generally adverse business conditions force the organisation to reduce quality of production, withdrawal of some lines of products, closure of certain departments or plants. In addition, organisations resort to economy drives. Consequently, organisations minimize the number of employees. Junior employees will be retrenched and senior employees will be demoted under such conditions.

3. New technology and new methods of operation demand new and higher level skills. If the existing employees do not develop themselves to meet these new requirements, organizations demote them to the lower level jobs where they are suitable. For example, teachers handling 10th class were demoted to the level of 8th class teachers when the syllabus was revised and the teachers were found inefficient even after training in one school in Andhra Pradesh.

4. Employees are demoted on disciplinary grounds. This is one of the extreme steps and as such organisations rarely use this measure.

Though the demotion seems to be simple, it adversely effects the employee's morale, job satisfaction etc. as it reduces employee status not only in the organisation but also in the society in addition to reduction in responsibility, authority and pay. Hence, there should be systematic demotion principles.

Demotion Principles

Organisations should clearly specify the demotion policy. Otherwise, the superiors demote the employees according to their whims and fancies. A systematic demotion following items:

• Specification of circumstances under which an employee will be demoted like reduction in operations, in-disciplinary cases

• Specification of a superior 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 the normal conditions are restored

• Specification of nature of demotion, i.e., whether it is permanent or temporary if it is as a disciplinary action. It should also specify the guidelines for determining the seniority of such demoted employees.

References

P.Subba Rao, Essentials Of Human Resource Management And Industrial Relations, Himayala Publishing House, Edition 2014