DOI: 10.4018/978-1-5225-6264-1.ch007
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This chapter will help you to understand how to carry out performance appraisal, understand the content of promotion, understand the standard of promotion and performance, and understand the relationship between promotion and performance appraisal.
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Promotion refers to the movement of an employee to a job involving more responsibilities, position, wage, and perquisites. However, promotion may involve an increase in salary or no increase in salary (Deb, 2006). Companies use promotion as a tool to award the recognition to and offer reward in the merit and sincerity of their employees. Compared to external hiring, internal promotion is more likely to increase the loyalty and morale of employees through filling job vacancies. Nevertheless, when an employer uses promotion as an effective tool to meet its employment needs, it has to understand that “promotion” is a double-edged sword. The reason is that when promotion is imprudent or unfair, it causes exactly the opposite effect on employees (Durai, 2010).

Why is promotion so important? Deb (2006) considers that promotion has several objectives, as follows:

  • 1.

    To make best utilization of potentialities and competencies of employees.

  • 2.

    To reward the employees’ competencies.

  • 3.

    To make internal recruitment of competent personnel at minimum cost.

  • 4.

    To encourage and search for commitment of employees to the goals and objectives of the organization on long-term basis.

  • 5.

    To decrease the cost of training.

  • 6.

    To establish harmonious industrial relations.

  • 7.

    To attract and retain talented employees.

  • 8.

    To provide appropriate and sufficient discipline in the company or organization.

  • 9.

    To implement human resource planning effectively.

There are three main styles of promotion: horizontal or lateral promotion, vertical or upward promotion, and dry promotion (Deb, 2006). The definitions of the three types of promotion are presented in Table 1.

Table 1.
The types of promotion and their definitions
Types of promotionDefinitions
Horizontal or lateral promotionIn this type of promotion, the responsibilities, salary, as well as facilitates increase with the change in the designation. But, the nature of job does not change.
Vertical or upward promotionIn this type of promotion, the status, responsibilities, job classification, salary and facilities are changed.
Dry promotionIn this type of promotion, the responsibilities and status increase, but salary and facilities remain the same.

Source: Deb (2006)

Although promotion is able to be used to motivate employees, there are several principles that should be paid attention to. The main principles are shown in Table 2.

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