What is a promotion at work?

Employee promotions involve advancing current employees to new positions, often more senior positions, instead of interviewing and hiring new employees. People who are promoted typically receive additional benefits, such as more decision-making power, a higher salary, new responsibilities and leadership opportunities. Promotions are commonly viewed as rewards for performing well and contributing to the organization.

Employee promotion benefits

Trying to decide if an employee promotion is right for your open role? Exploring the benefits and reasons for promotions can help you decide:

• Employee recognition: Choosing an internal candidate over an external job seeker shows your existing team that you recognize and value their talents. Employee recognition can boost morale and improve the working environment.

• Employee retention: Knowing that your company offers internal advancement opportunities might improve retention.

• Shorter onboarding period: Your current team members already know the company’s goals and processes, so they don’t need as much training. It might also be possible to move them into their new roles faster since they don’t have to give notice to a different company.

• Internal nurturing: By nurturing your next leaders among your current team, you can shape their habits, skills and processes to better align with the organization. This can help them better understand your needs when a more senior role becomes available.

• Team member motivation: The opportunity for a promotion can motivate your employees to improve their efforts. You might see better work results or notice your employees expanding their skills to qualify for higher positions.

• Cost-effectiveness: Internal recruiting is generally more affordable than external recruiting. You don’t have to worry about covering relocation and other new hire expenses, which can make it cost-effective.

How to decide on employee promotions

You hire each employee for their talents and potential, which ideally results in exceptional performance from everyone. Yet not all employees make suitable candidates for your open roles. The following steps can help you evaluate your options and select a current team member who meets your qualifications:

1. Identify the qualifications: Sift through the job description to highlight the essential skills, education and other qualifications for the promotion. Keep the requirements and preferred traits in mind while assessing internal applicants.

2. Post an internal job: Even if you have prospects in mind, posting an internal job could help identify more potential employees who could be promoted. Some team members may have qualifications that you’re unaware of, so giving them the chance to recognize their readiness for the role helps you expand your candidate pool.

3. Talk to your management team: Direct supervisors often have a better idea of their team members’ abilities. They see their processes and outcomes, which can help them recognize a match for an upcoming open role. Managers and supervisors can also offer their perspectives on current employees who respond to the job opening.

4. Encourage qualified employees to apply: If you have an employee in mind for a promotion, discuss the opportunity with them to gauge their interest.

5. Evaluate qualifications: Whether you hand-pick the candidates or they respond to your internal job posting , all internal applicants should undergo the same evaluation process. Verify their credentials and ensure they meet the minimum qualifications.

6. Conduct promotion interviews: Offering promotion interviews to internal candidates who meet your requirements allows you to assess their qualifications thoroughly and determine their ability to fill the vacancy. If you have multiple internal candidates, conducting interviews helps you compare them equally.

7. Create a plan: Moving a current employee into a new role leaves another vacancy within your organization. Make a plan to help them wrap up their current duties and transition into the new position. Include timelines, training requirements and clear steps to help facilitate a smooth transition.

Best practices for employee promotions

Handling promotions professionally ensures you place strong talent in key positions while keeping the rest of the workforce satisfied.The following best practices for employee promotions can help streamline your processes with less trial and error.

1. Create a promotion policy

Formal promotion policies create consistent guidelines for all hiring managers and the HR department. It helps establish eligibility requirements, which might include:

• Performance standards

• Length of time in the current position

• Seniority

• Skills and education

Consider including a detailed process for promoting employees, including the required evaluations and interviews.

2. Consider multiple factors

Some companies focus exclusively on seniority for promotions, which could eliminate candidates who meet the qualifications but haven’t been with the company long. Consider a well-rounded approach to choosing candidates for promotions to ensure they will be successful in their new role.

3. Gather a wide range of evaluation tools

While internal candidates offer several benefits, it’s also important that they meet the job requirements. Evaluating candidates with multiple tools before a promotion ensures they’re ready to move up the ladder. Consider the following sources of information:

• Resume

• Recent employee evaluations

• Annual performance reviews

• Supervisor feedback

• Recent work or project outcomes

4. Offer programs to develop employees

Focusing on the growth and development of all employees benefits your organization. You establish an internal talent pool when you create a new position or fill a vacancy left by a departing employee. Growth opportunities empower employees to work toward advancement opportunities and help them feel more in control. Consider the following methods for developing your workforce:

• Employee development plans: You can prepare team members for new opportunities with employee development plans. These collaborative plans help identify the goals your employees have and direct them toward gaining the experience necessary to achieve them.

• Mentorships: Mentor relationships between employees help advance skills and prepare the mentee for more senior roles.

• Cross-training: By cross-training your staff, you expand their skills and help build connections between departments, which could lead to promotions.

• Training: Company-wide or department-wide training sessions deliver new knowledge and skills that could be applied in a promotion. This learning method gives all team members access to training.

• Tuition reimbursement: For employees with more specific career goals, tuition reimbursement covers college expenses for obtaining a new degree, certificate or training. This option can assist an employee who wants to make a career change within your organization by helping them gain the necessary credentials.

5. Provide transparent feedback

Transparency about job openings and promotion processes can reduce frustration among employees. Let them know if you’re considering external applicants as well. Discuss your selection processes so internal applicants know what to expect. Being transparent also holds you accountable for being objective and consistent throughout the promotion process.

6. Maintain accurate personnel records

By keeping detailed and accurate personnel records, you can potentially support your employees’ career growth and professional development within the company. By tracking performance evaluations, you can build a detailed history of an employee’s achievements, strengths and potential areas for improvement. You can also document any training or certifications employees have completed to identify suitable opportunities for them to use their skills and assist with their growth.

Comprehensive records can help you support employees in becoming eligible for promotions while also recognizing their accomplishments and professional growth.

FAQs about employee promotions

What types of promotions are there?

There are two main types of employee promotions: vertical and horizontal. Vertical is the type of promotion where the employee moves up to a position with a higher rank and greater responsibilities. Meanwhile, horizontal promotions move the employee into a new role that’s at the same career level. In this case, the workload and degree of responsibilities don’t increase, but the team member works in a new position.

What’s the difference between an open and closed promotion?

An open promotion means all employees within the organization have the opportunity to apply for the position. In a closed promotion, only certain team members have the opportunity to try for the position. Closed promotions are typically used for highly specialized positions that require specific skills.