Shamanth
Training & Development, Performance Mgt
Narinder.rathore
Hrm, Admin, Ir
Tpankhuri
Human Resource
Rbiyer
Consultant
Rajat Joshi
Hr Consulting ,trainer -creative Thinking
Anuradha Reghuraman
Hr & Training & Developement
Sln1960
Management Consultant
+3 Others

Good Evening,

I work for 100 plus employee company. We just completed our performance appraisal process and working on promotion criteria. I have received huge promotion recommendation from all departmental heads (HOD) and even after doing normalization rating (attendance, time factor, salary level), rate of promotion is very high (40%). Is this is normal?

I somehow feel that if we give so many promotions every year, the value of promotion goes down and rate of people at top level goes up. Since we are a small organization, there can only be title change after promotion and their role will remain the same.

I do understand that we need to recognize & reward people for thier valuable & outstanding contribuitions but is this is the only way to recognize them? Why do managers feel that if they do not promote a person s/he will quit job and organization will suffer?

I just want to understand from all my seniors as to is there any promotion percentages followed in industry to provide a healthy and respectable recognition and what are the other criteria’s that need to be considered for promoting a person (other than factors mentioned above).

Your inputs will make great difference…

Regards,

Laks.
19th May 2009 From India, Bangalore
Hi

There is no fixed percentage which is followed for promotion it totally depends upon company’s budget, future expansion plans……

Performance cannot be only criteria for promoting an employee we need to judge a person on various parameters which can be Performance + Leadership quality + communication skills + team management + functional knowledge + execution & Implementation + collaboration and many other…

You can definitely chalk out a plan for rewarding and recognizing a person by simply giving performance bonus or giving an employee training where he needs to improve himself.
Regards
Pankhuri
19th May 2009 From India, Mumbai
Hi Laks,

Whether the promotion rate of 40 % is high or not – is not an issue here. Here one needs to assess the past promotion data for the last four to five years before commenting on the same.

Once you analyze the same wrt department and personnel wise – it may give an interesting trend and perhaps if you share the same with the Functional Heads and Top Management – this may help you rationalize this year’s promotion list.

Agree with your dilemma that being a small organization –promotion just entails the change in title without little change in work profile. Even I face the same challenge in my organization as well -here one can explore if those promoted can take additional responsibilities to challenge their Managerial competency. Reallocate the work responsibities like the plant accountant oversee the stores department or Customer Service personnel gets involved with the Consumer Market Research initiatives etc.

Your seniors may have the apprehension that considering the current scenario – there may not substantial jump in the compensation hence the promotion may suffice the expectations of the employees.

The other approaches to rewards and recognition of the outstanding performance are :-

Cash awards or gifts.

Announcement by the Top Management on e-mail or in house magazine.

Personal touch like the one to one meeting or a letter of appreciation by the Top Management especially CEO/MD gives one a tremendous boost to ego. I know one company where HQs is in US and the MD gives a call at Mumbai office atleast 30-40 a week to those who are doing a great job !.

Hence take the business approach to these initiatives which would help you to streamline the same.

Incase if you need further assistance, please feel free to ask.

Regards,

Rajat Joshi
19th May 2009 From India, Pune
Dear Pankhuri & Rajat,

I thank you for your valuable input.

Pankuri, as of now we do not see any expansion plan and it so happens that functional heads give importance only to the technical knowledge and job performance of an employee and all other parameters are forgotten. I have also observed that batch of people working on same role or bunch of people joined together are been recommended to promote even if a person does not meet all criteria. If I raise this as a quesion the answer will be all are doing good and you can see their ratings.

Rajat, we had 20 to 30% promotions in 05 & 06 and in 07 & 08 its grown to 40%.

We do have different recognition schemes (spot award, monthly, annual, service based, email appreciation etc) and still people feel that promotion is the only way to make the person feel proud and retain.

Your inputs will definetly help me in further talking to the Functional Heads, however I would still like to ask you, do you think the ratio at which promotion is growing is normal or it has to be given a serious thought for a small organization like ours.

Laks.
20th May 2009 From India, Bangalore
It seems that there is no proper mechanism or compensation management being exist in India. SOme states 40% some say its 10 to 20 %.
We in the west follow performance appriasal then annual merit increase with distribution of % depending on perforamance ratings in particular grade levels.
While giving promotion we offer salary adjustment in the next salary scale with 4% increase if that 4% is below the minimum of salary range then he is fixed to the start of next salary scale.
This is some thing scientific approach with well defined compensation policy and salary scales with grades for vaious positions.
Regrds
Partho
20th May 2009 From Saudi Arabia
Laks.

As far as I understand the whole scenario your company doesn’t follow any proper procedures and policies to promote people.

Laks you need to put few plans like forming assessment panels which will run on specific guidelines drafted by company on which they will scale people and their performances which will lead to streamed and structured approach of promotions.

There are various tools available in market like psychometric test, behavioral analysis etc on which a person is judged
21st May 2009 From India, Mumbai
Hi,
In one of the company I worked, following criterias where used for promotion
1. Minimum years of experience in the company.(eg-: 3 years in company to get promoted as Managers)
2. Performance rating(through balance score card and HR had involvement in analysing and training the employees for the same)
3. Recommendations by the superior on capability fit to JD for the next post.
The management developed a policy on these parameters. Another strategy adopted was that if one employees who had shown exemplary performance did not get promotion, then they where paid a bonus(increments in these cases where lower). While giving the letter they where congratulated by saying that you are one of the few number(specifying the number) to receive a bonus this year. So may be you should put this concern in front of management and develop policies before final decision.
Hope this helped.:icon1:
21st May 2009 From India, Bangalore
Hi

promoting 40% to the next level is apparently very high in a 100 people company. It does mean nearly half of the people are moving to next level, requiring same number of people to join the organization to replace them in the current positions. Do you have a scope for that?

There are few points to ponder

- look at your current organogram and hierarhical levels. The distinguishing factors between various roles/levels need to be identified.
- the movement of people to next level requires assuming new/more responsibilities. check the potential level of candidates who are asked to be promoted.
- check the levels at which the candidates are to be promoted - from which level to which level? if you are finding no rationale except ratings - the normalization needs to be re-done.
- you would want to decide a prescribed number of years in a particualr role before moving onto the next level (separate for fast track performers)
- check the finanical ouflow by virtue of this promotion and therefore having people to be recruited. Is there a buy-in from management?

Its a tricky situation, but still i feel the promotability factors are to be re-looked as the proportion seemingly high for a small organization
21st May 2009 From India, Madras
Hi,

Our Criteria for promotion is as under:
1)Performance of Employee
2)Potential of employee to grow in the organization hierarchy


Other than Performance & Potential criteria, competencies like Interpersonal Skills, Man management skills, crisis management, behaviour under different situation etc should also be considered during promotion. One of the best ways to gain expertise in these areas is to learn these skills on-the-job. Therefore, work experience should also be linked to criteria for the promotion.


21st May 2009 From India, Mumbai
Laks,
You are truely said, the performance of the employees to be rewarded. Other than promotion or increment or hike in the salary, u can devise a programme of identifying 1 best employee from each department on the performance for every month. The reward may be in terms of money or anything else, definately the employees are satisfeid and get motivated from this. I do worked on this for designing this programme for my company. If you need, i can help you to outline the same. If u r interested, let me know, i will help you. And it depends on your industry also.
Anyway, Extra performance of an employee has to be identified and to be rewarded in time.
Best wishes,
21st May 2009 From India, Bangalore
Dear Pankhuri, you are right, I need to frame a policy with all parameters mentioned to streamline the entire process. The promotion paramters were only in practice in our organization and there was no written policy. It was a great help extended by you in clarifying all my questions. Thank you.

Dear Anuradha, we have considered first two parameters mentioned by you but I am not sure how far the 3rd parameter (JD fitment) was judged by managers before recommonding even though we specify on that. Your view on giving an appreciation letter with a bonus is a good idea. Thank you for your suggestions.

Dear Iyer, I too feel that percentage is too high for a small organization like ours where we do not even have an expansion plan. Couple of points mentioned by you were not given a thought at all and I missed that. As you said, I need to re do an analysis after considering all factors. Thank you very much for your valuable inputs.

Dear Rajesh, thank you.

Dear Shamant, Its nice to know that you work on designing rewards & recognition programs. In case I need any help, I will contact you. Thank you.

Thank you everyone,

Laks.
21st May 2009 From India, Bangalore
Hello ! No there is no rule for promotion in the private organisations. You can promot each and every person or none.
21st May 2009 From India, Surat
Hi Laks,

20 % , 30%, & 40 % in the last three years and proposed 40 % for the current year.

Number of people : 100 plus

Would request you to further analyse the same in terms of the profiles of the staff who got promoted. Like Management Trainee – Sales got promoted as Executive/Officer – Sales etc.

Also analyse the organization structure in terms of the hierarchy if it is pyramidal structure or middle structure is more than the lower structure. This may provide the food for the thought for you and the Management.

Secondly, analyze the business of the company in terms of growth – turnover and profitability over the last three years and link it to the performances to the staff who have been promoted. Check if there is a correlation between the two.

Lastly, take a dipstick survey ( secret one) of the employees as how they perceive the company’s policy of giving the high % of promotions in the last three years and check if the perceived value of the promotions – in terms of motivation.

Hence the question which you had asked us whether it is appropriate would answered by the above analysis.

Please note that the % figures alone can often be misleading unless one reviews the whole situation in tune with ground reality.

Trust this would help you!.

Regards,

Rajat Joshi
21st May 2009 From India, Pune
there is no fixed percentage for promotions. Each year, an organisation chart needs to be prepared with designations, which is the optimum level of organization and levels required for achieved the year's targets. This way, the levels and designations are fixed . Only vacant positions in the chart needs to be filled. At each sucessive level, the number of positions vacant is known. Then a search for who internally can fill those vacant positions must be made. Several technical and psychometric tests needs to be conducted, besides recommendations from the deprtmental heads. Promotion is not used an incentive for performance, but for filling the vacant positions at each successive levels if suitable and sufficient internal candidates are available. This is how promotions are decided in professionaly managed organizations.

Incentive programs for best performers would include recognition in front of their peers. This can be monetary or non monetary. Promtions are for candidates of exception merit who is qualified to fill the immediately upward position which becomes vacant in the organization chart.
12th August 2015 From India, Indore
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