Demotion for Indiscipline: What Are the Real Impacts and How Should It Be Handled?

I would like to know from experts and elders what the implications of demotion as a punishment are on a delinquent employee and what care needs to be taken by the disciplinary authority in implementing the punishment.

There are cases of demotion happening in many organizations, but these kinds of demotions occur because of wrong promotions. For example, a sales executive was promoted to a sales manager position simply because he achieved 200% of his sales target. The promotion was solely based on the targets achieved by this sales executive, ignoring the fact that a sales manager's role requires various competencies such as leadership, team mentoring, strategic planning, training, coaching, and activities in line with industry demands.

Such demotions are usually taken sportingly because the employee understands that more time is needed to work at that level.

Now, addressing your question - if a demotion is carried out as a form of punishment, one needs to investigate the cause of such demotion. If the employee has violated the terms and conditions or the code of ethics of the company policy, it is better to part ways with that individual rather than keeping them in the system.

Thank you.

Dear Meghna,

Punishment for a defaulter is nothing but one of the means to improve the behavior of an employee. "Demotion" is one such punishment.

However, before awarding such punishment, make sure that the culpability of the employee is established. What efforts has management taken to improve the performance of the employee? What efforts has his reporting manager taken to improve the performance of the employee?

You could have given a little more detail about the case, such as the designation of the employee, how long they have been working, what the under-performance issues were, etc. What counseling was done to improve their performance, and how many warning letters were given to improve their performance?

Any demotion results in a reduction in salary. If you demote the employee, make sure not to reduce their basic salary. Keep the basic salary as it is. Secondly, demote the employee by issuing a proper letter to them. If you want to see a draft of such a letter, you can click here. You need to make a few amendments to this draft.

On the flip side, the motivation level of the demoted employee may decrease. They may become the target of ridicule and possibly decide to quit the company on their own.

Regards,
DVD

If the punishment is for a workman covered under the ID Act, then ensure punishments are awarded as prescribed under Certified Standing Orders applicable to him. If there are no certified Standing Orders, then refer to Model Standing Orders applicable in your State and for your industry.

Demotion as a Punishment

If demotion is listed as one punishment, then after conducting an inquiry and after the workman is found guilty of misconduct, depending on the nature of misconduct, demotion can be awarded as a punishment. Generally, basic pay is not altered, but there is no rule that says the basic pay should not be altered in cases of demotion.

When Demotion is Used as a Punishment

1. In the case of charges of fraudulent activities,
2. Low levels of production,
3. Frequent commission of misconducts.

Regards,
Sivasankaran

The Impact of Demotion on Employees

Demotion affects an employee significantly, not just in their career but also in other aspects such as social, family, and personal emotions. This can lead a person towards depression and complete degradation. Therefore, it is crucial to consider the consequences of this action in-depth. Tearing is easy, but stitching without leaving a mark on a cloth is not. Even if you later embroider wonderful designs on it, it remains torn.

To the company, demotion may be part of internal employee recruitment or adjustment strategies. However, it does not create a positive impression in the minds of your employees, and your reputation may be at stake when employees choose to avoid your workplace.

Understanding Demotion in the Workplace

Demotion is the process of moving an employee from a higher-level position to a lower-level position, which is the opposite of promotion. It is important to note that the decision to demote is not taken lightly and is not based on what is not required or observed.

Regards