Employment Topics Law – Promotion and Demotion

 

Businesses are dynamic and as part of their evolution will go through a variety of changes which may necessitate changes in status and position for some employees. In general these changes will be positive and involve promotion, sometimes they may not.

 

This page is designed to give business a simple overview on how to promotions and demotions need to be conducted.

 

If you need immediate assistance regarding the promotion or demotion of one of your employees and would like to speak to people who can actually help you now call 01543 308642 or email us at info@creamhr.com

 

There are some myths around the promotion of employees at work and it is probably sensible to dispel them.

 

Unless you work in an environment which is governed by collective rules that have probably been negotiated with a union, you are under NO obligation to advertise positions internally, nor do you have to consider lots of other employees when selecting someone for a promotion.

 

Having said this it is important that do not discriminate either intentionally or otherwise against specific workers regarding promotion. For example if you appear to only be promoting male, heterosexual, Christian employees, you should ask yourself why. If your reasons are reasonable and justifiable then you have little to fear, it is important to consider such factors.

 

Promoting employees is exciting and fun, however and before you do you should consider your expectations of that person in their new role and what you are going to do if they don’t work out.

 

One tactic that is probably worth considering is to tell your employee that you are considering promoting them and then set out what the promotion may involve and your expectations will be of them in that role. You could set some clear and measurable short term objectives to assess their ability against the new role, this way you can tangibly measure their progress and potential suitability for the new role.

 

You could also consider giving them a probationary period to work in this new role and confirm it in writing. The role and promotion not being confirmed until you are happy that they have successfully completed the probationary period. This allows you both some flexibility should they not succeed and it allows both parties to have an easy exit, which will ensure that you should sill retain a valuable employee.

 

You will normally face a request regarding salary or pay in the new role. We would suggest that you don’t make any changes until the probationary period has been completed. If successful you can introduce the new pay rate then or you can back date a pay rise to the start of the probationary period.

 

If someone has worked hard yet failed to achieve the level that you agreed you could still choose to reward their extra effort during probation.

 

If you do change someone’s pay immediately upon promotion and the promotion doesn’t work out, it is much harder to ask someone to go back to their old salary – not impossible, but not easy!

 

Promotion is also a useful time to look at things such as restrictive covenants that you might want to increase or introduce – these are restrictions on someone’s post employment activities if they leave your employment. More senior people hold more confidential information about your business, which you do not want your competitors to have. Promotion is a good time to address these restrictions. However do ensure that before the promotion is accepted by the employee that they understand it (the promotion) will come with more onerous post termination restrictions and ensure that they sign any restrictions you may be adding to their terms and conditions.

 

You should seek specific expert advice and guidance regarding Restrictive Covenants – call us for more information and help.

 

Demotion is a different matter altogether and can be far more problematic. In many ways the level of difficulty will depend on whether the demotion is accompanied by a reduction in salary and/or changes in other contractual conditions.

 

In normal circumstances it is not advised that employers should not unilaterally change an employee’s terms and conditions of employment, if you your employee’s will probably be able to take action against you.   (We know that this is a vague statement as each specific situation will be substantially different.)

To prepare for such eventualities you should try and ensure that there is a clause within your employee’s contract of employment when starting their employment with you to say that they could be demoted in certain circumstances say following a disciplinary or capability procedure.

 

Any potential demotion should involve consultation with the employee potentially affected. If your employee is in agreement with your suggestion then it is sensible for them to have a period to consider the decision before implementing that actual change. Normally we would advise a period of 4 weeks.

 

During this time you should listen to any concerns or worries that your employee may have about the proposal and discuss and hopefully reach amicable solutions between you.

 

In many cases that we come across demotion is being considered as a result of someone finding that they are unable to cope with the pressure of a new job or that someone has exceeded their capabilities and their performance is suffering as a result.

 

How well you handle these situations will massively influence your business success.

 

If people are really stressed about their work, but otherwise love the company and genuinely care about what they do, they may view a possible return to their old role or another less stressful role with relief – you are offering them a lifeline, which they hadn’t considered.

 

If they react differently and resist the suggestion that their performance is not up to standard then you face a different challenge.

 

If you feel that they have reached or exceeded their capability in the role, then you may consider introducing a capability procedure. Capability procedures are designed to help someone achieve an acceptable level of performance in their role and often focus on core aspects of the role. You would normally set reasonable and achievable goals and targets, in agreement with your employee and measure their performance against these targets over agreed time periods.

 

You need to ensure that they have the tools and the opportunity to succeed against the targets and be supportive and helpful to them.

 

If your employee fails to achieve the targets set there are potential consequences. These should be clearly explained at the beginning of the process and these can include termination of employment or possibly demotion to a lesser role.

 

Capability processes do need to be well managed and we suggest that you call us for specific expert help.  They are similar in process and meeting types to a disciplinary process and generally take more time to allow an employee to be given chance to address their shortfall within their role.

 

Promotions and demotions are part of the joy and pain of managing people, they need to be handled sensitively and well  – if you have any questions regarding these subjects, call us now on 01543 308642 or email us at info@creamhr.com and we’ll help to answer your specific question.

 

DISCLAIMER – should you decide to use any of the information provided on this site without our expert guidance, you do so at your own risk.  

Almost every employment/employee related situation is unique and as such it is always wise to seek specific expert advice before undertaking any action.