Promotion of Employee - ( Case Laws on employee promotions) Bases for Promotion - Purpose and Procedure for promotions
In simpler terms, promotion refers to upward movement in present job leading to greater responsibilities, higher status and better salary. Promotion may be temporary or permanent depending upon the organizational requirement. According to Clothier and Spriegel,
“promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.”
In the corporate sector employee promotions doesn't make much difference as that of in government sector.
In the government the word promotion is an ultimate desire for an employee for the service rendered by him in the organisation and this is the only way for an employee career development in the government sector. Promotion is the ultimate motivating factor for any employee because moves employee forward in hierarchy of concern organisation added with additional responsibility, higher respect, honour, with increase in grade pay and allowances.
In countries like India, employee promotions are withhold by employers if any enquiry is pending on concerned employee due to his disobedience of duties or misuse of his powers especially in government departments. Until clearance of enquiry pending before COMPETENT AUTHORITY on concerned employee promotion will not be given. It is the responsibility of employee on whom enquiries pending should prove his innocence before concerned competent authority.
Any employers should not show any discrimination between men and women with regard to promotion according to section 5 of Equal Remuneration Act, 1976.
Supreme Court - case laws
State of Mysore Vs P. Narasingh Rao, AIR 168 Sc 349
Markandeya Vs State of Andhra Pradesh, AIR 1989 SC 1308
Educational qualifications can be made the basis for classification of employees in the matters of pay scales, promotions, et cetera. Higher pay scale can be prescribed for employees possessing higher qualifications. Similarly, in the matter of employee promotion, classification on the basis of educational qualification so as to deny eligibility to a higher post to an employer processing lesser qualification is valid.
State of Jammu and Kashmir Vs Trilok Natah Khosa AIR 1974 SC 1: (1974) 1 SCC 19
Roop Chand Adalakha Vs Delhi development authority, AIR 1989 Sc 307
Educational qualifications can be justifiable be made the basis for qualification for the purpose of promotion to the higher post.
Purpose and Advantages of Promotion
Promotion stimulates self-development and creates interest in the job. According to Yoder, “promotion provides incentive to initiative, enterprise and ambition; minimizes discontent and unrest; attracts capable individuals; necessitates logical training for advancement and forms an effective reward for loyalty and cooperation, long service etc.” The purposes and advantages of promotions are to:
recognize employee’s performance and commitment and motivate him towards better performance;
develop competitive spirit among employees for acquiring knowledge and skills for higher level jobs;
retain skilled and talented employees;
reduce discontent and unrest;
To fill up job's vacant position that is created due to retirement, resignation or demise of an employee. In this case next senior employee will be promoted to the vacant job.
utilize more effectively the knowledge and skills of employees; and
attract suitable and competent employees.
No Reservation (Scheduled Castes and the Scheduled Tribes) In Promotions Without Examining Adequacy Of Representation In Promotional Posts : Supreme Court of India
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Pravakar Mallick & Anr..Vs The State of Orissa & Ors
Following the principle that Scheduled Castes and the Scheduled Tribes reservation in promotions cannot be granted without examining adequacy of representation in promotional posts, the Supreme Court of India.
In this backdrop, the bench observed
"While it is open for the State to confer benefit even through an executive order by applying mandatory requirements as contemplated under Article 7 6(4A) but the Resolution dated 20.03.2002 is merely issued by referring to the instructions of the Union of India without examining the adequacy of representation in promotional posts, as held by this Court"
The bench specifically noted the fact that in
In view of the stand of the respondent-State in the counter affidavit filed in the writ petition and further in view of the submission made by the learned counsel for the State of Orissa that no benefit of seniority was extended by any State Act or by any executive order by examining adequate representation in terms of Article 16(4A) of the Constitution.
Constitution (Eighty-Fifth) Amendment Act, 2001, Article 16(4A) reads as under :
“16. Equality of opportunity in matters of public employment.-
(1) …. …. ….
(2) …. …. ….
(3) …. …. ….
(4) …. …. ….
(4A) Nothing in this article shall prevent the State from making any provision for reservation in matters of promotion, with consequential seniority, to any class or classes of posts in the services under the State in favour of the Scheduled Castes and the Scheduled Tribes which, in the opinion of the State, are not adequately represented in the services under the State.” The above said amended constitutional provision makes it clear that in case the State is of opinion, SC & STs are not adequately represented, State is empowered to make a provision for reservation in matters of promotion with consequential seniority, to any class.
Government Resolution dated 20.03.2002 can neither be termed as law made in exercise of enabling power of the State under Article I6(4A), nor does it satisfy the parameters laid down in the various decisions of this Court. The Resolution has no legal basis.
What is meant by Consequential Seniority in case of promotion of employee?
The Constitution of India (Eighty-Fifth) Amendment Act, 2001, Article 16(4A) deals with consequential seniority in matter of promotions to reserved category employees. If reservations (Scheduled caste / Scheduled tribe) are applicable in the promotions of employees, there are chances to such employees to get promotions prior to their seniors belonging to general/OBC category. In such cases, an employee promoted under reservation category will become senior in the promoted post / cadre. Later, if senior employee belonging to general/OBC gets promoted, he/she will become junior and will not regain his/her seniority in the said promotion post, as already promoted employee belonging to reservation category will be treated as senior in the promotion post, which is called as consequential seniority.
The Constitution (Eighty-fifth Amendment) Act, 2001, modifies Clause. 4A of Art. 16. It now reads as follows:
"Nothing in this article shall prevent the State from making any provision form reservation in matters of promotion with consequential seniority of any class or classes of posts in the services of the State in favour of the Scheduled Castes and the Scheduled Tribes which in the opinion of the State are not adequately represented in the services under the State.”
Clause 4A in Art. 16 was introduced in the Constitution by the 77th Amendment. Now the words italicized have been introduced by the 85th Amendment of the Constitution of India.
What is meant by Catch Up Principle or Catch Up Rule in promotions of employees?
If reservations (Scheduled caste / Scheduled tribe) are applicable in the promotions of employees, there are chances to an employee belonging to reserved category and junior amongst other employees, will have first chance to get promoted to the next post/cader under the reservation category. In those case, Catch Up Rule or Catch Up Principle means, if a senior employee of general/OBC category is promoted after Scheduled caste / Scheduled tribe employee, he/she will regain his seniority in promotion post over the juniors promoted earlier to him/her under the reserved vacancies.
No Fundamental Right To Claim Reservations In Promotion: Supreme Court of India
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Mukesh Kumar & Anr. Vs The State of Uttarakhand & Ors. in Civil Appeal No. 1226 of 2020
The Supreme Court has observed that the State Government is not required to justify its decision to not give reservation in promotion on the basis of quantifiable data, showing that there is adequate representation of members of the Scheduled Castes and Scheduled Tribes in State services.
Favouring family members leads to employee disengagement: Study
In a study conducted by TJinsite, research and knowledge arm of TimesJobs.com, a large proportion of employees expressed that competency should be the most important criteria for employment or promotion. And, they feel disengaged when relatives are given a key position or promotion, bypassing talented employees. The study highlighted that nepotism policies -favoritism towards family members- degrade level of commitment, loyalty and the sense of ownership amongst employees and leads to higher attrition rate.
"Nepotism is most commonly seen in family run businesses. And, family run businesses (FRBs) constitute most businesses in India. While favouring family members is very common in family businesses, it runs the dual risks of demoralising non-family members and increasing complacency among family members. The after effects of favouring family members for a senior level position on the existing employees are severe.
Types of Promotions
Different types of promotions are discussed below.
a) Up or Out Promotion: In this case, an employee either earns a promotion or seeks employment elsewhere. Out promotion usually leads to termination of employee and joining some other organization in a better position.
b) Dry Promotion: In this type, promotion is given in lieu of increase in salary. For example, when an university professor is made Head of the Department, there is no increase in salary.
c) Paper promotion: Paper promotion happens on seniority of employee in government sector having different departments. Paper promotion is an employee promotion given to the employee belonging to the parent department, but indeed working in another department on transfer, on request of employee or due to exigency of work. Paper promoted employee draws salary pertaining to job in another Department, but not according to promotion’s job in the parent Department.
The reason for giving paper promotion is, generally in government sector, employee promotion will be given in order of seniority of employees subjected to the vacancy position created. Whoever is most senior employee amongst all employees in the same cader, out of them top senior employee will be given promotion. When a top senior is working in another Department, in such cases to fill up the vacancy position, promotion on paper will be given to such employee, because he’s not occupying job in the parent Department. Subsequently promotion will be given to the next top senior who is working in the parent Department. Paper promoted employee draws salary pertaining to the job of another Department only but not according to the job, which got paper promoted in the parent Department.
The main objective of a promotion is to protect the right, seniority of an employee and reserve his/her promotion seat in the parent department when an employee reverts to his/her parent department.
Morning Star is a tomato processing company based in California, with revenues of $700 million and over 400 employees. These unremarkable facts would not qualify for a cover story in Harvard Business Review by management guru Gary Hamel (December 2011). What makes the company remarkable is that it has no bosses, titles or promotions. Can companies be managed without bosses, titles or promotions? More >>
The Domino's Pizza chain focused on its store managers to reduce worker turnover from a staggering 158% down to 107%, according to a StartupJournal.com article. To accomplish this, Domino's HR department deployed a store manager strategy of hiring more selectively, coaching them on how to create better workplaces, and motivating them with the promise of stock options and promotions.
Promotion Program and Procedure
Every organization should make advance plans for promotion program. A carefully planned promotion program has four elements:
a) formulation of promotion policy,
b) identification of promotion channels,
c) promotion appraisal, and
d) centralized records. We shall discuss each element in detail.
a) Formulation of Promotion Policy:
Each organization needs to maintain a balance between the internal sources of personnel promotion and external sources by means of recruitment. Hence, promotion must be based on consistent, fair and clear cut policy. The National Institute of Personnel Management (NIPM) has suggested a promotion policy on the following lines:
Encouragement of promotion within the organization instead of looking outside to fill vacancies in higher places.
An understanding that ability as well as seniority will be taken into account in making promotions. Ability, efficiency, attitude, job performance, physical fitness, leadership, experience, and length of service are some of the factors considered in making promotions.
Drawing up an organization chart to make clear to all the ladder of promotion. Where there is a job analysis and a planned wage policy, such chart is quite easy to prepare.
Making the promotion system clear to all concerned who may initiate and handle cases of promotion. Though departmental heads may initiate promotion, the final approval must lie with the top management, after the personnel department has been asked to check from its knowledge whether any repercussion is likely to result from the proposed promotion.
All promotions should be for a trial period to ascertain whether the promoted person is found capable of handling the job or not. Normally, during this trial period, he draws the pay of the higher post, but it should be clearly understood that if “he does not make the grade” he will be reverted to his former post and former pay scale.
b) Promotion Channels:
Promotion channels should be identified and recorded on paper. This process is related with job analysis and career planning of an organization.
c) Promotion Appraisals:
The promotion of an employee is entirely dependent upon his/her performance appraisal outcome.
d) Centralized Records:
The education, experience, skills, abilities and evaluation of all employees should be recorded and maintained in a centralized manner by the department of the organization, because basing on these attributes, promotion is given to an employee.
Bases for Promotion Promotion is given on the basis of seniority or merit or a combination of both.
Let us discuss each one as a basis of promotion.
Seniority as a basis:
It implies relative length of service in the same organization. The advantages of this are: relatively easy to measure, simple to understand and operate, reduces labour turnover and provides sense of satisfaction to senior employees. It has also certain disadvantages: beyond a certain age a person may not learn, performance and potential of an employee is not recognized, it kills ambition and zeal to improve performance.
Merit as a basis:
Merit implies the knowledge, skills and performance record of an employee. The advantages are: motivates competent employees to work hard, helps to maintain efficiency by recognizing talent and performance. It also suffers from certain disadvantages like: difficulty in judging merit, merit indicates past achievement, may not denote future potential and old employees feel insecure.
In State of Jammu & Kashmir v. Shri Trilokinath Khosa (1974) 1 SCC 19, the Supreme Court of India held that a classification made on the basis of educational qualifications to achieve administrative efficiency is not arbitrary or impermissible under Articles 14 or 16 of the Constitution.
In State of Jammu & Kashmir v. Shri Trilokinath Khosa (1974) 1 SCC 19, Roop Chand Adlakha v. Delhi Development Authority and others 1989 Supp (1) SCC 116; State of Uttarakhand v. SK Singh (2019) 10 SCC 49 and other cases, Supreme Court viewed even where persons having different qualifications are given an opportunity for promotion, absolute equality cannot be maintained as the administration may consider giving the lesser qualified a promotional opportunity on different terms, rather than prohibiting them altogether.
Supreme Court -case laws
Pushpa Vishnu Vs State of Maharastra, AIR 1995 Sc 1346
Seniority of an officer is determined with reference to the date of his regular appointment made according to the rules. This is consistent with the articles 14 and article 16 of the Constitution of India.
K.C. joshi vs union of India AIR 1991 SC 284
Any earlier temporary or ad hoc service before regular appointment is to be considered as fortuitous and is not to be counted for the purpose of seniority.
Karam Chand Vs Haryana state electricity board, AIR 1989 SC 261:
The date of promotion to your particular grade or category determines the seniority in that grade or category.
INDIA: Insurance Regulatory and Development Authority (IRDA) employees approached Andhra Pradesh High Court on the irregularities in their promotions. Aggrieved employees allege that their promotions are not being done in accordance with prescribed regulations, which prescribes merit, suitability and seniority of employee should be considered while promotions. In response to this, the honourable High Court of Andhra Pradesh issued interim stay on the promotion of employees. -- The economic Times, 22-dec-12
Seniority-cum-Merit as basis:
As both seniority and merit as basis suffer from certain limitations, therefore, a sound promotion policy should be based on a combination of both seniority and merit. A proper balance between the two can be maintained by different ways: minimum length of service may be prescribed, relative weightage may be assigned to seniority and merit and employees with a minimum performance record and qualifications are treated eligible for promotion, seniority is used to choose from the eligible candidates.
Educational qualification is a valid ground for classification between persons of the same class in matters of promotion and is not violative of Articles 14 and 16 of the Constitution - Supreme Court
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Chandan Banerjee & Ors v. Krishna Prosad Ghosh & Ors,
Court held that
Persons drawn from different sources and integrated into a common class can be differentiated on grounds of educational qualification for the purpose of promotion, where this bears a nexus with the efficiency required in the promotional post;
Educational qualification may be used for introducing quotas for promotion for a certain class of persons; or may even be used to restrict promotion entirely to one class, to the exclusion of others;
Educational qualification may be used as a criterion for classification for promotion to increase administrative efficiency at the higher posts; and
However, a classification made on grounds of educational qualification should bear nexus to the purpose of the classification or the extent of differences in qualifications
" the Court had adverted to the well-established principle that once direct recruits and promotees are integrated into a common pool, they cannot be treated differently based on the 'source of recruitment'. This however does not imply that they cannot be classified on other reasonable grounds. Thus, whether there are two different streams of recruitment, or a single source of recruitment merged into a common pool, the classification that was upheld in Trilokinath Khosa (supra) was based on the educational qualification which was linked to the purpose of enhancing administrative efficiency in the organization. We are unable to agree with the submission of the appellants that the decision in Trilokinath Khosa (supra) is not applicable in the present case."
"Kolkata Muncipal Corporation has urged before this Court that the distinction in education qualification for promotion has been made for the purpose of enhancing administrative efficiency. It cannot be denied that SAEs once promoted to the post of an AE in these supernumerary posts would be performing the task and functions of an AE. Thus, it is not merely a change in the designation of an SAE to an AE, but involves an increase in workload, supervisory functions, and performance of the regular functions of an AE. Since that is the case, we do not find any reason why the rationale underlying the need for higher degree-holders in the AE cadre through regular promotion would not be applicable in the case of supernumerary posts."
"While creating supernumerary posts, KMC has not completely restricted the promotional avenues of diploma-holder SAEs who have stagnated in their service. It has provided adequate opportunity to them to advance in their career, although on different terms and conditions. Thus, the promotional policy of KMC for supernumerary posts is not irrational or arbitrary or to the detriment of diploma holder SAEs. In matters of public policy and public employment, the legislature or its delegate must be given sufficient room to decide the quality of individuals it seeks to employ as against different positions. As long as these decisions are not arbitrary, this Court must refrain from interfering in the policy domain," the bench observed.
The principle of initial date of appointment/continuous officiation may be the valid principle to be considered for adjudging inter se seniority- Supreme Court of India
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Facts of the case
The Military Engineering Service for administrative purposes was bifurcated into five Commands being the Eastern, Western, Northern, Southern and the Central Command with an officer of the rank of Chief Engineer being the administrative head and controller of each Command.
Process of selection at the same time was initiated by the office of Chief Engineer in all the five Commands followed with the separate select list in the order of merit in each of the respective Commands came to be published in the year 1983. In Western Command, a select panel of 261 candidates was published on 29th June, 1983. In sequel thereof, appointments were made as per the select list notified based on the order of merit in their respective Commands. The trouble arose when candidates who were selected and placed in the select panel dated 29th June, 1983 of the Western Command but curiously after 5 years down the line were appointed from April 1987 to April 1988 in the Western Command.
Their seniority was accordingly determined by the respondents on the basis of their date of joining.
Court held that
"We are also of the view that in the matter of adjudging seniority of the candidates selected in one and the same selection, placement in the order of merit can be adopted as a principle for determination of seniority but where the selections are held separately by different recruiting authorities, the principle of initial date of appointment/continuous officiation may be the valid principle to be considered for adjudging inter se seniority of the officers in the absence of any rule or guidelines in determining seniority to the contrary."
"the principle of initial date of appointment/continuous officiation may be the valid principle to be considered for determination of inter se seniority in the absence of any rule or guidelines to the contrary keeping in view the principles laid down by the Constitution Bench of this Court in Direct Recruit Class II Engineering Officers’ Association Vs. State of Maharashtra & Ors (1990) 2 SCC 715."
Employees who reach office early more likely to get promoted
LONDON: Want to bag a promotion at work? Reach office early!
Employees who arrive at work earliest are most likely to get a pay rise, regardless of their performance and total time worked, according to a new study. Researchers also found that those who turn up late and leave the office last are more likely to be overlooked for promotions.
"We think it's a cultural thing. Those who turn up early are thought of as hard workers, while if you turn up later, you're perceived as lazy," said Kai Chi Yam, who led the research at the University of Washington.
Researchers surveyed 149 pairs of employees and managers about when each arrived at work and how the manager rated the employee's conscientiousness and performance.
People who started later were rated worse, particularly when their managers were early risers. There was no evidence that people who went home early were seen as less productive. In a second experiment, students took the role of a manager in a fictional scenario to rate staff performance.
They were told that the employees' performances were identical but their start times varied. Late start times led to lower ratings, even though productivity and total hours were the same.
The study is to be published in the Journal of Applied Psychology.
Reservations in employee promotions for PWD (Persons With Disabilities) not prohibited
Employment is a key factor in the empowerment and inclusion of people with disabilities. It is an alarming reality that the disabled people are out of job not because their disability comes in the way of their functioning rather it is social and practical barriers that prevent them from joining the workforce. As a result, many disabled people live in poverty and in deplorable conditions. They are denied the right to make a useful contribution to their own lives and to the lives of their families and community.
Parliament passed the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation)Act, 1995 being Act 1 of 1996. The statement of objects and reasons for the said Act states that a Conference held at Beijing, China, in December, 1992 had adopted the Proclamation on the Full Participation and Equality of People with Disabilities in the Asia and the Pacific region India being a signatory to the said proclamation found it necessary to enact a suitable legislation to provide for the special care that is necessary to remove discrimination against persons with disabilities and to make special provision for the integration of such persons into the social mainstream.
Section 2(i) of the said Act defines “disability” as follows:-
“(i) “disability” means—
(ii) low vision;
(iv) hearing impairment;
(v) locomotor disability;
(vi) mental retardation;
(vii) mental illness;”
Section 2(t) defines “person with disability” as follows:-“(t) “person with disability” means a person suffering from not less than forty per cent of any disability as certified by a medical authority;”
Section - 32. Identification of posts which can be reserved for persons with disabilities.-Appropriate Governments shall-
(a) identify posts, in the establishments, which can be reserved for the persons with disability;
(b) at periodical intervals not exceeding threeyears, review the list of posts identified and
up- date the list taking into consideration the developments in technology.
Section - 33. Reservation of posts.- Every appropriate Government shall appoint in every establishment such percentage of vacancies not less than three per cent for persons or class of persons with disability of which one per cent each shall be reserved for persons suffering from-
(i) blindness or low vision;
(ii) hearing impairment;
(iii) locomotor disability or cerebral palsy, in the posts identified for each disability:
Provided that the appropriate Government may, having regard to the type of work carried on in any department or establishment, by notification subject to such conditions, if any, as may be specified in such notification, exempt any establishment from the provisions of this section.”
Persons With Disability Act 1995 (PwD A 1995) Mandates Reservation In Employee Promotions Too : Relief Was Granted To RBI Employee By The Supreme Court.
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Facts of the case
Mr. Nair, a person having ‘Post-Polio Paralysis of Limbs’ with 50% disability to secure promotion to the post of Assistant Manager in the RBI by claiming benefit envisaged by the Persons with Disabilities (Equal Opportunity, Protection of Rights and Full Participation) Act, 1995 (hereafter ‘the PwD Act, 1995’) as well as various office memoranda issued from time to time by the Department of Personnel and Training (hereafter ‘DoPT’, for short) of the Ministry of Personnel, Public Grievances and Pensions, GoI, and circulars issued by the RBI.
Court observed that sub-section (2) of section 47 does not contain any mandate requiring the employer or establishment to make reservation in promotional posts; on the contrary, it is a command to the employer or establishment that merely because an employee is suffering from a disability, as defined in section 2(i) of the PwD Act, 1995, he is not to be denied promotion.
Court noticed that the PwD Act, 2016 expressly makesavailable benefits of reservation to promotional posts for personswith disabilities in that the first proviso to section 34 ordains that reservation in promotion shall be in accordance with such instructions as are issued by the appropriate Government from time to time.
We direct RBI to grant notional promotion to Mr. Nair on thepost of Assistant Manager Grade – ‘A’, to be effective from the date of presentation of the writ petition before the High Court, i.e., 27th September, 2006 and actual promotion from 15th September, 2014, i.e., the last date for compliance of the order of the High Court. This exercise must be completed within a period of 2 (two) months from date. The monetary benefits accruing to Mr. Nair with effect from 15th September, 2014 shall be computed and released by 4 (four) months from date.
Since Mr. Nair has a couple of years for his retirement on superannuation, it is needless to observe that in computing his retiral benefits due regard shall be given to his promotion, as directed above, with effect from 27th September, 2006.
The basis for providing reservation for PWD is physical disability and not any of the criteria forbidden under Article 16(1) of Constitution of the India
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CIVIL APPEAL NO. 1567 OF 2017
SIDDARAJU VERSUS STATE OF KARNATAKA & ORS.
The bench in Rajiv Kumar Gupta & Others v. Union of India & Others – (2016) 6 SCALE 417 and in the context of Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 had noted that there is no prohibition against reservation in promotion for Persons With Disabilities.
Court held that
"The basis for providing reservation for PWD is physical disability and not any of the criteria forbidden under Article 16(1)"
"Once a post is identified, it means that a PWD is fully capable of discharging the functions associated with the identified post. Once found to be so capable, reservation under Section 33 to an extent of not less than three per cent must follow. Once the post is identified, it must be reserved for PWD irrespective of the mode of recruitment adopted by the State for filling up of the said post."
Employees have no "vested" right to promotion
Feb, 2012, NEW DELHI [India]: The Delhi High Court said though employees have no "vested" right to promotion but they should not be deprived of it "arbitrarily" and without any reasonable ground by their employers.
"It is true that no employee has a vested right for promotion but respondents (employer) cannot act arbitrarily and without any reasonable excuse defer the meeting of Departmental Promotion Committee (DPC) and thereby deprive the employee of his legitimate expectations for being considered for promotion to a post if he is eligible for being promoted," a bench of justices B D Ahmed and V K Jain said.
March, 2012: In the other case women officers recruited in short service commission of Indian Air Force, filed a petition in the Delhi High Court for making them eligible for promotion and permanent job. The High Court issued orders to Indian Air Force in favour of women officers to make there jobs permanent and promote them to the higher rank with all consequential financial benefits .
Employee Promotion Letter - sample
Demotion of an employee
Demotion refers to the lowering down of the status, salary and responsibilities of an employee. Demotion is used as a disciplinary measure in an organization. The habitual patterns of behaviour such as violation of the rules and conduct, poor attendance record, insubordination where the individuals are demoted. Beach (1975) defines demotion as “the assignment of an individual to a job of lower rank and pay usually involving lower level of difficulty and responsibility”.
Causes for demotion of an employee
Demotion may be caused by any of these factors:
Adverse business conditions: Employees may be demoted because of recession faced by company.
Incompetency of the employee: It happens when an employee finds it difficult to meet the required standard.
Technological changes: When employee is unable to adjust with any technological change made by the company.
Yoder, Heneman, Turnbull and Stone (1958) have suggested a fivefold policy with regard to demotion practice. A clear and reasonable list of rules should be framed, violations of which would subject an employee to demotion;
This information should be clearly communicated to employees;
There should be a competent investigation of any alleged violation;
If violations are discovered, there should be a consistent and equitable application of the penalty, preferably by the immediate supervisor;
There should be a provision for review. (In a unionised case, this will be automatic via the grievance procedure; in a non-unionised case, the employer will need to make other provisions for review).