Upon entering the workforce, the goal is often to move up the corporate ladder. That is done by receiving promotions within a company. An age-old debate among employers has been whether one should receive a promotion based on seniority, their time with the company or merit, their actions while employed.
While there are pros and cons to each promotional system, the benefits of promoting based on merit greatly outweigh the cons. Offering promotions based on seniority can lead to high-quality employees developing a lackluster work ethic and even taking their skillset elsewhere as they look to advance in their career.
When deciding upon the best promotion system for your company understand that the decision you make will have an impact on the overall corporate culture. It’s best to take the time to map out your specific process via a thorough strategic planning process.
When an employee develops the understanding that they will be promoted based on a seniority system instead of a merit-based system a reduction in motivation and engagement can occur. This is because they realize despite how hard they work or if they go above and beyond the scope of their position, it won’t have an impact on if they receive a promotion. Therefore they begin to question why they should give their job 100% of their effort.
While many people love their jobs and the joy and satisfaction associated with their position are intrinsic motivators, the external motivating factor for many is an increase in pay and status. Taking that away dramatically deflates their overall motivation.
Maintaining employee motivation and engagement can be a difficult task without adding promotion systems to the equation. If your company is struggling overall with keeping employee engagement high, you should review my free ebook, 5 Tips to Improve Employee Engagement.
Highly skilled employees know their worth to a company. They generally undertake expensive schooling, loads of professional development, practice, and training to reach their skill level. Most employees don’t take on this level of dedication to remain stagnant in their career.
A seniority-based promotion system can lead to decreased retention rates as highly qualified employees who are passed up for promotions due to lack of seniority leave the company to find positions that will recognize and reward their abilities.
A high turnover rate then leads to more employees entering the company who are lower on the totem pole and less likely to receive a promotion. The cycle then continues.
A culture of decreased efficiency can occur when a seniority-based promotion system is put into place. Both employees with seniority and those without will be less motivated to perform at high levels for different reasons.
Those with seniority know that their odds of getting a promotion are high based solely on their number of years with the company. They don’t have to perform at an optimal level because of their tenure.
Those without seniority, as stated previously, know they will not receive a promotion, so without that as a motivating factor, they don’t give 100% to their position.
A seniority-based promotion system also rids the company of the healthy competition amongst employees that sometimes leads to better job performance.
Imagine giving your all to a company and continually being looked over for a promotion because you haven’t been employed for a certain number of years. Instead, you watch those will lesser abilities promoted to higher level positions year after year. A certain amount of frustration builds within you when that is your vantage point.
This frustration is what leads to decreased motivation, decreased efficiency, and increased turnover rates within a company.
Though there are downfalls to a seniority-based promotion system, a merit-based promotion system can also have its difficulties.
When merit-based promotions are in place, there is often fear that those who are more popular or have a better relationship with the management team will receive a promotion first. That naturally can also lead to increased frustration and turnover rates along with decreased efficiency and motivation.
If a merit-based system is put in place, it’s best to ensure that there is a standard for promotions that is consistent and impartial. Everyone should be aware of the general criteria considered when promotions are given, and those in charge of promoting should use these specific criteria for each promotion. You should always be able to provide a clear explanation as to why the person you promoted received the promotion over others who were also eligible.
Knowing that promotion selections are impartial and consistent decreases the feeling that merit-based promotions are based more on relationships than actual work-related skills.
Some companies have found the best system for promotions to be one that combines the merit-based system with the seniority-based system.
This system considers both with employee merit being the primary criteria and seniority being part of the secondary criteria.
A hybrid promotion system allows companies to take the work of the employee into consideration while also giving preference to the employees who have been with the company for an extended period.
In this situation, if employee A and employee B have a similar work ethic and results, the employee who has been with the company longer would receive the promotion.
Whether your company chooses to promote based on merit or seniority, it’s vital that the system be as fair and impartial as possible. Your goal should be to develop the best team within your organization and to keep those highly skilled employees you must create systems that are understood by all and fair.
Without a proper promotion system in place, you risk the chance of losing high-quality employees who otherwise would have remained within your company.