Promotion is a process of advancement of an employee to a better position where his responsibility increases, his prestige or status is enhanced, with a increase in his salary. Employees are promoted to higher posts on the basis of their performance.
Promotion may be temporary or permanent depending upon the needs of the organization. Promotion naturally results in the greater delegation of the authority with what the employee had earlier.
Basis of Promotion
1. Merit as a basis of promotion
Merit is taken to denote an individual employee’s skills, ability, efficiency, knowledge, and aptitude as measured from educational training and past employment record.

2. Seniority as a basis of promotion
Seniority means relative length of service in the same job within the same organization. There is a positive correlation between length of service in the same job and the amount of knowledge and the level of skill acquired by an employee serve as a basis of promotion.

Benefits of Promotion
An organisation promotes the employee to a higher position to inculcate the morale of the employees, to develop competent spirit, to utilise the employee’s skills, knowledge, to reduce labour turnover, to develop a sense of belongingness. Promotion improves the organizational health. It improves the job satisfaction. It increases the interest in acquiring higher qualifications, in training and in self-development.
Limitations of Promotion
1. Promotion leads to dissatisfaction, poor work performance among the employees who are not promoted.

2. When the superior promotes an employee from within, a vacancy is created when the employee is transferred. The superior needs to fill that position either by promoting again or by recruiting from outside which leads to unnecessary disruption.

3. Organizational effectiveness may decrease through the deceleration of human resource effectiveness as the human resource is mostly unaware of the changes taking place in the business environment and they are often old blood.

4. Seniority does not guarantee quality as it is not necessary that the employees are qualified for the higher position.

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