When should demotion be applicable in a business organization?

“In the workplace, employees should be judged on their merit and hard work and not on aspects that are irrelevant to their performance.”  –  Paul Singer

Demotion may be defined as a reduction in rank, status or position of somebody. It is opposite of promotion, which moves somebody to a lower position often as a punishment. Demotion must be regarded as one of the worst practices that a business does. It must be noted that the process ofsurvival, growth and development of a business organization or making it better lies in the fact that it designs and implements such beneficial policies that must work in constructive terms between the organization and the employees. The management must be vigilant to stop if there are some unethical practices going on in the organization. Demotion should also be regarded as an unethical practice unless it is evidenced by complete genuineness and validated with indisputability. However, there are some situations in which the demotion practice is applicable.

Demotion may be applicable in some ways unless it is not considered as a black mark against the employees. Such as, it is to be applicable when departments need to be merged and the work is to be carried out jointly. Since in such cases the jobs are eliminated, they employees are suggested to accept lower pay than they have been receiving. Still and all, it depends on the employee whether he may accept or leave the company for good.

In some rare cases, employee himself is witnessed of his inability to perform some specific tasks that are to be accomplished in a desired way. On account of his inadequate knowledge, capabilities and exposure, he is required to accept the demotion or is allowed to stay remain on the same position.

If change is the case, whether it is attitudinal, behavioral, technological or methodical, one must not resist change because the change for betterment brings better resultsalways. In this way, there must be acceptance rather than resistance to change. Unfortunately, against those who may not adjust with the changing environment in terms of the above aspects, demotion practice may bring worst changes.

Demotion may be used as disciplinary measure to change the behavior of the employees who work unethically or do not maintain positive attitude, rather, their behavior may be such that may harm the reputation of an organization. However, certain procedures are adopted before the employees are demoted in this way, such as, several verbal warnings, written warnings etc.

As a final note, it must be borne in mind that both managers as well as employees work for the owners of the company. Every employee has full rights to work following the policies and procedures that have been formulated to guide them. Demotion should be applicable only when there are genuine reasons or if it is validated based on the policy and procedure. But, it’s disappointing to note that it is used by higher authorities for their own needs and desires. It is therefore important for a management or the concerned higher authorities to ensure if such practices are reasonable so that the purpose of retaining loyal, efficient, responsible and diligent employees and cherishing their relationships may be accomplished successfully.

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Written by:
K. A. Fareed (Fareed Siddiqui)
Writer, Trainer, Author, Blogger, Software Developer
BBA, MBA-Finance, MPhil-Financial Management, (MSc-Software Engineering)
(PhD-Management)
MA-English, MPhil-English
Post Graduate Diploma in Computer Applications and Programming
Certificate course in English language proficiency
Level 1 – Leadership and Management ILM – UK
Pursuing CMA-USA
Individual Member of Institute of Management Consultants of India