Major Reasons for Employee Demotion

Employee demotion is not very known to us as employee promotion. The demotion of the employee is just the opposite of promotion. It means the reduction or down-grading of an employee in terms of status, salary, and responsibility. It is usually a punitive measure and often the first step towards discharge or dismissal. Here are some major reasons for employee demotion.

Demotion, however, becomes necessary under the following circumstances:

Reasons for employee demotion

Reasons for employee demotion
Reasons for employee demotion
  1. If the employee found guilty: When an employee is found guilty of serious misconduct or indiscipline.
  2. Reduction of activities: When a company curtails some of its activates and employees with longer service ‘bump’ persons in lower jobs with shorter service.
  3. Promotional Mistake: When there have been errors in promotions and these needs to be corrected.

All demotions produce adverse effects on the status, interpersonal relations, and self-esteem of demoted employees. But demotions that follow layoffs and corrections for wrong promotions are generally more acceptable to employees than those which result from punishment.

Management can, however, make demotions acceptable to employees by resorting to the following methods:
Demotion means the downgrading of an employee in terms of status, salary, and responsibility.

  1. Leaving roles of positions and individuals ambiguous or changing titles and job responsibilities. This is likely to disguise demotions.
  2. Maintaining the structure of the organization fluid with the increasing use of work teams, task forces, or project management. This too will help management in hiding emotions.
  3. Making demotions without a loss of pay to a demoted person.
  4. Making individuals aware of their prospect of demotion well ahead of time.

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