Demotion

It is just the opposite of promotion. It means the reduction or downgrading of an employee in terms of status, salary and responsibility. It is usually a punitive measure and often a first step towards discharge or dismissal. Demotion. however, becomes necessary under the following circumstances :

(1) When an employee is found guilty of serious misconduct or In discipline.

(2)  When a company curtails some of its activities and employees with longer service 'bump' persons in lower jobs with shorter service.

(3)  When there have been errors in promotions and these need to be corrected.

All demotions produce adverse effects on the status. interpersonal relations and self-esteem of demoted employees. But demotions which 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 

  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 demotions.

(3) Making demotions without a loss of pay to demoted person.

(4)  Making individuals aware of their prospect of demotion well ahead of time.