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Demotions may be proposed for a number of different reasons, including poor employee performance, disciplinary actions, position elimination or organizational restructuring, and at times an employee-desired reduction in responsibility. Each circumstance should be carefully considered prior to determining that demotion is the appropriate action. Additionally, the manner in which a demotion is handled and communicated can directly affect the success or failure of these arrangements.
Employers should thoroughly examine if a demotion can truly achieve the desired purpose. Start with these questions: Will the employee be successful in the demoted role? How will the demotion affect the employee, team or the department? If the demotion is for performance-related issues, have all other performance improvement options been explored? Did the position entail supervisory responsibilities? Will the demotion result in a pay reduction?
Demotions for simple performance-related issues may be both the easiest and most challenging to deal with. If the employee is a long-term employee who was successful in his or her previous role and simply lacked the skill set to be successful in the new position, returning the employee to the previous role may seem logical. However, this choice may face challenges such as following:
Demotions that occur due to misconduct, issues of ethics or other disciplinary matters can be very risky. A demotion is not likely to correct the problem, and it could send the wrong message to other employees that the employer does not take misconduct seriously.
When a demotion is determined to be the appropriate action to take, following these steps can help make the discussion and the transition smoother and less disruptive:
As demotions are usually considered negative employment actions similar to a termination or being rejected for a promotion opportunity, there may be risks associated with questions of fairness, consistency with organizational policy and even discrimination. Therefore, ensuring that company discipline and performance management processes are followed will be critical.
Another risk is retaining an employee who may now have a negative attitude toward the employer and to his or her demoted role. A negative attitude can spread quickly to or negatively affect other employees. Therefore, managers should monitor the transition and quickly respond to any negativity being spread by the employee.
In the end, demotions that occur within the right circumstances can provide an employer with the opportunity to retain a valuable employee while allowing the employee to be successful in a role more conducive with the knowledge, skills or abilities he or she has. Effectively managing the risks and preparing for all contingencies can result in a win for both employee and employer.
SHRM HR Knowledge Center
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HR Knowledge Center Request Form.
The HR Knowledge Center has gathered resources on current topics in HR management. b to view and request information.
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