Not a Member? Get access to HR news and resources that you can trust.
Here is how HR can help prevent the missteps that could cost your company big in court.
Is your employee handbook ready for the changing world of work? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
60+ new SHRM Seminar dates in 10 U.S. cities and virtually.
Expand your influence and learn how to become an effective leader -- Join us in Phoenix, AZ, October 2-4, 2017.
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
As a professional member of SHRM, you have free, exclusive access to the HR Knowledge Center. Our advisors have many years of HR experience and a wide variety of resources to assist you with your HR questions. You may reach the Knowledge Center at (800) 283-7476, option #5, or by using the
HR Knowledge Center Request Form.
The HR Knowledge Center has gathered resources on current topics in HR management. b to view and request information.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Don’t Lose Sight! What Does Poor Preventive Care Cost Your Business?
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 3,200 companies