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Review Promotion Practices to Avoid Turnover, Lawsuits

The HR department has a big stake in ensuring that an organization's promotions process is well-managed, by helping to guide employees' career paths, maintaining clear policies and keeping workers engaged when they're not promoted.

Poor promotions practices can create dissatisfaction, high turnover and even charges of discrimination if people believe they've been passed over unfairly.

"Promotions are a critical piece in setting the tone for your culture and your reputation in the marketplace," said Steve Wolfe, executive vice president of operations at Addison Group, a staffing and consulting firm in Chicago. "Promotions policies and practices help people understand 'where I'm going to start' and 'what I can do within the guidelines of my career' and 'what I have to accomplish to get where I want to be.' "

Know Who You’ve Got

​Niki Ramirez, SHRM-CP, a former HR director and founder of small-business consultancy HR Answers in Phoenix, believes that line managers should always have an idea of who on their team is interested in advancing their career and who is content where they are.

"I used to have an annual session where I'd talk about big, lofty, long-term goals with each employee and see how their plans fit with the positions coming open on the horizon," she said.

"These conversations with employees about career goals and aspirations are paramount to an employee's success because they can help provide clear direction and are an active way to demonstrate support for your employees' development."

Ramirez recommended setting up quarterly or monthly check-ins with direct reports to gauge their professional development plans. 

Frequent communication will help managers know if their reports want to, for example, move to a new department or learn a new skill, said Karen Puleo, an HR veteran and consultant at Arc Human Capital in Reston, Va. "Without communication happening, someone may get tapped for a promotion they don't even want."

Experts advised never promising a promotion to employees prematurely, which could cause major disappointment.

[SHRM members-only toolkit: Developing Employee Career Paths and Ladders]

Establish Criteria

​It's critical for HR to decide on the minimum criteria for advancement—such as tenure, past performance or leadership potential—and to clearly communicate those requirements to employees.

"Lack of clarity leads to people making assumptions," Wolfe said. "As long as you're consistent in establishing promotions criteria, then people recognize that the promotion is not a subjective decision. If there's ambiguity around who is getting promoted and why, that's when people will make judgments about potential favoritism or discrimination."

Wolfe added that promotions guidelines should be based on accomplishments rather than solely meeting benchmarks on a timeline.

"Having current, accurate job descriptions that outline job duties and educational and experience minimums will assist HR professionals in creating a path for promotion that employees understand and can take advantage of," Ramirez said.

Wolfe said that there will always be intangibles when people are selected for promotion, but HR must be careful to ascertain that promotions are truly earned and not the result of a manager liking one person more than another. "If you can cross-reference their effectiveness in the existing role and their ability to transition to additional responsibilities against the job description, it helps when someone else raises a beef about the promotion," he said.

Policies setting promotion criteria must include a disclaimer that any promotion is up to the organization's discretion, Puleo said.

Communicate Opportunities

​Posting all open jobs internally and externally—including promotion opportunities for employees—can alleviate staff disgruntlement and even an expensive lawsuit. Employers are generally not required to post their job openings, but courts have ruled that employees can sue the company for not advertising open jobs if the company's policy states that it does.

"There is no legal obligation for private employers to post all open jobs," Ramirez said. "However, this practice ensures a wider, more diverse candidate pool, which helps employers avoid claims of discrimination in hiring."

Employers must follow their policies, and exceptions to the policy must be clear. "Often, when we see there's a discrimination claim or lawsuit in relation to a promotion, it's because an employer violated their own policy or assurance to employees," she said. "Whenever employers fail to follow their own policies they open themselves up to liability."

Whether to advertise is always up to the organization, but giving internal candidates a chance to apply first is a good idea, especially if the promotion policy expresses the value of promoting from within, Puleo said.

But there are times when it's better to be flexible with posting, she continued. "If you really know the skillsets of your staff and what the role requires, and there just isn't a match, then I would post internally and externally simultaneously." Promotions also happen through the performance management process. "There are times when an individual meets all requirements for a step up based on past performance and the promotion doesn't get posted at all," she said.

Evaluate Candidates

​Experts advise that HR and hiring managers assess all qualified employees consistently to avoid the appearance of favoritism or discrimination.

"Everyone that applied internally should be given the chance to interview if they meet minimum qualifications," Puleo said. "And if they don't meet the minimums, HR should communicate with them about that and their career path. It's not always easy to let people know what their deficiencies are, but positively communicating with employees takes away the impetus for those employees coming up with their own assumptions about what happened."

Federal and state laws require most employers to make HR decisions such as promotions based on business requirements rather than protected characteristics like age, disability, gender, national origin, race or religious affiliation. HR must be careful in the gray areas.

"If a candidate is selected for promotion who even appears to be less qualified than another candidate who may be in a protected category, that may raise an eyebrow," Ramirez said. "Another place for concern is when companies administer pre-employment tests for promotions that have a negative impact on protected groups. Physical tests, for example, could have a disparate impact on older candidates or candidates with a disability."

Make the Announcement

​Announcing a promotion demands care and tact.

First, offer the promotion to the selected candidate privately to make sure he or she will accept it before letting those who were not selected know, Ramirez said. "Ask the chosen employee to hold off on announcing it for the day, to allow the leadership team to navigate conversations with the other candidates who were not selected," she said.
After that, all internal candidates should be notified first. 

"Speak to internal candidates who were not selected privately, in person, right away once a decision is made," Ramirez said. "This is an important way to preserve your relationship with them and also to continue to support their professional growth in the company. You don't want them to think it's all or nothing, that they weren't selected and now they have no future at the company."

Wolfe advised sitting down with internal candidates who were not promoted and acknowledging what they do well and where they need to grow. "If a person comes away from that conversation recognizing what is needed to work on to advance, they stay invested in their career path [instead of] walking away from a discussion where they are told 'You're just not ready yet,' ­­­­­" he said. "You don't want to lose a talented person who may get disappointed or frustrated with their career path."

Ramirez said HR should prepare for emotional reactions from those not selected and perhaps wait to discuss a more-detailed career development conversation for a day or two. "Often, emotions get in the way of processing the feedback, which can be really valuable," she said.