What is a demotion?

A demotion is a permanent reassignment to a lower position than the employee previously held. The position will typically have less responsibility or required skill, as well as a lower pay grade than the previous position.

Demotions can be voluntary or involuntary, and they can occur as a result of poor employee performance, position elimination, disciplinary actions, or organisational restructuring. A demotion in hrm allows a company to keep a valuable employee by returning him or her to his or her previous position. 

However, the employee may not react well to the demotion, and if the demotion is the result of employee misconduct, it may send the message to other employees that the company is lax about disciplinary action.

Reasons to demote an employee

Employees can be demoted for a variety of reasons, including:

  • The employee delivered a subpar performance.
  • The employee lacks the necessary skills for their current position.
  • You’re getting rid of the employee's job.
  • You are disciplining the employee for his or her misbehaviour.

An employee may also voluntarily request a demotion. Here are some reasons why an employee might request a demotion:

  • The employee wishes to have fewer responsibilities.
  • The employee is resigning from your company.
  • The employee wishes to change jobs.
  • The employee wishes to rebalance their work-life balance.
  • The employee wishes to work remotely or from a different business location, but his or her current position does not allow for this.

What is the difference between demotion and termination?

A demotion of employees may be a good solution if an employee is valuable to your company but isn't thriving in their current role. If an employee commits a wrongdoing, causes disruptions, or isn't a good fit for your company, these may be good reasons to fire them.

Problems of demoting employees

There are numerous disadvantages to demoting employees that may make it difficult to do so.

1. For some employees, a demotion can be humiliating and demoralising. Employee morale can suffer as a result of public humiliation.

2. If the employee who was demoted was a supervisor, it may be difficult for them to rejoin the people they once managed.

3. If you have already filled that position, you may not be able to demote an employee. If this is the case, you may need to transfer the employee to a different position.

4. If you are disciplining, demotion in hrm may not be the best form of discipline, especially if used alone. Discipline does not always correct an employee's wrongdoing.

In the end, the demoted employee may leave your company for another position. Create an incentive for the employee to stay with your company if you can.

Four steps of demoting an employee

It can be difficult to inform an employee that they have been demoted. Here are four steps to successfully navigating a demotion.

1. Inform the employee of the demotion

Have a private conversation with the employee before demoting them. What does your employee's demotion entail? Explain why you are demoting the employee, especially if it is due to poor performance.

Express your desire to retain the employee. After all, you're not firing them. Explain why you believe the employee will perform better in the new role.

2. Describe the new position

After explaining why you are demoting the employee, inform him or her of the new position. List the responsibilities and expectations of the position.

Inform the employee at this time if the new position comes with a lower salary.

3. Create a transition strategy

Create a transition plan with the employee. Set a date for when the employee will be completely immersed in their new role.

Include in your plan if the employee needs to pass off projects or documents to another employee.

4. Inform the appropriate individuals

It may not be appropriate to notify all of your employees of the demotion. However, the demotion of employees may have an impact on some employees. For example, if the demoted employee supervised others, you should inform those employees as to who they will now report to.

You should also think about what you will tell your employees. Employees do not need to be aware of every aspect of their demotion.

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