Nonprofit organizations do so much more for the community than their written purpose, but it is the people at the organizations that keep the momentum going. Taking care of those people should be a priority. Employee promotions are one of the human resource areas that can’t be ignored. In this article, we discuss the different types of promotions and how to know which staff members need one.
What Is Employee Promotion?
Promoting employees is the process of moving staff members up through the organizational ranks of an organization. Employee promotion is usually accompanied by a new job title, new or increased responsibilities, an increase in salary, and other benefits.
Types of Employee Promotion
Horizontal Promotion
Horizontal promotion is one where the employee’s duties remain the same. There is usually a pay raise or increase in benefits, but no assignment of additional responsibilities. The job title may change to signify the promotion. An example would be promoting a maintenance technician to a senior maintenance technician.
Vertical Promotion
A vertical promotion occurs with a change in duties. Employees that gain or improve skills are often rewarded with this type of promotion. Job title and pay increase, like with a horizontal promotion, but responsibilities also increase. A common vertical promotion is moving a staff member to the management team.
Dry Promotion
While a horizontal promotion describes increased pay without increased responsibilities, a dry promotion represents the opposite. When an employee receives a dry promotion, they are given more responsibility but without increased pay or benefits. An example of a dry promotion would be promoting a team member to team leader, but not being able to offer them an increase in salary.
Open and Closed Promotion
Whether a promotion is open or closed refers to who is eligible for the promotion or new position. With an open promotion, the opportunity is available to everyone in the organization. A closed promotion is only offered to a select group of staff members.
Benefits of Promoting Employees
Fulfills Employee Expectations
A top benefit of promoting employees is that it fulfills their expectations. Employees look towards promotions as something to strive for. When they work hard and put in the time to increase their skill level or contribution to the team, they expect to be considered for promotions.
Reduces Attrition
Employee attrition occurs when employees leave the organization creating a negative effect on productivity. When employees are not compensated with promotions fairly and regularly, attrition increases which can have long-lasting negative effects on the nonprofit as a whole.
Increases Motivation & Productivity
Promotions that come with a pay raise are the number one motivator for most staff members. When employees are motivated, they are also more productive. Increasing productivity benefits the overall goals and mission of the nonprofit, so keeping employees happy and motivated should be a priority.
Cost-Effective Than Hiring New Employees
Hiring and training new staff members is expensive. While promotions can be a scary line item on the budget for leadership to sign off on, it is often the lesser of two evils. Slight, but fair, increases to pay will help retain good help, which is more cost-effective in the long run.
Career Growth
Career growth goes hand in hand with employee motivation. Staff members view promotions as a natural part of their career growth. Many good employees will leave a job when they feel there is nowhere else for them to grow within the organization.
Rewards and Recognition
Much like needing to feel that there is the growth potential for an employee’s position, they also need to feel appreciated. Making sure to provide rewards and recognition, like through any type of promotion keeps employees on track to stay loyal to the organization.
How To Know Who To Promote?
Role: an employee doing much more than the job title requires
Employee promotions are sometimes earned before they are granted. When conducting annual department and employee reviews, it is important to look at roles. A great way to measure if a staff member is doing more than the role originally asked for is to compare the original job description with the current responsibilities of the team member. Employees that are doing more than their position asks for deserve a raise.
Appraisal: an employee who has gone long enough without a promotion
Many employees expect annual pay raises, but that is not the case for promotions. If an employee is valued at a certain position but has been in the same role for too long, it is time to talk about promotion eligibility. Being proactive about promotions will help prevent employee attrition.
Emotional intelligence: employees who know how to connect well with others
Most required job skills can be taught, but you can not teach emotional intelligence. Employees that can anticipate the needs of clients, donors, and coworkers are hard to come by. If you have an employee that connects great with others, fair promotions will help keep their talent at your organization.
Performance Reviews
There are many reasons to conduct regular performance reviews, but one reason is to stay on top of which employees need a promotion. Many organizations have great success with asking staff members, verbally or through a written performance review, if they are happy in their current role and if they feel they are due a promotion.
Final Thoughts
Nonprofit organizations do so much more for the community than their written purpose, but it is the people at the organizations that keep the momentum going. Taking care of those people should be a priority. Employee promotions are one of the human resource areas that can’t be ignored.
Jo-Anne Williams Barnes, is a Certified Public Accountant (CPA) and Chartered Global Management Accountant (CGMA) holding a Master’s of Science in Accounting (MSA) and a Master’s in Business Administration (MBA). Additionally, she holds a Bachelor of Science (BS) in Accounting from the University of Baltimore and is a seasoned accounting professional with several years of experience in the field of managing financial records for non-profits, small, medium, and large businesses. Jo-Anne is a certified Sage Intacct Accounting and Implementation Specialist, a certified QuickBooks ProAdvisor, an AICPA Not-for-Profit Certificate II holder, and Standard for Excellence Licensed Consultant. Additionally, Jo-Anne is a member of American Institute of Certified Public Accountant (AICPA), Maryland Association of Certified Public Accountants (MACPA), and Greater Washington Society of Certified Public Accountants (GWSCPA) where she continues to keep abreast on the latest industry trends and changes.