Workplace Wellbeing

4 Ways Employee Promotions Can Benefit Your Organization

Employee promotions don’t just fill a gap—they nurture loyalty, enhance motivation, and ignite morale within your organization. Learn how to implement promotions that contribute to individual and organizational well-being.

Written by
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Dr. Amy Marschall
Spring Health Provider
Clinically reviewed by
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    When a position opens up within an organization, the hiring manager has a choice to make. They can either hire a new employee or promote from within. 

    While hiring externally provides access to a pool of new talent, promoting current employees can cultivate loyalty, increase motivation, and ignite morale within the workplace.

    Keep reading to discover more of the many benefits of filling an available role with a promotion, along with common pitfalls to avoid and strategies for successful implementation.

    Why are employee promotions important?

    A promotion signifies a shift in responsibilities within the same organization, accompanied by advantages such as an increased salary, enhanced flexibility, additional benefits, and broader duties. Those elevated to a new position often prove to be an excellent fit, having already gained an intimate understanding of the organization’s values, culture, and obligations.

    When an organization prioritizes internal promotions, it conveys its commitment to nurturing existing talent and appreciating hard work. This approach can increase motivation and instill a sense of loyalty to the organization.

    What are the different types of employee promotions?

    There are many ways to promote employees. Each one should be aligned with the employee’s career goals and individual strengths, and the organization’s requirements. 

    It’s important to note that there isn’t a universally “best” type of promotion. The optimal choice varies according to the specific employee.

    Engaging in open communication with your team members can make them feel more comfortable with sharing their goals and ambitions, and allow you to tailor promotions based on their needs. When a new role opens up, you can invite existing employees to apply to gauge interest in the promotion opportunity.

    Internal promotions

    An internal promotion refers to the appointment of an employee to a new position within the same organization, typically in recognition of their past achievements. This occurs when an organization has a vacancy and extends the job offer to a current employee who holds a lower-level position.

    An internal promotion conveys to employees that their consistent efforts have been acknowledged and they have demonstrated mastery of skills and growth over time. It signals their readiness to embark on the next phase of their career journey.

    Horizontal promotions

    A horizontal promotion occurs when an individual transitions to a different role at the same hierarchical level. Depending on the company, horizontal promotions are also sometimes referred to as internal transfers. Managers often arrange these promotions to allow employees to develop new skills related to their jobs. 

    Although horizontal promotions may not encompass additional responsibilities, providing a salary raise or added benefits is a tangible acknowledgment of an employee’s dedication and exceptional performance.

    Vertical promotions

    A vertical promotion transpires when an employee advances to a higher level within the organization. This advancement signifies the employee’s proven readiness and capability to undertake a new role. 

    Vertical promotions involve increased responsibilities, greater authority, and an enhanced compensation package, differing from situations where roles change within the same level.

    What are the benefits of promoting employees?

    Promotions are a meaningful way to acknowledge exceptional achievers and communicate appreciation for their dedicated efforts. Furthermore, they yield distinct advantages that extend to the entire organization.

    Enhanced job satisfaction

    Employees who earn promotions will likely feel more satisfied as their contributions are recognized and appropriately rewarded. This recognition of their career advancement fosters content and plays a pivotal role in cultivating a positive workplace culture.

    Increased motivation

    When employees know their dedication could lead to promotions, they’re often motivated to exert greater effort, refine their skills, and achieve superior outcomes. 

    Striving for excellence becomes more meaningful when there’s an assurance that hard work will be acknowledged and rewarded. Employers who embrace promotions as a form of recognition for exemplary performance attract and retain motivated, dynamic employees.

    Improved mental health

    Individuals with high job satisfaction tend to experience lower stress in their professional and personal lives. Given the substantial portion of our waking hours at work, experiencing motivation and job satisfaction positively impacts our mental well-being. 

    Additionally, when hard work leads to promotions, it instills a sense of accomplishment and happiness.

    Strengthened loyalty

    When employers maintain openness and transparency regarding expectations and promote employees who meet these communicated benchmarks, it nurtures a sense of loyalty among the workforce. 

    Workers who know their boss will reward their efforts will be more loyal to the organization, thereby improving retention rates.

    Common pitfalls to avoid when promoting employees

    The concept seems straightforward: provide employees with promotions to cultivate loyalty and facilitate personal and organizational advancement. However, promotions encompass more than discussing new titles and salary increases. There are pitfalls to avoid when promoting employees, as several common mistakes often arise.


    The inclination to offer promotions to favored employees might happen as a manager. Nonetheless, it’s crucial to ensure that morale-boosting promotions are rooted in merit, and objective factors like productivity and project outcomes, rather than being influenced by the manager’s personal preferences.

    Overlooking skill fit

    Every job requires specific skills, and every employee possesses unique strengths. When issuing promotions, it’s important to consider the individual receiving the role change and the nature of the position being filled. 

    Does the role align with their strengths? If not, there’s a risk of setting them up for potential failure or dissatisfaction, as they might struggle to perform well or feel ill-suited for the job.

    Promoting employees who prefer their current role

    Our society often emphasizes the constant pursuit of the next advancement or growth opportunity. While aiming for career progression is valid, not everyone desires promotion. Some employees find satisfaction in their current roles and don’t wish to advance.

    Open dialogue with your employees about their aspirations is crucial. For those who prefer not to pursue promotions, explore alternative avenues to recognize and reinforce their excellent performance in alignment with their preferences.

    Inadequate communication

    It can be frustrating to seek a promotion and not get it. Often, leadership fails to provide clear and precise communication regarding the criteria for earning promotions. 

    To mitigate this, prioritize transparent communication and encourage employees to seek clarification by asking questions. This empowers them to gain an understanding of the expectations set for promotion eligibility.

    Unrealistic expectations

    Although promotions frequently entail increased responsibilities and productivity demands, it’s important to recognize that an employee remains an individual. Burdening them with an extensive workload can lead to burnout or resentment.

    Regularly assessing the employee’s workload and stress levels can prove beneficial. This practice ensures they don’t experience overwhelming pressures and provides an opportunity to offer support and adjustments when needed.

    Inadequate compensation

    Promotions encompass two essential aspects: changes in responsibilities and compensation. In organizational shifts, employees might be tasked with shouldering extra duties and assuming additional roles, yet not receive equivalent salary compensation or benefits.

    Policies that introduce increased responsibilities without compensation can have a counterproductive impact. Instead of fostering a culture of appreciation for hard work, such practices can demotivate employees, creating a situation where going above and beyond results in an influx of responsibilities without adequate recognition.

    Successful strategies for employee promotions

    Having delved into the advantages of promoting employees and understanding the missteps to avoid, we can now focus on effective strategies for establishing successful promotion policies. By following these strategies, managers can ensure well-executed promotion practices that yield positive outcomes in the workplace.

    • Establish clear criteria: Clearly communicate the promotion criteria to employees, specifying performance expectations and the timeline. This transparency prevents frustration and encourages open dialogue between team members and their managers.
    • Give regular feedback: Offer clear and consistent feedback to employees, promoting their development and keeping promotion criteria the focus. This practice fosters ongoing growth and ensures alignment with promotion goals.
    • Listen to employees: Collect feedback on employee preferences and goals to tailor promotions accordingly. This approach ensures alignment with individual strengths and signals a commitment to a positive work environment through attentive decision-making.
    • Foster skill development: Prepare employees for promotion through tailored skill development. Provide training and collaborate to identify skills that align with their goals and strengths.
    • Promote work-life balance: As responsibilities increase after promotions, ensure a healthy work-life balance to prevent burnout. Continuously check in with employees about workload to support this balance.
    • Offer mental health support: Show that you value employee well-being by offering mental health support and benefits. This commitment enhances employee well-being and cultivates positive mental health before, during, and after a promotion.     

    Elevate your organization through strategic employee promotions

    Promotions are a powerful means to acknowledge exceptional employee contributions and commend improved skills or output. Yet, precise execution is crucial for their effectiveness.

    By adhering to these steps and strategies—and avoiding common pitfalls—you can grant promotions that bolster employee satisfaction, motivation, and loyalty. This satisfaction translates into enhanced productivity, a better work environment, and heightened workplace performance.

    Learn how to cultivate a motivated and engaged workforce by understanding the nuances between recognition and rewards.

    About the Author
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    Dr. Amy Marschall
    Spring Health Provider

    Dr. Amy Marschall is a clinical psychologist licensed in South Dakota, Montana, New York, North Dakota, and Florida. She got her doctorate from the University of Hartford in 2015 and completed her internship at the Psychology Training Consortium, Central Region. She has a full-time clinical private practice, Resiliency Mental Health, where she provides therapy and psychological assessments. She is also a speaker, educator, and author.

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