Having a fair process for promoting employees pays off

Promoting employees fairly can help boost morale, build trust and lead workers to stay longer at a company.

But a poorly managed promotion process can have a serious negative impact on a company’s overall success, according to key findings recently published in the Harvard Business Review by San Francisco-based Great Place to Work.

When people believe promotions are managed effectively, they’re more than twice as likely to give extra effort at work and to plan a long-term future with their company, according to the article.

“Overall, fair promotions contribute to a more positive, collegial work environment,” says Jessica Rohman, director of content at Great Place to Work, the research partner for Fortune’s annual list of 100 Best Companies to Work For. The findings on promotions came out of Great Place to Work’s research for that ranking.

“When people believe promotions are managed fairly, they’re four times more likely to look forward to coming to work, three times more likely to believe it’s a psychologically and emotionally healthy workplace, three times more likely to believe ‘we are all in this together’ and three times more likely to strongly endorse their workplace to others,” Rohman says.

In contrast, a poorly managed process can lead to poor morale and less trust within the organization, and contribute to a negative perception of the leader who gave the promotion, she says. “They’re not as likely to be seen as trustworthy, and that has negative implications for their success overall.”

A fair promotion process starts with understanding your employees’ long-term aspirations so you know where they’d like their career path to go, and providing the necessary skill development and opportunities they need to get there, Rohman says.

Managers should obtain feedback from employees at least quarterly on their goals and aspirations and how that fits into the organization, says Jerry Siegel, president of JASB Management Inc., a Syosset management training and development firm.

They should ask questions such as “What ideas do you have for making things better in this department?” he says, noting someone who’s proactive and takes initiative would be a good candidate for a promotion.

“All promotions need to be based on merit,” says Siegel, but oftentimes they’re based on longevity.

To be sure, if you’re evaluating employee performance on a regular basis, the criteria for promotion decisions should be coming from those evaluations, says Jennine Leale, CEO of HRPRO Consulting Services, a Rockville Centre HR outsourcing firm.

It validates your decision and gives you something concrete to base the promotions on, she says.

Oftentimes, bad feelings arise when people don’t see or understand what the criteria for a promotion is, Leale says. That’s why management should have clear criteria for determining promotions, she says.

In addition, acknowledging outstanding performance in open forums gives co-workers insight on why someone gets promoted, she says.

For an employee who applies for an internal job opportunity but doesn’t get the promotion, have a candid conversation explaining why the person didn’t get it, says Cornelia Gamlem, president of New Mexico-based Gems Group, a management consultancy.

Explain he or she didn’t have everything needed right now to be successful in the position, but also discuss what the organization can do to help fill in those gaps, she says.

“It’s really important for managers to know their people and understand where their strengths are and what their development needs are,” says Gamlem, co-author of “The Big Book of HR” (Career Press; $21.99).

You can provide development opportunities such as webinars and classes at community colleges without breaking the bank, she says, or “give them some new assignments so they could stretch their capabilities.”