Watch out for Demotions

As an HR Director and now as an HR consultant, I’ve encountered many situations where, instead of a problem employee being let go, he or she is demoted. With rare exceptions, I believe this approach is a mistake.

The demotion decision often arises from a desire to “avoid conflict” and is a misguided belief that a demotion is more humane than a termination. In my experience, you end up with a disgruntled, disengaged employee who continues to cause damage to the organization. The person may accept the demotion out of perceived economic necessity, but don’t expect gratitude from them.

“Love the people who work for you,” said Fortune 50 CEO coach Marshall Goldsmith, the bestselling author of The Earned Life (Currency, 2022). “If not, let them go. Don’t kick them and expect them to be grateful.”

When Demotions Can Be Successful

An example of when a demotion might be a successful is a salesperson who is promoted to sales manager, but isn’t successful in that position. If the person comes to you and says, “hey boss, can I have my old job back?  I’m in over my head.” then the “demotion” (it’s really a reassignment) could work.

I have seen demotions in this situation succeed, when the employee learns the hard way that leadership requires a different skill set than being a great individual contributor.

If problems arise once the worker is in the reassigned position, I strongly advise against repeating the process (“Ugh, that didn’t work. Let’s try this position instead.”). This time, the person really needs to go.

Demotions may be one of the options in the employee relations toolkit, but because it rarely addresses the issue or behavioral problem at hand, it should be used very sparingly, and only when we are sure that it’s in the best interest of the organization.

Conclusion 

Beware the tendency or inclination to demote rather than fire. If the employee has failed in their current position, it’s most likely a good sign that they need to find employment elsewhere. However, if you decide that your circumstances warrant an exception to this general rule, proceed with care and caution.

Thank you for reading!