Employee Promotions Not Being Leveraged as Attraction and Retention Tool

Dec 18, 2012, 09:15 ET from WorldatWork

SCOTTSDALE, Ariz., Dec. 18, 2012 /PRNewswire-USNewswire/ -- While employee promotions have an extremely positive effect on employee engagement and motivation, very few (16%) organizations widely communicate the benefit for recruitment or employee retention. This was one of the key findings of a 2012 WorldatWork survey report, "Promotional Guidelines."

"WorldatWork has been studying promotional practices for several years and have found that organizations consistently undercommunicate promotional guidelines and policies to the general employee population," said Kerry Chou, a Certified Compensation Professional (CCP) and practice leader at WorldatWork. "Employers may be missing out on an opportunity to enhance its ability to attract, motivate and retain employees by not sharing general information about the guidelines or processes associated with promotions."

Even though employers choose not to share promotional guidelines with employees, they continue to budget for programs that support employee advancement and promote about 8% of employees in a typical year.

  • The average promotional increase awarded to salaried employees in 2012 was 8.7%, up from 8.3% in 2010.
  • Officers/executives received an average promotional pay increase of 10.2 percent, compared to the average of 9.5% in 2010.
  • The most common method of funding for promotional increases is by establishing a budget separate from other pay-increase budgets.

While promotional practices tend to vary from one organization to another, there are areas of consistency.

  • Most define a promotion by the increase in pay, band, grade or level (81%), and/or the addition of higher-level responsibilities (76%).
  • While most organizations have tenure requirements before the employee is eligible for a promotion, nearly half allow promotions right away.
  • At a majority of organizations (57%), employees are not eligible for promotional increases if they are moving laterally to a new position.
  • Nearly 1 out of 5 organizations award promotions without a pay increase.

Given that most organizations define a promotion as either an increase in grade level and/or the addition of higher responsibilities, Chou advised: "While a bigger title and recognition from peers are nice, employees will usually not feel completely satisfied with a promotion unless there is a meaningful increase in base pay."

About the Study
WorldatWork collected survey data for "Promotional Guidelines" in August. The survey report, based on 873 responses from human resources, compensation and benefits managers, covered additional topics including the impact of promotions on merit increases and variable pay awards, various ways organizations fund promotions, timing and frequency and many others. Where possible, comparisons to findings from the 2010 and 2006 surveys were shown in the report.

About WorldatWork®
The Total Rewards Association

WorldatWork (www.worldatwork.org) is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards — strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 65,000 members and subscribers worldwide; 95 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldatWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C.

WorldatWork Society of Certified Professionals® is the certifying body for six prestigious designations: the Certified Compensation Professional® (CCP®), Certified Benefits Professional® (CBP), Global Remuneration Professional (GRP®), Work-Life Certified Professional® (WLCP®), Certified Sales Compensation Professional (CSCP)™ and Certified Executive Compensation Professional (CECP)™. 

The WorldatWork group of registered marks also includes: Alliance for Work-Life Progress or AWLP, workspan and WorldatWork Journal.

Contact: Marcia G. Rhodes, (480) 304-6885, marcia.rhodes@worldatwork.org

SOURCE WorldatWork