Promotion is defined as giving higher position to the employee, which carries high status more responsibilities and higher status. Promotion means advancement of employee in terms of pay and status also improvement in working conditions.

Promotions are used to fill the positions which are more important to fill rather than the present position of employee. It can be filled by external recruitment but employees having eligibility and experience must be appointed for their motivation. Also it will decrease labour turn over as external recruitment costs more. Also increase in salary and status will increase job satisfaction.

When scale of pay is increased without changing job it is called up-gradation and promotion involves changes in job as well as high salary.

When higher position is given without change in salary it is known as Dry Promotion.

All these, Promotion Up-Gradation and Dry Promotion are used by management to increase morale of employee and as giving reward also.

Advantages of promotion:

·          Present employees if promoted can handle the process products and problems easily as they are already connected to organization but new incumbent may take some to adjust him or may not adjust himself at all.

·          The cost of training the insiders for the higher position is nearly nil hence no extra training cost.

·          Employees will give their best as they know that reward of giving good performance is sure.

·          High morale of the employees is achieved.