The global job market is constantly evolving, with new trends emerging from time to time. From mass layoffs to shift shock, moonlighting, quiet retirements, mass retirements, the list is now long.
As performance appraisal season is coming to an end for most companies, a new appraisal trend called “dry promotion” is becoming the talk of the corporate world. Also known as a “promotion without a raise,” this cost-cutting strategy involves a promotion in which an employee is awarded a higher position with more responsibility within the company, but without an accompanying salary increase or raise.
Although most employees are reluctant to accept a promotion, this not-so-new recognition trend has become more prevalent in recent years, with employers allocating more of their 2024 salary budget to promotion-related raises compared to the previous year. It has become less. Per Mercer.
The impact of dry promotions on the workforce and workplace culture
“A promotion without a raise is not a promotion. It is a demotion because it requires more work with more responsibility without getting paid. If so, it’s time to look for a new job,” a Reddit user said in a thread titled “Promotions but no pay increases.”
While discussing dry promotions, PR executive Kriti Sachdev shared her thoughts. “While I understand the appeal of this cost-cutting strategy for businesses, I strongly believe that this is a short-sighted effort that will ultimately backfire.” They need to feel satisfied with their work and adequately compensated for their contributions. Taking on more responsibility without a pay increase will likely lead to dissatisfaction and resentment.”
A new role may initially be perceived as recognition for your hard work, but without financial rewards, it can quickly become overwhelming, especially when the increased workload begins to outweigh the benefits of the new role. can lead to disillusionment.
“Once the initial energy is spent, a lack of financial awareness can lead to decreased motivation, hindered well-being, chronic stress and burnout, and a feeling of being undervalued. As a result, they begin to question their own worth and the organization’s commitment to fair practices,” says Piyali Maity, Counseling Psychologist and Clinical Director of Counseling Practice at 1to1 Help. told indianexpress.com.
As revealed by Nectar, all of this ultimately leads to higher turnover rates, with 33.63 percent of employees starting to look for a new job due to lack of career growth. It’s important to make them feel included. And my motivation increased.
How can leaders deal with the complexities of “dry promotion”?
1. Interviews and anonymous surveys to assess employee sentiment
Sonica Aron, founder of Marching Sheep, says, “In addition to analyzing anonymous employee satisfaction surveys that provide a platform for honest feedback on compensation practices, we conduct on-site interviews with top performers. “This allows you to uncover dissatisfaction with a bland promotion before it escalates and reduces engagement.” This feedback loop allows her to assess employee sentiment, understand the impact of bland promotions on morale and retention, and identify truly exceptional cases where these promotions have tangible benefits for both the employee and the company. The approach can be refined to be limited to specific situations. ”
2. Align employee expectations with business goals
However, Ankush suggested, “Leaders should consider implementing professional development opportunities, such as training and mentorship programs, along with social recognition for increased employee contributions.” Additionally, regular pay reviews that take past performance into account, such as dry promotions, clear promotion criteria, and soliciting employee feedback, help leaders continually evaluate and adjust their practices to meet both goals. Helpful. ”
3. Communicate with sensitivity and transparency:
“To reduce negative impact and foster positive uptake, it’s important to be sensitive and address dry promotional communications. Emphasizing other benefits of the role can reduce feelings of unfairness, support an individual’s psychological needs, and strengthen loyalty and commitment to the organization,” Piyali said. .
In essence, dry promotions may be economically necessary in certain circumstances, but must be handled carefully to avoid damaging employee morale and retention. By understanding the implications of these promotions and striving to reward employees through other means, organizations can ensure that they embrace adaptability, transparency, and equity as key principles of successful workforce management and organizational sustainability. The focus should be on sex.
