How to Correctly Demote an Employee

How to Manage Employees

Demotions historically have been considered drastic measures. Research, however, suggests they're on the rise, author Jared Lindzon reports in an article for Fast Company.

"According to a ... study by staffing firm OfficeTeam, 14 percent of workers have been asked to take a lower role, and 46 percent of HR managers witnessed a demotion at their organization," Lindzon says. "Of those HR professionals that had witnessed a demotion, 39 percent said it was a result of poor performance, and 38 percent indicated that the employee was not succeeding in a new role after being promoted. Another 16 percent said the demotion was a result of organizational restructuring, while 6 percent of demotions were voluntary."

If you're considering demoting one of your employees, you should know there's a right way and a wrong way to do it. The wrong way, Lindzon says, is to use demotions as an alternative to developing or dismissing employees.

Retired management professor Todd Dewett is "concerned with the 39 percent that the study found to be a result of poor performance," Lindzon reports. "Those are people who should be coached, developed, improved or let go," Dewett told Lindzon. "You don't take someone who is a problem and demote them and expect great behavior."

So what's the right way to demote someone? With a plan, Lindzon says. "If a demotion is accompanied by mentorship and training, clear expectations and a path toward future advancement, the employee should ultimately feel like they still have a future at that organization," he advises, explaining that employees who are demoted with a plan for their way forward in the organization might ultimately end up in a better place. "Difficult as it may be in the moment, … demotions provide a 'sink-or-swim' opportunity, and those that rise to the occasion could ultimately succeed in ways that wouldn't be possible if they continued to struggle in their previous role."

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