Payless promotion: pros and cons

by on August 19, 2011 · 0 Comment POSTED IN: HR Cafe

If you want to reward a meritorious employee but don’t have the salary budget for a raise, you might consider offering the person a promotion without a pay increase. According to a recent survey by OfficeTeam, 55% of employees would accept such a payless step-up.

Do it for the right reasons
Of course, if an employer offers a title in lieu of cash simply as a ploy, it’s going to backfire. There has to be a benefit for the employee — for example:

  • To give promising but unproven employees a chance to expand their skills
  • To recognize their contribution despite the tough times
  • To better position them for a raise down the road when business conditions improve.

Here are some reasons a company might not want to offer a payless promotion:

  • An employee who’s restless may accept the new title simply as a resume-builder to leverage a job elsewhere. In that case, a new title may actually accelerate the employee’s departure, instead of promoting retention.
  • The employee may happily accept the no-frills promotion at first, but later feel underpaid compared with others who have the same title or responsibility.
  • The employee may not really want the added responsibilities, but accepts the proposal because he or she fears the consequences of refusing. If this is so, you risk creating hard feelings rather than additional motivation.

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