Managing promotions effectively is one of the most powerful ways leaders can drive their company’s success. We surveyed over 400,000 U.S. workers in the past year and found that when people believe promotions are managed effectively, they’re more than twice as likely to give extra effort at work and to plan a long-term future with their company. They are also five times as likely to believe leaders act with integrity — a key underpinning of the high-trust, high-performing companies we’ve studied for the past three decades as part of the FORTUNE 100 Best Companies to Work For ranking.
The payoff is impressive: at these companies, stock returns are nearly three times the market average, voluntary turnover is half that of industry peers, and metrics for innovation, productivity, and growth consistently outperform competitors.
However, even these companies struggle when it comes to managing promotions. Among the 100 Best Companies, 75% of employees believe promotions go to those who best deserve them. That may sound high, but it ranks as the third-lowest of all 58 items we assess.
Why, even in the best workplaces, do promotions pose such a challenge?
Promotions are highly personal. At their core, they are both relationship-driven and among the most important indicators of how well leaders’ actions align to the company’s stated values. A solid promotions process allows leaders to elevate each employee to their full potential — while showing the company what type of results and behaviors are valued. However, if promotions aren’t managed well, one person’s success can foster feelings of resentment in others, and the career aspirations of employees across the company can be left unrealized.
Leaders can improve the effectiveness of their promotions process by re-focusing their energy on the people the process is meant to support, at every stage of the process:
Before the promotion: clarify aspirations. Setting the stage for effective promotions starts with defining each team member’s long-term aspirations, so you both know how they will contribute as the business grows — and how you can best support them.
Consider a senior call center leader from one of our large technology clients. When she came on as the team’s leader, she held meetings with each employee to understand their current role and performance, their interests and ambitions, and gaps.
When a customer support employee expressed his desire to work in IT, she made him her “go to” person for all A/V needs in the call center. When senior leaders would come in to present to the group, she would introduce him, highlight his IT certifications, and invite him to set up their equipment. After months of advocating for this employee (as she did with all her team members) she received a call from the IT leader saying a support role had opened up on his team. To everyone’s delight, the call center employee was able to fill the spot.
This call center leader developed more high-performing leaders than any of her peers in the organization. That was not an accident; she was clear about her team’s aspirations, and supported each of them in realizing their advancement goals. What’s more, when her people were promoted, the full team celebrated — rather than questioning the promotion. After 14 months of her leadership, her center rose from being one of the lowest-performing groups to the highest performing of all.
When a new job posting comes out: encourage and advocate. A common complaint employees have about their company’s promotions practice is a sense that by the time the job is posted, “the fix is already in.” Regardless of how transparent the opportunity is, they believe there is already a preferred candidate who will get the position. This lack of faith in the system dissuades people from applying, even when they are interested and qualified.
When a new position is posted, even if you’re in lock step with your team on their career aspirations, don’t assume the people you expect to raise their hands will do so. Place the burden on yourself to encourage, advocate, and coach people to raise their hand. Let those you hope will apply know: “I want to see you raise your hand for this. Even if you don’t feel you’re ready, it will give you practice in understanding what’s required for the next step in your career.”
No tool or system can address a fundamental lack of trust in the promotions process. What will shift this type of mindset is a leader who reaches out when opportunities arise.
Once the decision is made: generate buy-in. Everyone is curious to learn the “who” component of a promotion decision. However, the opportunity to fully engage people lies in explaining why the decision was made. Rather than rehash criteria from the job description, share inspiring stories and examples of how the individual consistently met the criteria, and also, how their promotion benefits the broader team.
To illustrate this last point, we can look to a midsize biotech client of ours. A business leader there recently shared with me his frustration around competition for promotions within his team. There were not enough senior-level seats opening up, and he was losing team members to C-level positions in smaller companies. “Every time I promote one person, I disappoint 10 others,” he lamented.
His colleague, who led the company’s research division, said he too was challenged in this way. To address the dynamic, he partners with his leaders as a group to discuss how the organization’s growth goals will create opportunities for each team member to grow and advance over time.
“As long as my team knows I want them to go as far as they can, and understand how we can all contribute in a way that makes their ambitions a reality, they feel a sense of shared ownership in any promotion that happens,” he said.
He went on to share how he routinely anchors promotions announcements with recognition of people on the team who strengthened the business’ ability invest in a new role. That way, it isn’t about just celebrating the selected individual, but also all those who made the promotion opportunity possible.
There will always be some level of disappointment among those not chosen for a desired opportunity. But the next best thing to personally winning is being a valued member of a winning team, and nearly everyone can get behind that.
Post-announcement: re-calibrate. After the announcement has been made, circle back with those who didn’t get the job (or didn’t even apply for it) to re-calibrate. Was the issue a matter of readiness (“not now”), aspiration (“not this”) or an issue with the company overall (“not here”)?
In all cases, your support at this juncture is critical to that person’s future success. For those in the “not now” camp, work together to secure the development and training they need for the next time a similar opportunity comes up. For those who say “not this,” you can help navigate the organization from a cross-functional and strategic investment standpoint to see what other opportunities are better-aligned to their career aspirations.
For those who are having doubts about the company long term, this may signal they’re not interested or feeling supported to advance over time. If you believe the employee is a good fit for the organization, it’s worth investing the time to understand the situation so you can determine how to support them.
By systematically empowering leaders at every level to use these principles within their teams, results will be remarkable as more people across the company re-connect with their aspirations, feel a sense of sponsorship, extend trust to leaders when promotions decisions are made, and get excited about what’s possible as a valued member of a winning team.
Promotions are about people. When leaders take a caring and coaching-oriented approach, every promotion can feel like a shared win.