SEMINAR REPORT ON TRANSFER AND DEMOTION

Submitted By: Melissa Albuquerque

Melwin D’souza

Mervin Sequeira

Michelle Rego

Michelle Pereira

Mita Menezes

(2nd Semester MBA)

Date of Submission: 16^th February 2010

Subject Code: 08MBA25

Group Number: 6

Table of Contents

Sl No.	Topic
1	Transfer Meaning
2	Purpose of Transfer
3	Types of Transfer
4	Reasons of Transfer
5	Benefits and Problems Associated with Transfer
6	Demotion Meaning
7	Need for Demotion Policy
8	Bibliography

TRANSFER - MEANING

Transfer is defined as “a lateral shift causing movement of individuals from one position to another usually without involving any marked change in duties, responsibilities, skills needed or compensation.”

Transfer is also defined as “…the moving of an employee from one job to another. It may involve a promotion, demotion or no change in job status other than moving from one job to another.”

A transfer is a change in job assignment. It may involve a promotion or demotion or no change at all in status and responsibility. A transfer has to be viewed as a change in assignment in which an employee moves from one job to another in the same level of hierarchy, requiring similar skills, involving approximately same level of responsibility, same status and same level of pay. A transfer does not imply any ascending (promotion) or descending (demotion) change in status or responsibility. Thus, promotion is upward reassignment of a job; demotion is a downward reassignment whereas transfer is a latter or horizontal job reassignment.

PURPOSES OF TRANSFER

· To meet the organizational requirements: Organizations may have to transfer employees due to changes in technology, changes in volume of production, production schedule, product line, quality of products, changes in the job pattern caused by change in organization structure, fluctuations in the market conditions like demand fluctuations, introduction of new lines and dropping of existing lines. All these changes demand the shift in job assignments with a view to place the right man on the job.

· To satisfy the employee needs: Employees may need transfers in order to satisfy their desires to work under a friendly superior, in a department where opportunities for advancement are bright, in or near native place or place of interest, doing a job where the work itself is challenging.

· To utilize employees better: An employee may be transferred because management feels that his skills, experience and job knowledge could be put to better use elsewhere.

· To make the employees more versatile: Employees may be rolled over different jobs to expand their capabilities. Job rotation may prepare the employees for more challenging assignments in the future.

· To adjust the workforce: Workforce may be transferred from a plant where there is less work to a plant where there is more work.

· To provide relief: Transfers may be made to give relief to the employees who are overburdened or doing hazardous work for long periods.

· To reduce conflicts: Where employees find it difficult to get along with colleagues in a particular section, department or location – they could be shifted to another place to reduce conflicts.

· To punish employees: Transfers may be affected as disciplinary measures – to shift employees indulging in undesirable activities to remote, far-flung areas.

TYPES OF TRANSFERS

Transfers can be classified into the following types:

i. Production transfer : transfers caused due to changes in production.

ii. Replacement transfer : transfers caused due to initiation or replacement of a long standing employee in the same job.

iii. Rotation transfer : transfers initiated to increase the versatility of employees.

iv. Shift transfer : transfer of an employee from one shift to another.

v. Remedial transfer : transfers initiated to correct the wrong placements.

vi. Penal transfer : transfers initiated as a punishment for indisciplinary action of employees.

Reasons for transfer: Transfers are basically of 3 categories, viz. employee-initiated transfer, company initiated transfer & public initiated transfers.

Employee Initiated Transfer

These transfers are also known as personal transfers. These transfers are primarily in the interest of the employee & according to his convenience & desire. Further, these transfers can be classified into temporary & permanent transfers.

a. Temporary Transfers: The reasons for employee initiated transfers are:

i. Due to ill health or involvement of employees in accidents,

ii. Due to family problems like taking care of old parents and

iii. Due to other adhoc problems like pursuing higher education.

b. Permanent Transfers: There are several reasons for employee initiated permanent transfers. Employees prefer transfers:

i. Due to chronic ill health or permanent disablement caused by accident,

ii. Due to family problems like taking care of domestic affairs in his native place,

iii. With a view to correct his wrong placement. Employee may not be interested with the work, working conditions or environment of his job & hence may require a transfer,

iv. In order to relieve himself from the monotony or boredom caused due to doing the same job for years together,

v. To avoid conflicts his superiors. If most of the employees under the same superior request for a transfer, the situation should be corrected by other means like developing that superior in inter-personal skills etc., rather than transferring the subordinates,

vi. With a view to search for challenging & creative jobs and

vii. With a view to search for a job with opportunities for advancement to a higher level job, opportunities for financial gains etc.

Company Initiated Transfers

Transfers are also at the initiative of the company. They can be classified into temporary and permanent.

a. Temporary Transfers: Reasons for company initiated transfers are:

i. Due to temporary absenteeism of employees,

ii. Due to fluctuations in quality of production & thereby in work load,

iii. Due to short vacations.

b. Permanent Transfers: Reasons for company initiated permanent transfers are:

i. Change in the quality of production, lines of activity, technology, organizational structure.

ii. To improve the versatility of employees,

iii. To improve the employee’s job satisfaction,

iv. To minimize bribe or corruption.

Public Initiated Transfers

Public also initiate the transfers generally through the politicians/government for the following reasons:

i. If an employee’s behavior in the society is against the social norms or if he indulges in any social evils.

ii. If the functioning of an employee is against the public interest.

The major drawback of public initiated transfers is the politicalisation of the issue. Some employees may be transferred frequently because of political victimization & company initiated transfers of some employees may be stopped due to political favouritism. This drawback is more severe in government departments & public sector units.

Reason of Transfer

Organizations resort to transfer with a view to attain the following purposes:

1. To meet the organizational requirements : Organizations may have to resort to transfer of employees due to change in technology, change in volume of production, production schedule, product line, quality of products, change in the job pattern caused by change in organizational structure, fluctuations in the market conditions like demand fluctuations, introduction of new lines and/or dropping of existing lines. All these changes demand shift in job assignments with a view to place the right man in the right job;

2. To satisfy the employees’ needs: Employees do need transfer in order to satisfy their desire to work under a friendly superior, in a department/region where opportunities for advancement are bright, in or near their native place or place of interest, doing a job where the work itself is challenging etc.;

3. To utilize employee’s skill, knowledge etc. where they are more suitable or badly needed;

4. To improve employee’s background by placing him in different jobs of various department, units, regions etc. This develops the employee and enables him to accept any job without any hesitations;

5. To correct inter-personal conflicts;

6. To adjust the workforce of one section/plant in other section /plant during lay-off, closure or adverse business conditions or technological change.

7. To give relief to the employees who are overburdened or doing complicated or risky work for long period.

8. To punish the employees who violate the disciplinary rules.

9. To help the employees whose working hours or place of work is inconvenient to them.

10. To minimize fraud, bribe, etc. which result due to permanent stay and contact of an employee with customers, dealers, suppliers, etc.

BENEFITS OF TRANSFER

1) Transfer benefits both the employees and the organisation.

2) Transfer reduces employees monotony, boredom etc.

3) It increases employee job satisfaction.

4) They improve employees skills, knowledge etc

5) They correct erroneous placement and inter-personal conflicts thus they improve employee morale.

6) They prepare the employee to meet organisation exigencies including fluctuations in business and organisational requirements.

7) They enhance human resource contribution to organisational effectiveness.

PROBLEMS OF TRANSFER

Problems associated with transfer are:

1) Adjustment problem to the employee to the new job, place, environment superiors and colleagues.

2) Transfer from one place to another cause much inconvenience and cost to the employees and his family members relating education of children etc.

3) Transfer from one place to another result in loss of man days.

4) Company initiated transfer result in reduction in employee contribution.

5) Discriminatory transfers affect employee morale, job satisfaction commitment and contribution.

However, this problem can be minimised through formulating systematic transfer principle.

TRANSFER PRINCIPLES:

Organisations should clearly specify their policy regarding transfer otherwise; superiors may transfer their subordinates arbitrary if they do not like them. It causes frustrations among employees. Similarly subordinates may also request for transfer even for petty issues. Most of the people may ask for transfer to risk less and easy jobs and places. As such, organisation may find it difficult to manage the transfer policy. Systematic transfer policy should contain the following items.

1) Specification of circumstances under which an employee will be transferred in the case of company initiated transfer.

2) Specification of a superior who is authorised and responsible to initiate a transfer.

3) Jobs from and to which transfers will be made based on the job specification, description and classification etc.

4) The region or unit of the organisation within which transfers will be administered.

5) Reasons which will be considered for personal transfers, their order priority etc.

6) Reasons for mutual transfer of employees.

7) Specification of basis for transfer like job analysis, merit and length of service.

8) Norms to decide priority when two or more employees request for transfer like priority of reason, seniority.

9) Specification of pay, allowances benefits etc. that are to be allowed to the employee in the new job.

10) Other facilities to be extended to the transferee like special leave during the period of transfer, special allowances for packaging luggage, transportation etc.

Generally line managers administer the transfer and personnel managers assist the line managers in this respect

DEMOTION

Demotion implies the assignment of an employee to a job of lower rank with lower pay. It refers to downward movement of an employee in the organisational hierarchy with lower status and lower salary. Demotion is just the opposite of promotion. It is a downgrading process where the employee suffers considerable emotional and financial loss in the form of lower rank, power and status, lower pay and poor working conditions. It is a serious kind of punishment which is insulting and causes emotional turmoil. Therefore, demotion should be used tactfully and only when it is absolutely necessary.

Need for demotion:

Demotions become necessary due to the following reasons:

1. Adverse Business Conditions: Due to recession and other crisis, an enterprise may have to combine departments and eliminate jobs. Consequently, junior employees may be retrenched and senior employees may be required to accept lower level positions until normalcy is restored.

2. Incompetence: Some of the employees promoted on the basis of seniority and past performance may fail to meet the requirements of higher level jobs. Such employees may be demoted to jobs suitable to their knowledge and skills. Thus, demotion helps to correct errors in promotion.

3. Technological Changes: On account of changes in technology and work methods, some employees may be unable to handle their jobs or adjust to new technology. These employees may have to be demoted.

4. Disciplinary Measure: Demotions may be used as a tool of disciplinary action against erring employees. However, demotions should be used rarely in exceptional cases because it affects job satisfaction and morale of employees. Demotion should not be used as a penalty for poor attendance record, violation of rules of conduct or insubordination because such action produces defensive behaviour without any improvement in behaviour or performance.

DEMOTION POLICY

Demotion may turn employees into mental wrecks. It may have a devastating impact on employees’ morale. It is an extremely painful action, impairing relationships between people permanently. While effecting demotions, therefore a manager should be extremely careful not to place himself on the wrong side of the fence. A systematic policy on demotions should contain the following points:

i. The circumstances under which the employees can be demoted (reduction in operations, serious indiscipline, etc.) should be clearly specified and made known to employees.

ii. The superior who is authorised and responsible to initiate a promotion should be named.

iii. Any alleged violation of established rules and regulations should be competently investigated.

iv. Once violations are proved there should be consistent and equitable application of the policy.

v. The policy should be fair and impartial.

vi. The lines of demotion (from one job to another) should be specified.

vii. In case of demotions caused by adverse economic conditions and technological changes, the basis for demotion (merit or seniority) should be specified.

viii. Clear cut norms for judging merit and seniority should be stated.

ix. Guidelines for determining the seniority of demoted employee and nature of demotion (permanent or temporary) should be formulated.

x. A provision should be made for appeal and review of every demotion.

xi. It should be open rather than a closed policy.

BIBLIOGRAPHY

· RAO, V S P (2005), HUMAN RESOURCE MANAGEMENT, TEXT AND CASES, SECOND EDITION, ANURAG JAIN FOR EXCEL BOOKS, NEW DELHI.

· RAO, P SUBBA (2007), PERSONAL AND HUMAN RESOURCE MANAGEMENT, HIMALAYA PUBISHING HOUSE PVT. LTD, MUMBAI.