What is the movement of an employee to a lower level of position?

What is Employee Transfer?

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Employee Transfer is the process of horizontal movement of an employee, wherein there is a change in the job, without any changes or revision in the remuneration, pay, and modification of responsibilities. It is a form of internal mobility, in which the employee is shifted from one job to another usually at a different location, department, or unit.

Transfer can either be temporary or permanent depending on the decision of the organization, and it is initiated by any of the two, i.e. employer or employee. Sometimes, it also includes promotion, demotion or even no change in the status and responsibility.

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What are the reasons for Employee Transfer?

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Every organization has a defied criteria for the transfer of employees, and it also varies from individual to individual. The primary reasons for employee transfer are mentioned here:

1. Some positions require distinctive skills, competency, and expertise from the transferred employees.
2. The transfer is also affected when there is a shortage of employees in one department of the organization due to high demand, and there are surplus employees in another department. So, the workers are shifted from one department to another.
3. It is also initiated when there are some clashes between the superior and subordinate or between two workers.
4. To break the monotony of the work, employees are transferred, as the productivity of an employee decreases by doing the same job again and again.
5. An employee may request the human resource department, to transfer him to another location, due to health issues because the climate is not suitable for his/her health.
6. Female employees commonly request a transfer when they get married, and they have to live with their spouses.

The transfer may be requested by the employee himself or by his immediate boss (superior) or by the manager of another department

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What are the types of Employee Transfers?

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1. Production Transfer‍

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Production transfer is usually practised to prevent lay-off that is to say when there is a surplus of the workforce in the factory,  excess workers are laid off. But,  if they are transferred to another factory or plant, where there is a shortage of labour, the massive layoff can be.

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2. Replacement Transfer‍

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This form of transfer also helps in preventing lay-off of senior employees by replacing a junior employee. The organization opts for this transfer when there is a continuous decrease in the operations, and the organization wants to retain an employee who has been serving the organization for a long time.

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3. Versatility Transfer‍

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To make the employees competent and versatile, these transfers are initiated. It is also called job rotation which can be commonly seen in banks where employees working at clerical levels has to work at different profiles.

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4. Shift Transfer‍

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In general, industrial establishments operates on rotational shifts, and the workers usually request a transfer to the shift of their choice.

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5. Remedial Transfer‍

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When the initial placement of an employee is faulty, or the worker is not comfortable with the superior or with the coworkers, or there are some health issues, then these transfers are affected as a remedy to the situation. As the transfer is requested by the employee himself, it is also called s a personal transfer.

There are several benefits of transfers which includes improvement in skills, employee satisfaction, better employer-employee relations, the remedy to faulty placement, etc.

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What are the rules relating to Employee Transfer?

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1. The transfer must be clearly, stated as temporary or permanent.
2. Transfer criteria should be laid down clearly and strictly complied with.
3. The interest of the organization should be kept in mind while framing the transfer policies.
4. The effect of transfer on the salary and other things of the transferred employee must be specified clearly.
5. The frequency of transfer must be known to all the employees along with the minimum period of transfer.
6. The performance of the employee must be evaluated before making the transfer, to a different job or department.

There are some problems associated with the transfers such as employees may not like or fit the new location, or it may decrease productivity, or it may reduce their interest in the job, which leads to employee dissatisfaction.

But, the transfer is a lateral move on the organizational ladder. It involves shifting an employee from one place to another, like one branch or department to another. This does not involve a change in position, job responsibility and remuneration.

Both transfer and promotion are a part of internal mobility within the organization. Companies adopt this procedure to maintain its effectiveness. Also, it aims at utilizing the human resources of the organization in the best manner. In this context, we have discussed the difference between transfer and promotion.

Content: Transfer Vs Promotion

1. Comparison Chart
2. What is Transfer?
   • Conditions
   • Purpose
3. What is Promotion?
   • Characteristics
   • Purpose
   • Basis
4. Key Differences
5. Types
6. Conclusion

Comparison Chart

What is Transfer?

Transfer implies the horizontal movement of an employee within the organization but to a different department, section, shift or branch. But, the position and pay remain the same. It aims at making adjustments in the work, place and employee.

• Temporary Absenteeism
• Shifts in workload
• Vacations
• Vacancies need the special skill of the transferred employee.
• Ill health

Conditions that initiate Transfer Situations

1. Employees may initiate the transfer by requesting it from the management. In this request, the employee seeks his/her preference and benefits. Employee look for transfer for multiple reasons. These reasons are:
   • Greater convenience
   • Work location nearby home
   • Personal Enrichment
   • Working hours flexibility
   • Greater satisfaction and
   • Offering greater advancement possibilities.
2. Organizations can also initiate the transfer as a need to conduct operations in a more effective way. They also use it as a solution to human relations problems. Besides, employers may also look for transfer when an employee is no longer needed. They also do so to identify a better fit for the employee within the firm.

Purpose of Transfer

• Meeting organizational requirements such as a change in production volume, change in technology, market fluctuations, etc.
• Adjusting workforce. That means units with a large workforce can transfer their personnel to the unit with a shortage of workforce.
• Ensuring effective utilization of workforce.
• Penalizing employees
• Approving employee’s request for transfer. Employees may find better opportunities, convenience, interest and saving of time in the transfer. That is why they request it.
• Increasing the productivity of an individual from one job to another often prevents monotony.
• Correcting the wrong initial placement.
• Increasing or decreasing volume of activity.
• Matching the health and age of employees with job requirements.

Also Read: Difference Between Motivation and Morale

What is Promotion?

Promotion refers to the movement of an employee to a higher post in the organizational hierarchy. As the employee holds the new position, he/she may find a hike in salary, higher status and responsibility. Just like a transfer, promotion can also be temporary or permanent, depending upon organizational needs.

It maintains the effectiveness of the organization by boosting employee morale and a positive attitude towards the organization.

Note: Promotion must be fair, and it should be based on the merit of the employees. It is the reward for hard work and performance. For getting a promotion, the employee must meet the necessary qualifications and hiring criteria.

Characteristics of Promotion

1. Recognition of a job performed by the employee.
2. A tool for retaining and rewarding an employee for the completed years of service to the company.
3. It increases individual and organizational effectiveness.
4. It builds loyalty, morale and a sense of belongingness.

Purposes of Promotion

• Recognizing and rewarding the work and efforts of the incumbent.
• Attracting and retaining competent personnel.
• Bringing enthusiasm to employees.
• Developing a competitive spirit in the workforce.
• Encouraging employees to increase their productivity.
• Inculcating a sense of belongingness in employees.
• Boosting morale in the workplace.
• Filling up vacancies from within the organization.
• Increasing job satisfaction

Basis of Promotion

1. Seniority-based Promotion: It is determined as per the relative length of service of the employee in the organization, depending upon the current continuous employment.
2. Merit-based Promotion: It depends on the work performance of an employee considering the requirements of the job.
3. Merit-cum-Seniority based Promotion: It is a basis of promotion in many organizations. Further, the promotion on this basis with differentiating emphasis on merit and seniority is depicted below:

Also Read: Difference Between Reward and Incentive

1. Promotion is the moving up of the employee on the organizational ladder. In this, the employee has to take charge of a position having more responsibilities and duties or requiring more skills. On the other hand, the transfer is a process of shifting employees to those departments or units where they are likely to perform more effectively.
2. Transfer does not result in a change in responsibility, designation, pay or status. As against, promotion results in an increase in rank, responsibility and remuneration.
3. The transfer involves horizontal movement of the employee, i.e. from one department, section, plant or branch to another one.
   As against, promotion involves vertical movement of the employee, i.e. from a lower position to a higher one.
4. While the transfer is a routine administrative matter, promotion is a thoughtful managerial decision.

Types of Transfer

• Production Transfer
  Transfer of employees from one department or plant where there is a surplus of labour to another plant or department having a shortage of labour. These aim at stabilizing employment in the organization. Also, it aims at preventing lay-offs.
• Replacement Transfer
  Just like production transfers, these transfers also intend to prevent lay off, particularly of senior employees. In such a transfer, a senior employee replaces a new one to prevent the lay-off of a senior employee.
• Remedial Transfer
  Transfers occuring as a result of remedy to a situation are remedial transfers. These occur when the primary placement of the employee is faulty. It also occurs when the employee is unable to work cooperatively with supervisors or other co-workers in the same department. Hence, the company transfers him to a suitable job where he could get along well.
• Versatility Transfer
  Such transfers intend to make employees more versatile and competent. This is to ensure that the employee has a broad spectrum of experience in all kinds of work. Also, it facilitates the learning of various skills.
• Shift Transfer
  Industrial establishments or plants operate on shift by shift basis. In these cases, the transfer of employees from one shift to another on the same work takes place. Such transfers occur on a rotational basis.

Types of Promotion

1. Horizontal Promotion:
   It results in increased responsibilities, salary and change in position/designation. But, the employee does not shift the job classification.
2. Vertical Promotion:
   In this, the employee takes charge of a higher level of position in the organizational hierarchy. This involves increased pay, status and responsibilities.
3. Dry Promotion:
   Such a promotion involves an increase in responsibilities and status. But, there is no increase in pay.

Conclusion

All in all, transfer implies a process in which an employee moves from one job to another. In this, there is no change in salary, status and responsibilities. Unlike, promotion is the process of advancement of an employee to a position having higher responsibilities, skills, authorities and duties. Also, it results in better status, pay and perks.