A ‘dry promotion’ typically refers to a situation where an employee is given more responsibilities, additional challenges, or a change in job title without a corresponding increase in salary or benefits. While it may seem counterintuitive, there are several reasons why employees may appreciate a dry promotion:
“Dry promotions reflect the company’s confidence in an individual, taking into account constraints such as cost or other business limitations,” opines Rajeev Singh, senior HR professional. In such cases, the company demonstrates trust by acknowledging the individual through expanded roles and responsibilities, even if there isn’t necessarily a corresponding salary increase. Therefore, employees, if faced with this situation, should recognise and appreciate the management’s intention.
It also signifies that the employees are valued as an integral part of the company, and their retention is crucial. This can foster a sense of loyalty and commitment to the organisation.
“Dry promotions reflect the company’s confidence in an individual, taking into account constraints such as cost or other business limitations. In such cases, the company demonstrates trust by acknowledging the individual through expanded roles and responsibilities, even if there isn’t necessarily a corresponding salary increase. Therefore, employees, if faced with this situation, should recognise and appreciate the management’s intention.”
Rajeev Singh, senior HR professional
A ‘dry promotion’ situation sometimes arises not due to a formal promotion but because of underlying reasons such as filling in for someone on leave. If the person handling the responsibilities during this period performs exceptionally well and the need to formally fill the position diminishes, it can naturally evolve into an informal arrangement where the individual continues managing the responsibilities effectively over an extended period.
“This added responsibility provides the individual with more visibility among other functions or stakeholders. It potentially accelerates a person’s progression towards larger responsibilities in their career. Hence, it’s important to recognise and appreciate this positive aspect,” opines Pallavi Poddar, CHRO, Fenesta Windows, DCM Shriram.
“While dry promotions are infrequent and often arise under exceptional circumstances, they can sometimes occur for retention purposes or to promptly address arising gaps,” observes Singh. In such cases, companies find it imperative to make these decisions to maintain the credibility of performance, talent and public relations equity.
Employees can also take dry promotions as an opportunity to learn, enhance their profile and develop professionally. “At a junior level, in particular, a dry promotion presents a great opportunity for self-exploration,” believes Manish Majumdar, head-HR, Centum Electronics. He goes on to add, “Employees must consider this as a chance to learn, acknowledge that there is a cost associated with learning, and realise that the organisation is providing this opportunity. Once they prove their competence, remuneration and rewards will follow, as the company will want to retain valuable employees.”
Dry promotions are also a way for companies to evaluate the individual’s performance in that capacity before making definitive compensation decisions. “Essentially, the company wants to observe how the individual handles the role, and over time, adjustments or corrections may be made. This approach creates a mutually-beneficial situation wherein the individual, who may not have previously held such a significant role, has the opportunity to showcase their capabilities, with the potential for an increase in financial terms commensurate with the elevated position,” points out Singh.
“The expanded scope of work may also lead to an increase in the number of people in the reporting relationship, offering opportunities to develop leadership skills and refine one’s approach to work management.”
Pallavi Poddar, CHRO, Fenesta Windows, DCM Shriram
Moreover, additional responsibilities not only enhance employees’ market value but also contribute to building their personal brand. Additionally, the nature of the role expansion can also influence how effectively one can manage time and tasks, potentially allowing them to achieve more with a more capable and reliable team.
“The expanded scope of work may also lead to an increase in the number of people in the reporting relationship, offering opportunities to develop leadership skills and refine one’s approach to work management,” believes Poddar. The increased scope requires one to navigate through various priorities within the limited timeframe of 24 hours, balancing between critical and less urgent deliverables.
What if this additional responsibility doesn’t work out as expected? In such instances, the employee doesn’t become a burden to the organisation because the compensation remains the same. “When employees haven’t been compensated for the additional responsibility, there is no change in their reward or compensation. This places them in a low-risk or no-risk situation, as the company’s cost of employment is not impacted in case of failure. There’s no need for the company to view the situation as a financial loss and seek a replacement,” enunciates Majumdar.
For instance, if an employee was initially compensated for tasks A, B and C, and now task D has been added, and if the said individual fails to excel at task D, he/she can still receive payment for A, B, and C. This position is a no-risk one. In contrast, when one is compensated for higher responsibilities, employees are obligated to deliver and if they fail, it is a loss to the company.
“At a junior level, in particular, a dry promotion presents a great opportunity for self-exploration. Employees must consider this as a chance to learn, acknowledge that there is a cost associated with learning, and realise that the organisation is providing this opportunity. Once they prove their competence, remuneration and rewards will follow, as the company will want to retain valuable employees.”
Manish Majumdar, head-HR, Centum Electronics
Speaking from his experience, Singh points out, “While it’s crucial for employees to recognise and value the fact that they are being acknowledged for their role, it’s equally important to transparently communicate the reasons behind the dry promotion, outlining expectations and commitments.”
The company should communicate to the employee that, as conditions improve, there is a commitment to align the compensation with the role. This practice is commonplace, where an individual is placed in a role with the understanding that, at a later point, potentially in the near or distant future, the company will ensure that the compensation, including the relevant CTC or salary for the assigned position, is appropriately adjusted.
Agreeing with the same, Poddar also asserts, “It shouldn’t be a one-sided scenario where employees receive a promotion without a clear commitment to future advancements. In essence, both parties need to express their appreciation and engage in open communication to ensure that the dry promotion is not just a gesture but a mutual understanding with a commitment for the future.” In the context of a dry promotion, where there may not be an immediate tangible reward, the manager’s support becomes even more crucial. The manager can articulate the larger vision, explaining how the added responsibilities contribute to the individual’s progress towards higher organisational goals and skill development, or align with the overall development plan.
Majumdar advises, “Companies must outline the expectations and milestones, making it clear that achieving these milestones will result in a subsequent increase in compensation. This mutually agreed-upon plan serves as motivation for both parties— the employee gains a clear career path, and the company retains and nurtures in-house talent at a lower cost than hiring externally.”
1 Comment
Then why call it a promotion, that employee can easily switch company and get a good role with good hike??