THE PRACTICE OF PROMOTION TRANSFER AND DEMOTION

(In case of commercial bank of Ethiopia, Harar branch)

A Research Paper submitted to conduct in partial fulfillment for the

requirement of BA degree in management

Submitted by: Tesfaye lemi

ID No: 2796/08
Advisor: Biniam shawul

HARAMAYA UNIVERSITY

College of Business and Economics

Department of management

Haramaya, Ethiopia

June: 2018
ACKNOWLEDGEMENT
First of all, I would like to thanks my God and St. merry helped me in every activity of my life.

I would like to thanks the manager and employees of CBE Harar branch, specially my gratitude
is goes to NATINAEL MOKONNEN the customer service officer of Harar branch, for facilitates
me in distributing my questionnaire freely in the branch and properly turned back all
questionnaire’s’.

My next gratitude goes to my advisor BINIAM SHAWUL for his unreserved effort of
evaluating, correcting suggestion, genuine guidance and valuable contribution to the successful
completion of paper.

I would like to thanks to my families for their financial support and non-financial support in my
academic life from starting up to completion.

Last, but not least, I would like to thank my friends for the strong moral and material support.

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 TABLE OF CONTENT
CONTENT PAGE

ACKNOWLEDGEMENT................................................................................................................i

TABLE OF CONTENT..................................................................................................................ii

LIST OF TABLES...........................................................................................................................v

ABSTRACT...................................................................................................................................vi

CHAPTER ONE..............................................................................................................................1

INTRODUCTION...........................................................................................................................1

1.1 Background of the study...................................................................................................1

1.2 Background of the organization........................................................................................2

1.3 Statement of the problem..................................................................................................3

1.4 Research Question.............................................................................................................3

1.5 Objective of the study.......................................................................................................4

1.5.1 The general objective.................................................................................................4

1.5.2 Specific objective............................................................................................................4

1.6. Scope of the study.................................................................................................................4

1.7. Significance of the study.......................................................................................................4

1.8. Limitation of the study..........................................................................................................5

1.9 Organization of study.............................................................................................................5

CHAPTER TWO.............................................................................................................................6

REVIEW OF RELATED LITERATURE.......................................................................................6

2.1 Human Resources Movement...........................................................................................6

2.2 Concept of promotion.......................................................................................................6

2.2.1 Open and closed promotional system........................................................................7

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 2.2.2 Promotional Guidelines.............................................................................................8

2.2.3 Purpose of promotion................................................................................................8

2.2.4 Promotion policy.......................................................................................................8

2.2.5. Benefits of effective promotion policy...........................................................................8

2.2.6 Seniority versus - merit/ Ability/...............................................................................9

2.2.7 Difficulties in promotion.........................................................................................10

2.3 Concept of transfer...............................................................................................................10

2.3.1 Type of transfer........................................................................................................11

2.3.2 Purpose of transfer...................................................................................................11

2.3.3 Reasons for employee transfers...............................................................................12

2.3.4 Systematic Transfer policy......................................................................................12

2.3.5 Difficulties in transfer..............................................................................................13

2.4 Concept of demotion.......................................................................................................13

2.4.1 Types of demotion...................................................................................................13

2.4.2 Demotion policy......................................................................................................14

2.4.3 Causes of demotion.....................................................................................................14

2.4.4 Problems caused by demotion.................................................................................15

2.4.5 Making demotion more attractive............................................................................15

CHAPTER THREE.......................................................................................................................16

Methodology..................................................................................................................................16

3.1 Research design................................................................................................................16

3.2 Sampling Technique............................................................................................................16

3.3 sample size...........................................................................................................................16

3.4 Data source and type............................................................................................................16

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 3.5 Data collection.....................................................................................................................17

3.6 Data analysis and presentation.............................................................................................17

CHAPTER FOUR.........................................................................................................................18

DATA ANALYSIS, PRESENTATION AND INTERPRETATION...........................................18

4.1 Introduction;.........................................................................................................................18

4.2 Personal information............................................................................................................18

4.3 Activities of promotion, transfer and demotion...................................................................21

4.4 Opportunity to increase with performance...........................................................................22

4.5 Type of transfer....................................................................................................................23

4.6. Employees demotion...........................................................................................................24

Table 4.6 employee’s demotion.................................................................................................24

4.7 Regarding to follow up and evaluation body.......................................................................26

4.8 policy and performance........................................................................................................28

4.9 Practice of promotion...........................................................................................................30

4.10 practice of demotion...........................................................................................................31

4.10.1 The behavior observed demotion occur in the bank after...........................................31

4.10.2 The importance of demoting employees.....................................................................31

4.10.3 The reason of demotion in the bank............................................................................31

4.11 ANALYSIS FOR INTERVIEW QUESTION...................................................................32

CHAPTER – FIVE........................................................................................................................34

CONCLUSION AND RECOMMENDATIONS..........................................................................34

5.1 Introduction..........................................................................................................................34

5.2 Conclusion...........................................................................................................................34

5.3 Recommendation.................................................................................................................35

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Reference.......................................................................................................................................37

APPENDIX....................................................................................................................................38

LIST OF TABLES.
Table 4.1 Biography of the respondent……………………………………………………..….18
Table 4.2.Back ground and work experience of the respondent……………………………….20
Table 4.3. Regarding of promotion and transfer opportunity…………………………………..21
Table 4.4. Related to opportunities to increase with performance …………………………….22
Table 4.5. Related to type of transfer……………………………………………………………23
Table 4.6. Related to employee’s demotion……………………………………………………24
Table 4.7. Regarding to follow up and evaluation body………………………………………..26
Table 4.8. Regarding as policy & performance of bank…………………………………………28
Table 4.9. Regarding to Practice of promotion………………………………………………….30

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 ABSTRACT
The study was conducted on commercial bank of Ethiopia in harar branch. The main
objective of the study was to assess the practices of promotion, transfer and demotion of
bank. The significance of this study was to take corrective action on the issue of promotion,
demotion and transfer. The study would be based on both primary and secondary data, the
primary data would be collected through open ended and close ended questionnaire’s and
interviews question’’. On the other hand, secondary data would be collected from company
publications, records and books. Data collection would be based on census researcher design
because of the population are limited number and the manageable in order to collect accurate
and reliable information. The data collected through questionnaire and interview would be
processed, analyzed and interpreted through descriptive analysis and would be presented with
tabulation and percentage. Finally, conclusion made and the possible recommendation would
be forwarded.

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 CHAPTER ONE

INTRODUCTION

1.1 Background of the study

Assigning on individual on the task that he or she can exploit his or her skill giving autonomy
feedback and record thorough promotion, transfer and demotion provides on employee increase
performance with their job and make then committed towards the goal of the organization rather
condition is worth for better achievement in organization. It is indispensable consideration of
promotion transfer and demotion and they have own impact on employee’s performance
(Permeaux and etali 1999:596).
An employee utilizes the resource and produce that the organization intends to produce the
contribution of an individual worker to the organization effectiveness really on his or her
commitment to the organization and job involvement which result from the consideration top
level management agreement. Employees promotion transfer and demotion are some of the most
essential practices to human resource management which organization make for different
proposes a promotion is the advancement of an employee’s rank or position in an organization
hierarchy system promotion may be an employee’s reward for good performance. (IBID)
Positive appraisal before a company promotes and an employee to a particular position it insures
that the person is able to handle the added responsibility by screening the employee with
interview and test and given them training or a job experience (Mamoria and Ganker 2008:250)

Promotion is the transfer of an employee to job which pay more money or one that carries some
performed status. A promotion may be defined as an upward advancement of an employee in an
organization to another which commands better pay ways better status. Prestige and higher
opportunities challenges, Responsibilities, and authority, better working environment hour of
work and facilities (Scott and clothier)

On the other hand ,Demotion is the assignment of individual to a job at lower rank and pay
usually involving lower level of difficult and responsibility demotion refers to the lowering down
of the status, salary and responsibilities of an employee it is used as a positive measure when
1
there are serious breaches of duty on the part of an employee when it is often a preliminary to a
dismissal employees is demoted his pride suffer a more sever jolt than it does when he is
superseded by his junior. A transfer is horizontal or lateral movement of an employee from one
job section department shift plant or position to another at the same or another place where his
salary status and responsibility are the same (IBID)

Employment is a contract between two parties, one being the employer and may be defined as “a
person in the service of another under any contract of hire express or implied oral or written,
where the employer has the power or right to control and direct the employee in the material
details of how the work is to be performed (black, 1979: 471)

1.2 Background of the organization

Modern banking in Ethiopia began in 1905, in the same year bank of Abyssinia started its
operation at the time of minilik II and singed contract with the Egypt national bank. During that
period bank of Abyssinia had open various branches in main market centers in Ethiopia, for
instance Diredawa, Desie, Gambella, Gore and other. Bank of Abyssinia consign limited banking
service which as keeping government accounts, some export financing and undertaking various
task for the government. It dates back to the 1942 to the where state bank of Ethiopia holding
both commercial and central banking. Activities were combined in 1963; privately owned bank
was started, and it became a necessary to separate the function of commercial from central bank.
Therefore, in 1963 the central bank of Ethiopia was divided into two. The commercial Bank and
national bank were established. CBE in harar branch was also established in 1963 with total
number of employees were up 20 employees.

Today, more than ever before commercial Bank of Ethiopia has aggressively expanded its
presence in all direction of the country. Remained in the leading the term assets, deposits,
capital, customers base and branch network. Currently, it has more than 1250 branches, spanning
the entire breadth and width of the country. As on June 30th, 2017 the total deposit stood at birr
347billion birr, while total asset and capital of the bank reached 485.7 billion birr and
3300billion respectively

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1.3 Statement of the problem
Employees promotion transfer and demotion are some of the vital human resource management
practice, which organizations make to motivation attract and record the high performing
employees, to fill shortage of employees, correct fault initial placement and punish the low
performs and miss behaving employees such practices help for any organization to properly
maintain and manage the working behavior of the employees. Although, the use of promotion,
transfer and demotion help managers and organization to enhance and maintain the performance
of the employees and correct deviation’s they great impact to the organization if they are not
properly handled. For instance, unfair arbitrary or secret promotion can diminish the effectives of
the process for all concerned so that promotion transfers and demotion is double edge weapon
which can either enhance or hinder the commitment and performance of employees. (Permeaux
and etali 1999).
The bank follows its practices in order to motivations employees who have a good performance
to perform its duties or responsibilities and demotion employees who have not a good
performance.
However, the practices of promotion transfer and demotion in the bank is faced different
problems related clearly setting lack of efficiency, lack of good governance and the presence of
bias. Therefore, in order to improve the organizational employee’s performance intensive study
on transfer, promotion and demotion practices has great importance. This study tried to
investigator the practices of promotion transfer and demotion in commercial bank of Ethiopia
harar branch.

1.4 Research Question

Accordingly, the study would answer the following basic research question
 What are the objective of promotion, transfer and demotion of the bank?
 What look like the present practices of promotion, transfer and demotion in the bank?
 Is there efficient promotion, demotion and transfer in the bank?
 What are bases for promoting demoting and transfer employees?

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1.5 Objective of the study

1.5.1 The general objective

The general objective of the study was to assess the practice of promotion transferring demotion
in commercial bank of Ethiopia in harar branch.

1.5.2 Specific objective.

Specifically, the study would address the following issues.
 To identify the objective of promotion, transfer and demotion of the bank
 To identify the present practice of promotion, transfer and demotion of the bank
 To assess the presence of efficient promotion, demotion and transfer in the bank
 To assess the bases of promoting, demoting and transferring employees in the bank

1.6. Scope of the study

The researcher would be focused on the practices of promotion, demotion and transfer of
employee’s particularly in commercial bank of Ethiopia harar branch. The target population of
the study is limited to commercial bank of Ethiopia harar main branch because of limited budget
and time constraints.

1.7. Significance of the study

The study could be important to the institution or the bank to take corrective action on the issue
of promotion, transfer and demotion in the bank. It could be useful for other researcher as a
source reference for the practice of promotion, demotion and transfer in institution.

The researcher would obtain experience and knowledge of conducting research for this study and
also it help the researcher to develop his theoretical experience

On the other hand the study would help the bank to identify the practice of promotion, demotion
and transfer on motivation of employee and performance and other companies may learn the
practice of promotion, demotion and transfer from the study.

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1.8. Limitation of the study
The researcher was faced many limitations in the process of undertaking this study. Among these
the most significant were Shortage of finance, shortage of time, lack of getting the right
information, lack of cooperation and interest of employee in responding to questionnaire and
filling it carefully and specially Unwillingness of some respondents due to time constraints.

1.9 Organization of study

The study would consider of five chapters. The first chapter covered: - background of the study,
statement of the problem, significance of the study, scope of the study and also objective of the
study. The second chapter would deal with the literature review. The third chapter would
concentrate on methodology of the study. The fourth chapter focused on data presentation,
analysis and interpretation. The last chapter focused on conclusion and recommendation.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Human Resources Movement

The movement of human resources within the organization is important as the recruitment and
selection of people from outside and calls for the same careful planning and use of fair and
systematic procedures. Employee may be re assignment to new position at initiative of at the
organization to fill staff vacancies, to reduce labor costs, or to place workless in job that more
appropriate to their interest and abilities. Employee also seeks reassignment as their interest
and abilities develop through experience (wadell I, French, 2007).

Most supervisors or mangers are responsible for initiating employee reassignment. Because the
human resource department has an overall view of the organization staff in needs and goals,
the department is typically given the authority to coordinate and review plans for internal
staffing changes and to insure that decision comply with company policy in unionized
organization the labor contact spells the rules and procedures governing transfer, promotion
and demotion change to those employees cover by the contact (wadell I, French, 2007).

2.2 Concept of promotion

A promotion is a movement by a person into a position of higher pay and greater

responsibility.
Promotion is reward, competence and ambition. They act as incentives to perform above the
average in one’s present job and to expand one’s abilities, aptitudes and knowledge through
additional training and development (Assefa G, 2005).

It is the advancement of an employee within the organization as to rank, salary, job activities
and/or designation. It can also carry increases in benefits prevent ages, and prestige, although
in some cases the promotion changes title alone. Promotion can be the result of good employee
performance priorities promotion an organization must ascertain whether the employee to be
promoted can manage the increase in responsibilities that accompany the new position or title,
additional training may be necessary. A promotion may involve advancement in designation.
6
 This means that the more senior position is demarked with a different title. An example would
be promotion from office manager to regional manager. In very hierarchical organizations,
such as the military, the change in rank alone is significant and brings with it new
responsibilities. In the nonprofit sector pay increases are modest. So the prestige of promotion
is one of the main benefits. In the private sector, promotion can comprise substantial salary
increase, benefit increase, stock options and various “perks,” such as the use of more appealing
offices and car parking options.

Generally speaking, there are more procedural safeguards against preferential treatment in the
public sector, whereas in the private sector service or managers enjoy broad discretion in their
promotional duties review of promotional decisions and mandates to document such decisions
in personal files protect against discrimination, bias, and preferential treatment. (From
Wikipedia, the free encyclopedia).There are some examples of a promotion like, HR assistant
receives a promotion to HR Generalist ,HR Generalist receives a promotion to a dual role of
HR Generalist and employees’ development coordinator, HR generalist is given a promotion to
HR manager, HR manager is given a promotion to manager of HR and administration, HR
manager is promoted to HR director, HR Director receives a promotion to HR vice president
HR vice president becomes vice president of Global Human resources or vice president of
talent acquisition, management and development.( http://www.authenticily consulting.com)

2.2.1 Open and closed promotional system

A company is said to have an open promotion system where it is willing to consider all
individual within its organization as potential candidate and also takes the trouble to announce
internally such position opening. Where an organization does not announce vacancies or where
the candidates is restricted and is not open for all individuals within the organization for the
promotion openings the company is said to be have a closed promotion system (Pigros and
mayers, 1981).

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2.2.2 Promotional Guidelines

While employee promotions positively affect engagement and motivation, very new organization
(16%) widely communicate their promotional polices for recruitment or employee retention,
according to a 2012 worlds at work survey report. The survey was fielded in August 2012 among
members of world at work; an association of HR/total rewards professionals’ at mostly large
North American companies. “Organization’s consistently under communicated promotional
guidelines and policies to the general employee population”.

2.2.3 Purpose of promotion

According to Assefa G. (2005) Promotion is usually given to put the worker in a position where
he will be of greater value to the organization or where he will be of increased personal
satisfaction income from his/her work and to remove a worker from his job as an alternative to
avoid the embarrassment of firing of demoting him although to recognize an individual’s
performance and reward him for his work so that may have an incentive to forehead and
employees will have little motivation if better jobs are reserved for outsiders, To build up
morale, loyalty and sense of belonging on the part of employees, To promote job satisfaction
among the employees and give them an opportunity for Unbroken, continuous service ,finally To
utilize effective knowledge and skill of employees.

2.2.4 Promotion policy

The promotion policy is to take merit in to consideration, sometimes length of service, education,
previous work history, etc., is factors which are given weigh while deciding on a promotion.
Although promotions are made on the basis of ability, hard work, course out line operation,
merit, honest and versatility, May informal influences are power full determinants (Assefa G.,
2005).

2.2.5. Benefits of effective promotion policy

Benefits of effective promotion policy is to provide incentive to work more effectively as it

given recognition to an employee who had done his job well and It develops employee loyalty by
assuming him promotion within the organization, if found fit, it increases job satisfaction of the
8
employee, it helps to attract efficient employees to the organization and increases the
effectiveness of the organization. (Davar, 1988)

2.2.6 Seniority versus - merit/ Ability/

Seniority refers to length of service in the organization or in its various plants or in its
departments or in a particular position. There is a great difference and the question of whether
promotions should be given on the basis of seniority or ability.

If a promotion is given to qualified individual with a view to creating an incentive for her/ him,
then it should be based on his/her ability. The most widely used basis of promotion combines
both ability and seniority. The best policy would be ensure that whenever there are two
employees equal seniority, ability or merit should be the deciding factor in promotion. Where,
however there are two employees of almost equal competence, seniority should be the decisive
factor such policy would satisfy the management, which prefers ability, and trade unions, which
prefer seniority. (Assefa G. 2005).

Promotion by seniority is preferred by trade unions and most employees because the system is
simple to understand operate and it recognizes the older members need for respect and also it
promotes discipline and morale in the organization for all are assured that promotion will come
when it is due.

On the other hand, the system of promotion by merit brings reward for meritorious work, extra
competence, achievement and imitative and it encourage an employee to work hard so that he
may get an opportunity for advancement in the organization. And it leads to increased
productivity, for individual are satisfied that their merit and competence will be properly
appreciated and rewarded.

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2.2.7 Difficulties in promotion

Promotion the wrong employees is like quitting, smoking it is easy to do, a million times.
Promoting the right person at the right time take more diligence

A promotion is one thing that every employer, strives for and works hard to achieve, although
promotion is a dream for employees, it is no way a right of every employee.

It is the advancement of an employee’s rank or position in an organizational hierarchy system. It

may be an employee’s reward for good performance.

2.3 Concept of transfer

The word transfer comes from two Latin terms, Trans (over or across) and ferre (carry).
Educational experts and physiologists have defined transfer of learning in a number of similar
but subtly different ways” The degree to which a behavior will be repeated in a new situation
“and the broad, productive and supported use of acquired knowledge, skills, and motivations in a
new contexts and learning tasks.” And “the degree to which trainees effectively and continuously
apply what is learned in a training setting to a work setting.”

What is common to all definitions is a focus on the application of knowledge or skills acquired in
one setting to another context. (http://www.albany.edu/igsp/ pdf/ primer-leam%

Transfer is a “lateral shift causing movement of individuals from one position to another usually
without involving marked change in duties, responsibilities, skills needed or compensation”. And
it represents a horizontal or lateral move from our position to another that has similar pay and
responsibility levels, although there may be small differences between the jobs they are relatively
in consequential. Management uses transfers most often to fill temporary vacancies; sometimes
positions are created as a reward to allow a person to intern with or under study another, higher
job.

These “Assistant to” positions help the transferee study the higher job up close and under the
direct tutelage (instruction/ teaching/ of the person who occupies it. Such moves are common

10
when management is preparing to replace a person who is about to move up or out of the
organization. (Assefa G, 2005).

Transfers are also used to staff a new operation department, or division with a top – ranking,
experienced nucleus of competent leaders. These persons will staff the operation over time,
fleshing out the lower positions and in some cases, providing for their own replacements (Assefa
Gebre, 2005).

2.3.1 Type of transfer

 Production transfer: - is made to meet the new need of the company when production is
dealing in a given department. Specially rush order comes through and work for has to
be temporarily increased.
 Remedial transfer – such transfer is made to recertify the wrong selection and
placement of personnel for instance the initial placement of an individual is facility or
he can not adjust on the job, his transfer to a more appropriate job is desirable.
 Shift transfer: This is common types of transfer of employees from one shift to another
on the same types of work. Workers generally dislike a second shift assignment as it
affects their participation in community life.
 Versatility transfer is benefit to both the employee and the company providing a verity
of job experience.
 Replacement transfer: from the view point of purpose replacement transfer are similar
to production transfer as they also try to avoid lay off (Davar, 1988).

2.3.2 Purpose of transfer

Transfer is generally built up a more satisfactory work team and to achieve the purposes, for
satisfying the needs of the organization as may arise out of change in quality of production,
fluctuation in work requirement and change in organizational structure and to increase the
veracity of the employee by shifting his or her from one job to another.

So, they have ample opportunities for gaining a varied and brooder experience of work such
kind of transfer make it possible for an employee to enjoy the facility of job enrichment and

11
 also To adjust the work force of the organization, particularly when one is closely done for
reasons beyond the control of the employee with respect to replace a new employee by an
employee who has been on the organization for insufficiently long time the purpose to give
some relief to an old employee from the heavy pressure of work ,although, it help employees
work awarding to their connivance so for as timing are concerned for example, an employee is
transferred from night shift to mooring or from the first to the, 2 nd shift and, Transfers for
employees transfer are also done, Under which either difficult for trade union activities or
administrative service and the governments.

2.3.3 Reasons for employee transfers

To avoid favoritism and repetitive, to avoid gaining capacity of influencing and egocentrism, to
avoid monetary in the work of an employee and also to make an employee accountable to his
seat so as to not to find mistake by his successor transfer might be implemented. So as to avoid
excess dependency on particular employee, otherwise may affect the purpose of hierarchy and
lose control over subordinates to create transparency among the employees and their work and It
limits taking advantage and sole control over the seat or section or to avoid unnecessary
influence on others for their own advantage to make conversant of different seats work for
maintaining health relationship in between all the staff members to retain harmonious
environment to avoid unnecessary disputes.

2.3.4 Systematic Transfer policy

A systematic transfer policy must be incorporated basically, this should provide for clarifying the
types and circumstance under which transfer will done and It should be know who will be
responsible for imitating and approving the transfer and also It should prescribe whether the
transfer can be made only within a sub or also between a department, division and plants, with
indicate the basis for transfer and point out the rate of payment and also It should provide for
timely communication of transfer decision.(davar,1988)

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 2.3.5 Difficulties in transfer

 Specialist can only go from one such job to another specialists’ job

 Change of adaptation makes a demand concerning efficiency.

 It breaks the continuing of the organization work activities.

So there a lot of planning accessory if their a transfer the department heads should be
encourage that the true men trained sufficiently in advance to step in to other jobs when those
fall vacant. (http;/www.ask.com, April 2014

2.4 Concept of demotion

A demotion is a movement from one position to another that has less pay or responsibility
attached to it. Demotions can be used for punishment, but most organizations refuse it as an
option, performing instead of suspend the employee or assess a financial penalty through the
feature of pay. The reason for this reluctance is that demotion staffs a position with an
embarrassed and often angry worker who is not likely to be productive or any better behave than
she/ he was in the former position (Assefa G., 2005).

Within the continuum of disciplinary options available within most organizations, a demotion
falls in a middle range of severity, minor violations of rules, or the first violation of a rule will
typically result in a verbal or written warning or a suspension without pay. At the other extreme
for severe violation so the rules, such as embezzlement or sabotage an employee will typically be
find and/or the company will file criminal or civil charges.

2.4.1 Types of demotion

The following are the most common types of demotion

 Apposition that is of lower rank and status in the same hierarchy. (E.g. from sales
manager to sales representative).

13
  A similar role to before but with lesser with lesser authority and responsibility and
perhaps a lighter workload (e.g. transfer to a smaller sales territory or management of
smaller or fewer customers/accounts, remuneration may or may not be reduced).
 Temporary demotions, either for asset period or until the employee’s performance
recovers.
 Temporary demotions made on the basis that status will later be restored (e.g. demotions
made to gain work experience and/or sidestep a career path bottleneck).
 For dual career couples, one partner may be promoted and relocated and other agrees to
accept a demotion in order to relocate as well. (http, //www.authentcity consulting.com)

2.4.2 Demotion policy

A fivefold policy in relation to demotion practice has been suggested with a clear and reasonable
list of rules should be framed violation of which would subject an employee to demotion, this
information should be clearly communicated to employee, there should be competent
investigation any alleged violation. If violations are discovered, there should be constant and
equitable application of the penalty preferable by the immediate supervisor and there should be
provision for review. In unionized case, this will be automatic via the grievance procedure, in
anon unionized case the employer will need to make other provisions for review (Assefa G, 2005

2.4.3 Causes of demotion

Demotions may be caused by factors beyond an employee’s control and when departments
free combined and jobs eliminated employees are often required to accept lower level post
until normalcy is restored and in adequacy on the part of employees in terms of job
performance , attitude and capability happen when an individual finds it difficult to meet job
requirement standards , following his/her promotion and when, because of change in
technology, methods and practice, old hands are undoable to adjust or when employee
because of ill health or personal reasons , cannot do their job properly. A demotion should
never be made as a penalty for a violation of the rules of conduct, poor attendance record, or in
subordination; because such action will net improve the performance of the individual only
discipline and training can set the things right (Assefa G,2005).

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 2.4.4 Problems caused by demotion

Apart from the legal issues that may arise, there are a number of potential problems that
demotion can cause if it is not handled appropriately.

The new job may suit the employee, creation a “round peg in square hole” situation sometimes,
expedient decisions are made and the employee is demoted to a job that happens to be available
but may be suitable and it may not fix whatever the previous problem was. You need to clearly
identify the underlying causes that led to the decision to demote. If poor performance was due to
skills/knowledge shortcomings that training cannot fix, a lower level job may be a job, As well
as the morale of the demoted employee, the morale of co-workers may also be affected (who’s
next?). The reasons for a demotion must be clear to both the affected employee and the co-
workers and you need to be consistent with how you handle poor performing employees.
Otherwise this will damage morale. Yet individual problems require individual solutions, and
demotion is not always the best solution. You still have to find a competent person to fill the
employee’s previous position. If the employee’s new position is lower paid it may adversely
affect his/her financial position and security recommended practices are to provide the employee
with financial counseling if required, and possibly to either reduce pay gradually or freeze it until
it reaches the correct level for the job. Even where an employee voluntarily applies for a
demotion, the offer of financial counseling should still be made, to ensure he/she can cope with
loath a lower income. If the organizations culture is highly status- driven, demotions are likely to
be harder from players to cope with than if the culture supports learning and new experiences.
(http,//www.albany.edu)

2.4.5 Making demotion more attractive

Implementing demotions will be more successful if the organization couture culture is

supportive. In the sense that there is no stigma attached to demotion. This requires the
organization to have earned a reputation for looking after its employees, and also to plan the
demotion process carefully.(http,//www.albany.com)

15
 CHAPTER THREE

Methodology

3.1 Research design

In this study descriptive method of research design would be used because the nature of the study
which requires describing the practice of promotion, demotion and transfer towards the
commercial bank of Ethiopia harar branch.

3.2 Sampling Technique

Researcher would be used census research sampling technique rather than stratified, random, on
random sampling technique because the total number of population in the organization is limited
or relatively small. The total number of employee of commercial bank of Ethiopia harar branch
is 63. So it was possible to conduct all respondents together a data by using open ended and close
ended questionnaire.

3.3 sample size

The total population of the organization was 63 so, the researcher would be take all of them as
sample size because of the worker was small size.

3.4 Data source and type

Both primary and secondary data would be used in the study. Primary data would be collected
from questionnaires. The data source would be used to provide important & reliable data about
human resource movement & its impact on employees’ performance. A questionnaire was
distributed to employee about job related with promotion, demotion &transfer by using close
ended and open ended question and interview question to manager.
Secondary data would be collected from published materials like books, bank manuals, and
special issued bank magazine different essential materials.

16
3.5 Data collection
The researcher would be used different data collection instruments like open ended, close ended
questionnaires and interview question. The open ended question was to give an understanding of
people on certain issues.

3.6 Data analysis and presentation

Both quantitative and qualitative analysis would be used in this study as part in the quantitative
analysis data was presenting in tables with frequencies and percentage. Qualitative analysis
based on documents and books also incorporated in the study.

17
 CHAPTER FOUR

DATA ANALYSIS, PRESENTATION AND INTERPRETATION

4.1 Introduction;
This study was carried out on the practice of promotion, demotion and transfer in case of
commercial bank of Ethiopia Harar branch. The sources of the data were both primary and
secondary sources. To made data analysis and presentation, respondents were given both ‘’yes’’
and ‘’no’ ’closed ended questions and open ended questions. This chapter presents the responses
of the respondents collected through questionnaires. The questionaries’ were distributed for
commercial bank of Ethiopia Harar main branch employees of 63, from this 40 of them were
returned properly and the rest 23 were not returned back. Therefore, the data analysis is given in
subsequent section of this chapter.

4.2 Personal information

Table 4.1. Biography of the respondents

No Item Respondents
No Percent
1 Sex
Male 23 57.5%
Female 17 42.5%
Total 40 100%
2 Age
18-25 11 27.5%
26-33 12 30%
34-41 14 35%
42-49 3 7.5%
Above 49 - -
Total 40 100%
Source Questioners (2018)

18
As shown in the above table, 57.5% were male respondents and most of the respondents were
male respondents when it compared to females, why because most of the employees in
commercial bank of Ethiopia Harar branch were males.

Regarding age 27.5% of the respondents were range between 18-25 years and the other 30% of
the respondents were the range between 26 -33, years and the 35 % of the respondents were
range between 34-41 years and the rest7.5% of the respondents were range between 42-49, there
was no any respondents in the year of above 49. The majority of employees of the CBE harar
branch were existed between the age of 34-41.

19
 Table 4.2 back ground and work experience of the respondent

No Item Respondents

Number %

1. Educational Background

10+2 - -

Diploma - -

Degree holder 33 82.5%

Master 7 17.5%

Above master - -

Total 40 100%

2. Work experience

0-3 years 10 25%

4-6 years 20 50%

7-10 years 7 17.5%

Above 10 years 3 7.5%

Total 40 100%

Source questionnaire (2018)

Table 4.1 shows the general characteristics of the respondent in educational level and work
experience. The respondent answer indicates, above half of the respondents 82.5 % are degree
holders, 17.5% are masters, and there was no any respondent responded diploma and above
master.
20
As the respose of the employees indicated most of employees of CBE harar branch were degree
holders.

The respondents answered to work experience indicate the most of the commercial bank of
Ethiopia employees has 4-6 years of experience which is 50% the rest of the employees in
commercial bank 25% have 0-3 years, 17.5 have 7-10 years and 7.5% of the respondents were
above 10 years of work experience. The working experience of more employees of the banks
were the range between 4-6 years

4.3 Activities of promotion, transfer and demotion

Table 4.3 regarding to promotion and transfer opportunity

No Item Respondents

Number %

3 Have you ever get the opportunity of promotion/

transfer in the bank?

Yes 26 65%

No 14 35%

Total 40 100%

4 If your answer for question No 3 is yes on what

basis?

Seniority 20 76.9%

Merit 4 15.3%

Invitation from the administration 2 7.6%

Other _ _

Total 26 100

21
Source questionnaires (2018)

Based on the table 4.2 information above half of the respondents (65%) gets an opportunity of
promote or transfer. But 35% of the respondents didn’t get opportunity of promotion or transfer.

Answer for bases of promotion and transfer. Indicates that 76.9% of the respondents get
opportunity in seniority, 15.3% of the respondents are by merit, and 7.6% of respondent are by
invasion from the administration and there is no respondents is by other reasons.

It implies the promotion give for employees by seniority has a better effect on employee’s
satisfaction. Long time he/she requires some promotion and transfer.

4.4 Opportunity to increase with performance

Table 4.4 opportunity to increase with performance

No Item Respondents

Number %

5 If your answer for question no “3”

is yes , could the opportunity help
you to increase your performance

A, yes 21 80.7%

B, no 5 19.3%

Total 26 100%

Source: questionnaire (2018)

From the table 4.4 we can observe that 80.7% respondents answer the opportunity to increase
performance. The rest 19.3% or the respondents are not increase the performance.

From the question the answer indicates the existence of the opportunity of promotion and
transfer help the employees to use their best effort to their work related with the need of
achieving the staged objectives by commercial bank of Ethiopia.

22
4.5 Type of transfer
Table.4.5 types of transfer

No Item Respondent

Number %

7 What is the type of

transfer in your bank?

A production 9 22.5%

B remedial 9 22.5%

C Shift 20 50%

D versatility - -

E replacement 2 5%

Total 40 100

Source questionaries’ (2018)

Sources: 4.5. 50% respondents respond our organization is followed shift types of transfer,
22.5% of them answered production types of transfer, 22.5% of respondents responded remedial
types of transfer and 5% of respondents respond replacement transfer, in these institutions there
is no respondent responds versatility type of transfer. According to the response of the
employees the banks are followed shift types of transfer.

23
4.6. Employees demotion

Table 4.6 employee’s demotion

No Respondents

Item Number %

9 Has employee ever been demoted in

your bank?

Yes 24 60%

No 16 40%

Total 40 100%

10 If your answer for answer question no

“9” yes, what was the reason?

Poor performance 2 8.3%

Misbehavior 19 79.6%

Mismatch with the requirement of the 3 12.5%

job

Other - -

Total 24 100%

Source: questionnaire (2018)

The respondents answer show that more than half of the respondent 60% answered “yes” for the
existence of demotion activity in commercial bank. The remaining 40% of the respondents
answered “no” 79.6% of respondent answered the reason is misbehavior, 8.3% of the respondent
answer the reason is poor performance and 12.5% of respondent responds mismatch with the
requirement of the job.

24
Part of the answer shows that the reason for demotion in the bank is due to discipline, poor
performance or in appropriate behavior such as absenteeism in the work.

Respondents answered organization was demotivated the employees when they show poor
performance and they were not going with the line of the organization goal and objectives so, it
is given a training and performance appraisal measure for them to overcome the problem of poor
performance.

25
4.7 Regarding to follow up and evaluation body
Table 4.7 regarding to follow up and evaluation body

No Item Respondents

Number %

1 The management body

of the bank given their
attention on the issue of
promotion and transfer

strongly agree 16 40%

agree 20 50%

Disagree 2 5%

strongly disagree 2 5%

Total 40 100%

2 The bank has its

responsible person who
is handling employees
promotion and transfer

strongly agree 17 42.5%

Agree 21 52.5%

Disagree 2 5%

Strongly Disagree _ _

Total 40 100%

Source: questionnaires’ (2018)

26
Table 4.7(1) indicates that 55% respondents answered agree for the question, 40% respondent
strongly agree, 5% of respondents disagree for the question and there is no respondent responded
of strongly disagree. The dominants of the respondents replied that the management body of the
bank was given attention on the issue of promotion and transfer.

As table 4.7(2) indicates about a bank responsible person who handle employee’s promotion and
transfer. Most of (52.5%) respondents had responded agree, 42.5% of them are respond strongly
agree, 5% of them are responded disagree, there is no respondents responded of strongly disagree

As majority of respondents replied the bank has its own responsible person who handles
employee’s promotion and transfer.

27
4.8 policy and performance
Table 4.8 regarding as policy and performance of bank

No Respondent

Item Number %

3 Promoting the employees will increase

the bank performance

Strongly agreed 16 40%

Agree 20 50%

Disagree 3 7.5%

Strongly disagree 1 2.5%

Total 40 100%

Do you have complaints and appeals on

current promotion, transfer, and
demotion policies of the bank?

Strongly agree 1 2.5%

Agree 19 47.5%

Disagree 17 42.5%

Strongly disagree 3 7.5%

Total 40 100%

Source questionaries’ (2018)

Table 4.8(3) shows that about promoting employees will increase the bank performance, 50% of
the respondents are responded agree, 40% of the respondents are respondents are responded
strongly agree, and the rest 7.5% of the respondents are responded disagree and 2.5% of the
28
respondents responded strongly disagree. Most of the Respondents responded that promoting
employees will increase the performance of the bank.

As table 4.8 (4) indicates about compliant on the existing policies of promotion demotion &
transfer of bank, 47.5% of respondents answered agreed for the question, 42.5% of the
respondents responded disagree 7.5% respondent responds strongly disagree, and 2.5% of them
responded strongly agree. Therefore, the data shows that there was a limitation of suitableness of
a policy.

29
4.9 Practice of promotion
Table 4.9 practices of promotion

No Respondent

Item Number %

5 The practice of promotion, transfer and

demotion are free from bias.

Strongly agree 1 2.5%

Agree 20 50%

Disagree 18 45%

Strongly disagree 1 2.5%

Total 40 100%

6 The criteria for the bank to promote

transfer and demote and clearly set

Strongly agree 10 25%

Agree 24 60%

Disagree 6 15%

strongly disagree _ _

Total 40 100%

Source questionaries’ (2018)

As table 4.9 (q.n.5) indicates, about the practice of promotion, transfer, demotion is free from
bias. most of the respondent 50% answer shows there is no corruption or bias during the

30
process (agree for the question), 45% of the respondents responded dis agree for the question,
2.5% are strongly agree and 2.5% respondents strongly disagree.

Therefore, most of the respondents replied that there is fairness when the process of promotion,
transfer, and demotion of employees in the bank.

As table 4.9 (6) shows about the criteria for a bank to promote, demote and transfer is clearly set,
most of (60%)the dominant of a responder’s responds is “agree” for the question, 25% of the
respondents responded strongly agree 15% are responds disagree, and there is no respondent
responded strongly disagree.

The majority of respondents responded that there is a clear cut criterion in the bank to transfer,
promote, and demote employees.

4.10 practice of demotion

4.10.1 The behavior observed demotion occur in the bank after

About demoted employee’s behavior in the bank, after demotion occur; they are demoralized and
dissatisfied in the job, demotivated, hopelessness, no moral to do efficient, poorly communicated
with other, carelessness and dishonest behavior observed.

Exceptionally some respondent’s response responded. They should have to be a good banker and
good teller in order to change his/her performance.

4.10.2 The importance of demoting employees

It is one methods of collection or giving warning for having bad behavior employees, correct
action by giving warning, it would be a lesson for other employees; it develops from bad past
experience (mistake) then try to change that behavior.

4.10.3 The reason of demotion in the bank

The reason of demotion in the bank is; misbehavior and poor performance, mismatch with
requirement of the job, bad behavior applied in the bank, lack of bank experience, lack of
customer handling practice.

31
4.11 ANALYSIS FOR INTERVIEW QUESTION
 For Interview question “what is the outcome of promotion, transfer and demotion in your
bank?”

According to the interviews made with manager of commercial bank of Ethiopia, harar branch,
the existence of the promotion, transfer and demotion of employee would have significant role
on organizational performance or effectiveness. Because the employee promotion had make as
the employee satisfied with their job and it create competition among the other employees and
demoting employees are also made the employee as they respect or going on the line of rules and
regulations of banks

 For Interview question “what are the criteria used to promote, transfer and demote
employees?”

According to the response of the manager, the criteria used to make promote transfer and demote
employee is based on the policy and regulation of the organization. The organization is promoted
well performed employees based on their performance or potential and demoted employee that
shows bad behavior and the employee that mismatch with job.

 For Interview question “what is the impact of promotion, transfer and demotion on employee
performance?” As the manager of the bank, responds for this question the promotion and
transfer had no effect on the employee performance and the demotion have the effects on
employee performance because the demoted employee might be have dissatisfied with job.

 For Interview question “what is the previous result in case of promoting, transferring and
demoting employee in your bank?”

As the manager of the bank responded to this question the banks would be promote the employee
who have potential enough based on their performance and seniority or the time length of they
served and the bank was demoted the employee those shows bad behavior and to those have poor
performance.

 For Interview question “what is the believe or attitude of manager toward employee
promotion, transfer and demotion practice?”

32
As the manager of Commercial bank of Ethiopia, harar branch responded for this question. The
manager also replied that giving promotion are being the employees are satisfied with their job
and it helps to increase the productivity of the organization and demoting are also made
employee to improve his\her bad behavior and it teaches other to get in line with the bank rules
and regulation.

33
 CHAPTER – FIVE

CONCLUSION AND RECOMMENDATIONS

5.1 Introduction
Based on the data presented and analyzed above from the responses of the employees through
closed and open ended question conducted with the respective commercial bank of Ethiopia
harar branch employees of the bank, the following conclusion, and recommendation are
forwarded.

5.2 Conclusion
 In the commercial bank of Ethiopia Harar branch more than half of the employees did get
the chance of promotion and transfer. This indicates that the chance of promotion for
employees in the bank has been reserved.

 When every organization has clearly set criteria for deciding any organizational issues;
the employees of the organization are benefited. They can understand how the
organization promotes them.

 The promotion of the employees by seniority has been better satisfaction of majority of
the employees in the bank.

 The effect to make employees use their best performance is satisfactory for almost all of
the employees those who have gotten the opportunity of the promotion.

 On the other hand, demotion activities in this bank indicate the focuses of the bank on
avoiding misbehavior of employees.

 The management of the bank is given relative better attention for promotion and transfer
as most part of the respondent gave response.

 Some employees do not have known how about the regular body responsible for follow
up and evaluation about promotion and transfer. The minority of respondents responded
that the process of transfer and demotion decided by a single person is not correct;
because of it creates bias among employees.

34
  The majority of the commercial bank of Ethiopia Harar branch workers does complain on
the current promotion, transfer and demotion practice. These indicate the presence of
bias, unfairness and lack of suitability of the policy

5.3 Recommendation
As per the investigation the researcher has found out the root cause for the already existing
problems from the research carried out on the practice of promotion, demotion and transfer
practice of commercial bank of Ethiopia Harar branch.

According to the findings/practice, the researcher had been forwarded the following
recommendation to avoid or mitigate these problems. Thus are

 In the organization it is advisable to improve measurement of promotion, even if

seniority satisfied some of the bank workers. Therefore, the management must take
consideration on other measurement. Such as ability to do the new work, present
knowledge related with the new work and interest to workers to the new position etc.

 The banks should take a committee way of deciding decision because of in order to
minimize the level of bias.

 The bank should clearly set the criteria that are used to promote, demote, and transfer of
employees in the organization.

 Though the management is a better position or reason visibility for follow up and
evaluation it should have to create a mechanism of giving full information and
knowledge about were doing and integrated things in the bank.

 Majority of the commercial bank of Ethiopia Harar branch employees have complains on
the current human resource movement practice. So the bank must create a clear path
between the management, supervisions and its employees to enables them express
opinions and suggestion about human resource movement practiced done by the
management.

 The researcher strongly recommend that the bank should give relative better attention for
giving incentive that works well and should apply the policy of promotion policy.
35
 It is advisable to reduce employee’s demotion in the bank by means of giving advice to
demote rather than demoting it fatly.

 The bank gives transfer opportunity only for the basis of environmental condition and
job experiences.

 Therefore, the management must take consideration on punishment basis of transfer for
avoiding excess dependence on particular employee.

Reference

 Assefa Gebre, (2005), teaching and study material on introduction to management,

36
 Gare Dessler (1994), Human resource management, 6thedition eastern Michigan
university

 John stredwick, (2005), introduction to human resource management,2ndedition

 Mamoria and Gankor, (2008), Personal management, 12th edition

 Permeaux and Etali, (1996-596), human resource management, 6th edition.

 Raymound A Noe, John, R Barry Gerhart, Patrick M. (2004), Fundamental of human

resource management,1stedition.

 Rustom S. Davar, (1988), Personnel management and industrial relation, 10th edition
Bombay

 R.wayne Mondy, Robben M. Noe and Shane R. premeanx (1999), human resource
management, 7th edition priutenall

 Wadell 1. French (2007), Human resource management, 6th edition New York, USA

 Warren R. Plunkeet and Raymoas F. Attener (1994), introduction to management, 5th

edition.

 At http;//www.outhenticity consulting.com

 http;//www.ask.com April ,2014

APPENDIX

Haramaya University
College of Business & Economics
Department of Management
37
 Questionnaire
Dear Respondents
The objective of this questionnaire is to gather relevant data to conduct a research on the topic
practice of promotion, transfer and demotion for the fulfillment of BA Degree in Management.
Your participation by giving clear and accurate answer is very important for the realization of the
study. Please be sure that all information provided in questionnaire shall be used for the research
purpose only and treated with at most confidential.
General Direction
There is no need to write your name
Indicate your answer with mark (P )
Use the blank space to give your short answer
Part one; Biography of Respondent
1. Sex male female
2. Age 18-25 34-41
26-33 42-49 Above 50
3. Educational Background
A .10 +2 grades C. Degree Holder
B. diploma D. Master
E. Above master
4. Working Experience in the Organization
A. below 3 years C. 7 – 10 years
B. 4 – 6 years D. Above 10 years

Part two; promotion, demotion and lateral transfer related questions

5. Have you ever get opportunity of promotion or transfer within the bank?
Yes No
6. If your answer for question number “5” is yes on what basis?
Seniority
38
Merit
Invitation from the administration
Other specify _______________________________________________________________
7. If your answer for question number is “5” is yes could the opportunity help you to increase
your performance?
Yes No
8. If your answer for question number “7” is yes in what way?
________________________________________________________________________
________________________________________________________________________
9. What Types of transfer exist in your bank?
A, production C, shift
B, Remedial D, veracity E, replacement
10. Has any employee ever been demoted in your bank?
Yes No
11. If your answer for question number 10 is yes what was the reason?
Poor performance
Misbehavior
Mismatch with the requirement of the job
Other specify ________________________________________________________

No Strongly Agree Disagree Strongly

Agree Disagree

12 The management body of the bank

give their attention to the issue of
promotion an transfer

13 The bank has its responsible person

who is handling employees promote
and transfer

14 Promoting employees will increase

39
 the bank performance

15 Do you have complaints and appeal

on current promotional transfer and
demotion policies of the bank

16 The practices of promotion, transfer

and demotion of above is free from
bias

17 The criteria for a bank to promote,

transfer and demote is clearly set

Part three; Open ended questions

1. What is the importance of demotion in the bank?
............................................................................................................................................................
2. What behavior are observed after demotion is occur?
………………………………………………………………………………………………………
3. what is the reason of demotion in the bank?
………………………………………………………………………………………………………
INTERVIEW QUESTION FOR MANAGER

1. What is the outcome of promotion transfer and demotion in your bank?

2. What is the criteria used to promote transfer and demote employee?

3. What is the impact of promotion transfer and demotion on employee performance?

4. What is the previous result in case of promoting transferring and demoting employee in your bank?

5. What is the believe or attitude of manager toward employee promotion transfer and demotion practice?

40
41
42