There are two well-established bases of employee promotion namely,
Merit as the Basis of Promotion
Merit refers to knowledge, skill, talent, competence, and capability as different from education, training, and past service record.
Merit system makes better deployment of resources at the high level. Merit works as golden handcuff concerning employee turnover. Capable employees are motivated to do their best and add to the organizational effectiveness. Merit system encourages the employees to obtain new knowledge/skill for all round development.
A lot of people have doubts about the management integrity in evaluating merit. Measurement of merit is extremely complicated. The methods of merit measurement are prejudiced. Merit refers to the past accomplishment, however does not signifies potential achievement. For this reason, the intention of promotion might not be served if merit is taken as the one and only decisive factor.
Seniority as a basis of Promotion
Seniority denotes to relative duration of service in the same post and in the same company. The reason is, there is a positive connection between service, talent and the knowledge obtained by the employees. It is based on the convention that the first should be given the first opportunity in all rights.
It is comparatively simple to measure the service and review the seniority. There would be full support from each and every one as there is no scope for nepotism, prejudice, and judgment. It builds a sense of certainty of getting promotion to every employee. Senior employees get a sense of contentment, since these employees are esteemed and their effectiveness cannot be disputed. It diminishes the possibility for complaints and disagreements.
It presumes that the employees learn more fairly with the length of service. In point of fact, employees learn up to certain age and learning skill is retreating over a phase of time. It kills the inquisitiveness to build up, since everyone will be promoted with or with no development. It demotivates the young and more capable employees, which might give rise to higher turnover of young employees. Judging the seniority can as well be complicated in carrying out as tribulations like job seniority, company seniority, earlier experience, etc, pose diverse considerations. Efficiency of organization is expected to be reduced.