When & How to Promote Staff

Data recently released from the networking website, LinkedIn.com, suggests that U.S. employers in general tend to advance workers most often during the months of January, June and July. The findings are based on information listed in the profiles of LinkedIn’s more than 90 million members worldwide, between January 1990 and December 2010. Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School, says the data likely reflects times when many companies see business slow down, or their fiscal year comes to an end. That’s when, “A lot of restructuring decisions get made, which creates turnover and openings,” he says. Yet unlike their larger counterparts, small businesses generally don’t need to make such judgment calls at a specific time of year to satisfy stockholders, union leaders or other regulators. They also generally don’t need to do as much reshuffling of their workforces on an annual basis, since their career ladders tend to have fewer rungs, according to The Wall Street Journal.

For the typical small business owner, what’s most important in deciding when to promote an employee is whether the company needs, and can afford to make the investment, says Tim Irwin, an organizational psychologist in Atlanta, and author of, “Derailed: Five Lessons Learned from Catastrophic Failures of Leadership.” Naturally, he adds, it’s also critical to make sure the person in mind is qualified to take on the new responsibilities that a promotion commonly entails. “When promoting star employees to management roles, don’t forget to provide training, something small companies often skimp on,” Dr. Irwin says. “Don’t take your best person and automatically promote them because of that. Either equip them to be a manager or bring someone else in,” to fill a management vacancy.

If an owner can’t afford to promote a top performer into a higher paying position, there are other ways for compensation, says Cappelli, such as offering the opportunity to lead a project or take on new responsibilities. Another option is to inflate the employee’s job title. “People actually like titles,” says Cappelli. “They can show off to their friends.” Jose Costa, owner of branding and marketing agency, Costa IMC, says he offers extra paid time off, if he can’t afford to give someone a pay bump. “You can see their confidence levels go up,” he says. “They feel more in power.” Costa also reminds employees that their odds of landing a promotion hinge on the success of the company. “It serves as a motivator,” he says. “If the company’s doing well, they’re going to be compensated.”