What happens if there are no vacancies for promotion in an organization?

In my last posts, I have written about the some issues relating to promotion in organizations. Today, I am going to talk about the problem arising from lack of vacancies for promotion in organizations. How do employees react when they notice that there are no chances of moving up in the hierarchy? Secondly, how should an organization address this problem? These problems are real and many companies are affected by them. This is the case of small and medium sized businesses. Suddenly, these companies discover there are no more vacancies for promotion.

     Small and medium-sized companies generally have limited business operations, offices, and only a small percentage of them are multinationals. As a result of this limitation in size and operation, the number of openings for promotion is generally limited. The openings refered to here implies moving up vertically or horizontally. There is no vertical or horizontal promotion unless the people occupying those positions leave the organization or are fired. 

     The first consequence of this situation is the demotivation of employees who see themselves as not making any career progress. This is because promotion is considered the most important factor that affect career progress and fulfilment. Some employees with more marketable skills immediately leave the organization to go to a place where their career can grow. Consequently, there will be high turnover of employees in those type of organizations.

     Now, what happens to organizations facing this problem? We will try to answer this question in the next post. So, watch out!