When Is a Promotion Better than a Raise?

When Is a Promotion Better than a Raise?

Sara Bean at Workplace Insight passes along a global survey from Korn Ferry finding that 63 percent of employees would rather receive a promotion with no salary increase than a raise without a promotion this year:

One reason for this, the research from Korn Ferry suggests, is that many organizations are not doing an adequate job of creating clear advancement opportunities for professionals. More than half (56 percent) of respondents who did not get a promotion within the last 12 months cited “bottleneck or nowhere to go” as the main reason. Nearly one-fifth (19 percent) said office politics got in their way of moving up the ladder, and while 39 percent said they did receive a promotion within the last year, less than half (45 percent) said they expect to receive a promotion in the coming year. Also, 84 percent said that if they were passed over for a promotion, the No.1 action they would take was to identify the reason and work to improve. The vast majority (88 percent) said that if they wanted a promotion, the No. 1 action they would take would be to have a conversation with their boss and identify growth areas that would enable them to move into the next role.

This finding seems consistent with something we at CEB observed in our study on high-potential strategies last year: HIPO engagement depends more strongly on these employees’ satisfaction with their skill development and career progress than on satisfaction with their compensation. Indeed, failure to provide the right progression opportunities can increase HIPO turnover risk by 15 percent.

(CEB Corporate Leadership Council members can read the full study here.)