How Do Promotions Work?

The mechanisms governing career advancement are rarely as simple as a linear climb; they represent a complex interplay between organizational policy, managerial discretion, and an employee’s own strategic actions. For many, the fundamental question remains: is a promotion something you wait for, or something you must aggressively pursue? The reality, as evidenced across various organizational types, is that it is frequently a blend of both, often determined by factors that are not explicitly stated in any employee handbook.

# Promotion Types

At its most basic, a promotion signifies that an employer is advancing a deserving employee to a different, often higher, position within the company structure. This advancement typically involves a bundle of changes: a new title, elevated responsibilities, and frequently, an increase in compensation and decision-making authority. However, not all advancements fit this mold, leading to distinct categories that employees encounter.

One common advancement is the Vertical Promotion, the classic step up the corporate ladder, moving from, say, an Analyst to a Manager, which almost always brings increased status and authority. Conversely, an employee might receive a Horizontal Promotion, moving laterally to a different role at the same hierarchical level. While this might not yield immediate, significant pay changes, it offers the chance to master new skills or gain experience in a separate functional area of the business.

More perplexing for employees are the Dry Promotions. This occurs when an individual is given a more senior job title and extra responsibilities, but without any corresponding increase in salary or benefits—at least initially. While this looks good on a resume, the immediate lack of tangible reward can negatively affect morale and productivity if the situation persists.

The method of selection also differentiates promotions. An Open Promotion is announced publicly, allowing any eligible employee to apply and compete transparently. In contrast, a Closed Promotion is not advertised widely; management and HR select a discreet pool of candidates based on their assessment of performance and potential. This contrast—open application versus closed selection—highlights the varying degrees of transparency organizations employ when managing internal mobility.

# Organizational Processes

The actual process of receiving a promotion is highly dependent on the employer’s structure, ranging from rigid formality to casual acknowledgment. In environments like unionized shops or large government agencies, the process is often highly formalized, requiring a formal application, interviews, and adherence to established criteria. For instance, the U.S. Federal Government's General Schedule (GS) system defines a promotion strictly as a continuous change from one GS grade to a higher one, governed by specific pay regulations like the two-step rule.

In smaller companies or less structured environments, promotions can feel much more ad-hoc, sometimes described as a "shoulder tap" from the boss when an opening arises or a need is identified. Advancement can also be the direct result of an employee identifying a gap in the company's operations and presenting a strategic plan to fill it, essentially creating a new role for themselves that they are then promoted into. Furthermore, an employee might initiate a promotion by securing a better offer elsewhere and presenting it to their current manager as a condition for staying—pitting management against each other to secure a better internal package.

For many workers, the reality lies between these extremes. A common approach involves an employee articulating their desire for advancement to their manager, who then outlines specific milestones or projects needed to make the employee eligible for the next level during the annual review cycle.

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# Advancing Readiness

Simply being good at your current job, while a baseline necessity, is often insufficient for moving up. Organizations evaluate employees based on a combination of past performance and future potential.

In more established corporate settings, the criteria for being deemed "good" can be abstract, focusing on core values like "innovation that matters," or they might be tied to specific, measurable criteria defined for each step on a career ladder. Crucially, an employee must first understand how their specific company measures value, as this understanding flavors every performance discussion. If a company values measurable results, boasting about effort alone will not suffice.

A significant challenge arises when the evaluation shifts to potential. Research suggests that men are often promoted based on perceived potential, whereas women frequently need to demonstrate concrete, hard performance results before they are considered for the next step. This discrepancy points to potential bias, where managers look for characteristics associated with leadership in one group based on observation, while requiring documented evidence from another. To counter this, it is advised that employees find out if a formal career track exists, assess how they stack up against the next level's requirements, and then provide clear examples of how they are already operating at that higher level.

# Behind Closed Doors

Large corporations, in particular, rarely promote based on a simple internal declaration of "this person did great work". Instead, promotions are often managed as a numbers game dictated by budget and headcount allocation. A specific number of promotions might be allotted for each level ($0 \to 1$, $1 \to 2$, etc.) and distributed down to department levels.

This centralized distribution often leads to crucial calibration meetings where peer managers convene to discuss and approve candidates for promotion within their shared pool. This dynamic means it is not enough to impress only your direct manager; you must also be known and vouched for by other managers in the decision-making circle. If peer-managers have never heard of your contributions, they may naturally favor supporting their own direct reports. This is why proactive networking and documenting assistance provided to other departments becomes an implicit prerequisite for advancement in these settings.

When employees are operating in a system where the informal criteria—like recognition by senior management—plays a large role, the ambiguity can be a major barrier, especially for those from underrepresented groups. This highlights a common organizational failure: managers neglect to provide clear criteria or specific feedback on what is needed to reach the next tier.

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# Compensation Realities

A common assumption is that a promotion automatically equates to a substantial pay increase, but this is often not the case, especially with Dry Promotions. An employee may absorb 50% more responsibility for what turns out to be only a 1% raise if they fail to inquire beforehand. Understanding the pay structure tied to the new role is therefore essential.

The rules governing pay upon promotion can be rigid, especially in public service. For instance, in the U.S. Federal General Schedule (GS) system, a promotion triggers the two-step promotion rule. This rule mandates that the employee’s basic pay must be set at the lowest rate of the higher grade that exceeds their existing rate of basic pay by at least two within-grade step increases for their old grade. If the pay scales change significantly due to a geographic relocation upon promotion, an agency must first convert the existing pay to the new location's scale before applying the two-step calculation. This level of administrative detail shows that pay setting is a technical, rule-based event, not always a negotiation once the promotion is decided.

If an organization is trying to save money, they might engage in Quiet Promoting—assigning new duties without a title or pay bump. This is often structurally easier when an employee is already at the top of their current pay band. If you are already at the maximum rate for your current grade, the company has limited ability to give you a significant raise without changing your grade (a promotion). If the promotion is "dry" (new title, same grade), you remain capped, and any additional responsibilities are pure extra effort for no positional pay gain. This situation can cause high performers to leave, as evidenced by the statistic that nearly $34%$ of workers have looked for a new job in the last six months due to a lack of growth pathways.

An original analysis of these pay structures suggests an actionable tactic: The Value Visibility Scorecard. When preparing for a promotion discussion, employees should create a simple two-column document. Column A lists the specific, measurable criteria required for the next level (if known, or based on demonstrated capacity). Column B lists tangible proof of meeting those criteria, explicitly including instances where you acted above your current grade. A third, critical column is Cross-Currency Log, detailing specific instances where you helped a peer or another department solve a problem, including the name of the peer and, where appropriate, their manager’s email address copied to your manager. This log directly addresses the need for peer manager approval in calibration meetings, turning abstract goodwill into documented, organizational value that transcends your immediate team’s scope.

# Navigating the System

Regardless of the company’s stated policy—whether it favors formal applications, closed nominations, or internal creation of roles—the single most consistent initial step is ensuring your immediate management is aware of your ambition. Your manager acts as the essential gatekeeper and advocate. They can steer you toward appropriate training, stretch assignments, or projects that build the necessary skills for the next level.

If your manager challenges the merit of a promotion, you must hold them accountable by asking for specific, actionable skills you need to develop, and ideally, securing a commitment from them in writing to assist in that development. Furthermore, since promotions often require senior approval, actively seeking to build relationships with those higher-level decision-makers, even if they are not your direct supervisor’s supervisor, can dramatically increase your visibility.

Ultimately, while formal policies aim for fairness, promotions often involve navigating unwritten norms, especially around recognition and political capital. Understanding who ultimately signs off on the change and making sure your accomplishments are visible not just vertically, but horizontally across influential peer groups, transforms a passive waiting game into a strategic campaign for advancement.

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# Criteria and Fair Play

To ensure the process feels fair, organizations must establish clear, documented promotion criteria. These criteria should look beyond pure tenure and measure performance, skills, leadership competency, and alignment with company values. In the absence of such clarity, subjective factors like affinity bias (favoring those "just like them") or proximity bias can take over, leading to situations where excellent performers are overlooked while others advance.

Even when processes are transparent, statistics show room for improvement. While nearly $80%$ of employees believe they know what it takes to get promoted, there is still a perception gap, with men reporting slightly higher confidence in understanding the mechanics than women.

A useful exercise for employees preparing their case is to focus on Readiness Indicators, which goes beyond just ticking off past achievements. A Readiness Indicator focuses on transferable capacity. For example, instead of stating "I managed Project X," state, "I demonstrated the ability to manage a complex, cross-functional project (Project X), a core requirement for the 'Senior' designation, as evidenced by [result/metric]." This frames past success as proof of future capability, directly addressing the criteria often used in performance/potential calibration discussions.

In summary, promotions work through a defined structure—vertical movement, defined types, and pay rules—but the execution is highly dependent on visibility, internal politics, and the employee’s proactive engagement. Whether your company relies on a structured application portal or an informal chat, making your value visible to all relevant decision-makers is the common denominator for true career movement.