Is a Demotion Ever the Right Choice?

How do you make a demotion a win-win for both the employer and the employee? You ask yourself these three questions and then suck up your pride.



I was recently asked if demotions can ever successful. That’s hard to answer since demotions typically make either the employee or the company look like a loser. How do you suck up your pride to make a demotion a win-win? That’s exactly what you do – but first, employers need to assess the reasoning for a demotion.


If you’re considering the choice of demoting an employee, ask yourself the following questions:

Are you demoting an employee with plans to fire them?

A demotion should never be used as a step just prior to firing an employee or pursued with hope that it will encourage an employee to quit. If the employee’s lack of performance or poor behavior merits termination, don’t delay terminating the employee and risk morale issues (or worse) by retaining them.

Does the employee know disciplinary action is coming?

Disciplinary action such as a demotion, warning, or termination should never come as a surprise. If employees aren’t meeting performance goals, they should be well aware of it. Also, be sure you’ve documented all disciplinary measures along the way to prevent any wrongful termination or discrimination claims.

Does the company have any fault for the employee’s lack of performance?

This question requires honest introspection on behalf of the employer. Did you promote an employee that didn’t deserve it? Should you have opened up the position and done a better job at conducting your due diligence for the right fit? Did you provide any developmental training to help the employee be successful in their new role? If guilty for doing (or not doing) of any of these, then perhaps a demotion back to his former position (or equivalent) is the best option. However, as a best practice, you should allow the employee to keep his pay raise from the promotion.

Warning: demotions oftentimes create disgruntled employees, so address this candidly. Explain that the success of the move is completely dependent on the employee and that any signs of moping or complaints will be met with an exit package. The company needs him to be successful, which is why they’re choosing to retain him.


If you’re being demoted, you basically have three options: stay and rededicate your attitude and performance to make the move successful; stay and be bitter about the demotion; or leave the company to find a job elsewhere. If you choose to stay, don’t be half in and half out. The company has decided to retain you, which means they still value your expertise and skillset, despite this being a hit to your pride. Handle the demotion with grace, as humiliating and frustrating as it may be. Your coworkers and superiors are watching you, and how you handle this setback will become key to your future. In fact, your approach may be a determining factor for a coworker or supervisor who someday refers you to a future role inside or outside the company.

Demotions can be successful when handled delicately, recognizing that there’s a person with feelings behind the move. For more tips on how to handle a demotion, please contact our experts at

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