Dry promotion: ’New title, no raise’ appraisal trend leaves employees in a pickle

  • 'Dry promotion’ is a practice where an employee gets a promotion in the job but not a salary hike.

Livemint
First Published15 Apr 2024
Some employers also look at ‘dry promotion’ as an opportunity to redistribute the responsibilities of laid-off workers to their existing employees without raising their cost-to-company package.
Some employers also look at ‘dry promotion’ as an opportunity to redistribute the responsibilities of laid-off workers to their existing employees without raising their cost-to-company package.

When an employee receives a promotion, usually a salary hike also will be given.

But, as companies are focussing on cost-cutting measures across the globe, a new trend -- ‘dry promotion’ -- in the appraisal process is emerging. The new corporate trend has left many employees in the lurch. 

The ‘dry promotion’ is referred to as a practice where an employee gets a promotion in the job but not a salary hike.

ALSO READ: Average salary appraisals in IT sector projected between 8.4% to 9% in 2024

In simple words, it can be explained as in ‘dry promotion’ an employee’s designation changes and workload increases, but the monetary compensation remains the same.

Recently, a report by compensation consultant Pearl Meyer revealed that more than 13 per cent of employers chose to give their staff new job titles instead of a hike in salary. In 2018, this number was only 8 per cent, reported The Wall Street Journal.

Separately, a report by benefits-advisory firm Mercer said that a survey of 900 companies showed that more employers are assigning less of their salary budgets for promotion-related hikes in 2024 when compared to 2023.

Some employers also look at ‘dry promotion’ as an opportunity to redistribute the responsibilities of laid-off workers to their existing employees without raising their cost-to-company (CTC) package. 

ALSO READ: How to manage your anticipated salary appraisals?

New strategy to retain talent

The report shows that many companies are increasingly relying more on job titles in their strategies to retain talent.

The increasing trend of ‘dry promotion’ can also be attributed to the increasing adoption of Artificial Intelligence (AI), which is impacting organisational structure, change management, and employees’ roles.

“Thirty per cent of respondents have added AI as an additional area of responsibility to an existing executive role, and 9 per cent have either promoted an executive from within or made an external hire. Roughly one-third (32 per cent) are taking a decentralised approach to AI oversight, indicating they expect AI efforts will be led by various leaders across multiple functions in the organization,” said Pearl Meyer in a separate report this month.

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