Directorate of distance education master of business administration

 
a. Demotion is the diametric opposite process of promotion. 
It is a course of action by which an employee is assigned a downward 
assignment in the organizational hierarchy to a different job with lesser 
pay, inferior designation, lower category, reduced status and responsibility. 
An organization uses demotion less frequently than the other aspects of 
mobility, primarily because of its serious negative implications on the 
employee’s career and morale. An employee is likely to accept a demotion 
rather than lose the job altogether if the employment opportunities in 
the job market outside are less. 
Every manager is said to rise to his or her level of incompetence. 
In that case, demotion would be one of the consequences arising out 
of an employee’s inability to match the requirements of the present job, 
or when a promotion has been made provisionally. Demotion may also 
occur as a disciplinary measure owing to the acts of commission of 

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malpractice by the employees.  In the context when employee turnover 
is high and organizational structures are flattering, demotion could be 
losing its significance and impact.  Demotion would be less frustrating to 
an employee if the placement in a particular position had been notified 
as temporary and revocable.