Demotion refers to an employee having his or her job rank, status, or title lowered. A demotion comes as a result of either a mandatory decision from the employer, or from the employee's own request. In that case, it's often called a deployment.

Compulsory Demotion

An employee might be demoted for a variety of causes. Often, the employee may have been promoted internally, then not able to complete his or her responsibilities. Maybe they bumped up to a managerial position and simply couldn't oversee the team successfully.

Another example of compulsory demotion is if an employee can't create and implement an appropriate strategy for his or her division. Alternatively, a demotion may occur if certain responsibilities are taken away from an employee. Perhaps someone else is hired to share the same duties, or positions are cut in order to declutter the organization's reporting hierarchy.

This can increase the number of reporting team members for managers who retain their positions; for example, a manager position may be eliminated, with everyone in the department now reporting to the division vice president. Sometimes this happens strictly for organizational reasons, while other time it happens to cut costs as a part of layoffs. Compulsory demotion can also save the organization costs in terms of less expensive salaries and benefits.

Compulsory demotion can also come hand in hand with termination. In an act of goodwill, the employer may give the employee some time to start their job search while still remaining on staff. But the employee, if a manager, may not have incentive to lead well, so he or she may be placed elsewhere for the time being. For a regular worker, the demotion may be contingent upon the continued professionalism of the departing employee.

Voluntary Demotion

A voluntary demotion may be requested by an employee to help better manage other aspects of his or her life. He or she may prefer fewer responsibilities or limit the number of people s/he oversees. If it's not possible for the employer to accommodate these changes within the existing positions, the employee can instead go from a manager back to an individual contributor on the team.

Perhaps a manager just had a child and wants to reduce her required hours until her child is older. That could result in a voluntary demotion until she ready to tackle the managerial track once again. Another example is if an employee needs some flexibility in his schedule. Perhaps he wants to work from home or complete his tasks on a different schedule. In order to make this happen, the employee may also volunteer for a demotion.

In another instance, someone may want to stay with the company, but the only position available after restructuring is a demotion. Or maybe that person wants to move to another location for personal reasons, and the only available position would be a demotion. An older employee may want fewer responsibilities while preparing for retirement. All of these reasons account for voluntary demotions -- taking a different position in order to balance your work and life needs.

When it's not voluntary, but a compulsory demotion, it's often a tactic used by an employer as a warning before firing. There are truly a broad range of reasons behind a demotion, whether voluntary or compulsory.


A demotion is when an employee is permanently reassigned to a different position with fewer responsibilities than their current one. The skill level needed may also be lower, and it usually also comes along with a smaller pay range. Sometimes demotions are voluntary, while other times they're involuntary, perhaps caused by a poor employee evaluation, restructuring the organization, removing existing positions, or as a form of discipline.

But a demotion can also be used to keep an employee who performs well in a certain position, but perhaps not the promotion they received. Involuntary demotions can sometimes backfire. It could cause bad blood between the employee and upper management, particularly if it is from misconduct. Other employees may also take a bad view of compulsory demotion, taking it as a sign of an unstable work environment.

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