Demotions, like other employment decisions, need to be handled carefully. You should ask yourself the following questions to ensure you are handling the situation fairly and legally:
* Do you have an employment contract with this employee guaranteeing them a certain position or rate of pay? If so, demotion may not be feasible.
* Why are you considering the demotion? Is it poor performance, restructuring, or by request? Do you have documentation to back up your reasoning? Having a clear, documented, legitimate business reason for the demotion is important.
* If the demotion would be due to poor performance, have you tried training and coaching to help the employee improve? Have you documented these efforts? A good faith effort to help the employee improve can be helpful if they challenge the demotion.
* How confident are you that a demotion would resolve the issue? If a demotion is not likely to be successful, would termination be more appropriate? If a demotion isn’t likely to solve the problem, another option may be preferable.
* If their job duties would change, who will pick up the work the employee is no longer doing? Plan for this transition.
* How would the demotion affect the employee’s pay and benefits? Be sure these changes are communicated.
* Have you discussed the potential demotion with the employee, or will this come as a surprise to them? If a surprise, be prepared for a hard conversation.
* Are you prepared to answer any questions or arguments the employee may have in response? Think ahead of time what the employee is likely to ask or say.
* Have you done demotions in the past? Would this one be done for a similar reason and in a similar manner? Inconsistent practices can open you up to discrimination claims.
This Q&A does not constitute legal advice and does not address state or local law.
Answer from Wendy, PHR
