Updated June 18, 2026

Promoting an employee(s) is an exciting time for your business. After all, you’re finding your future leader(s). Despite this, employee promotions come with challenges.

The biggest challenge? Making promotion pathways clear to all of your employees. Gallup research found that 1 in 4 Americans lack opportunities for career advancement. Frustrations can rise quickly; 63% reported that their organization doesn’t promote accordingly.

This can often be the case when companies promote employees for the wrong reasons or at the wrong time. Many times, companies also offer the wrong kind of promotion. The most common kinds of promotions are merit-based, which are competitive promotions based on skill, performance, knowledge, hard work, and qualifications.

However, there are other types of promotions most employees won’t be as familiar with:

• Time-scale promotions, which are based on seniority
• Accretion of duties, or when you gain a larger workload
• Ad hocism (meeting the needs of times or situations that popped up)
• and merit-cum-seniority promotions, a combination of merit and seniority

Considering the various forms of employee promotions and the needs of your business, it’s understandable to need  guidance on when to promote your employee.

What Are the 5 Signs an Employee Is Ready for a Promotion?

They Showcase Exceptional Emotional Intelligence

While emotional intelligence doesn’t speak to the performance of an employee, it does provide great insight as to how someone would perform as a leader. As a high-level employee who needs to manage a team, it’s important to be able to understand the behaviors of teammates.

In a Career Builder survey, it states that 75% of hiring managers said they would promote a high emotional intelligence worker over a high IQ candidate.

Great leaders provide the tools, training, and culture to help their employees do their jobs better and achieve their goals.

If you have an employee who can effectively manage burnout, disgruntled employees, and influences outside of the workplace, it may be time to promote.

They Have an Ability to Lead, Not Solely Manage

Just because someone is given the title of manager doesn’t mean they can successfully lead a team. Strong leaders will inspire, educate, and adapt in sticky situations. Those who manage without leading can add stress to a team that already has plenty of other concerns.

A leader must be selfless—they need to invest in the careers of their teammates because they are focused on the betterment of the company, not themselves.

A workplace learning report by LinkedIn shows that 94% of employees would stay at a company longer if the company invested in their career.

Promote your leaders.

They’re Constantly Willing to Learn

There is always something to learn. This is true for your employees who are taking the next step in their career.

In 1969, Laurence J. Peter and Raymund Hull wrote the satirical book The Peter Principle. In it, they argued that in a workplace hierarchy, employees are promoted until they reach their “level of incompetence” where they can no longer perform well. (This is where, the authors joke, so much rampant inefficiency comes from in American business culture.)

The book put a unique spotlight on managers, particularly those looking to promote talent. Rather than promoting based on past successes, the Peter Principle became evaluating an employee on the skills they would need for the next role. The biggest indicator of how well they’d adapt, the authors argue, came down to learning.

Willingness to learn can look like:

• Keeping up with industry publications, even those beyond an employee’s direct responsibilities.
• Engaging with company learning efforts, like virtual learning badges.
• Attending conferences, webinars, and other third-party opportunities to improve skillset.
• Meeting with other departments internally simply to ask what they do each day.

If the employee doesn’t want to harness as much knowledge as they possibly can about the role, the company’s mission, and all aspects of the work their team does, they’ll have an increasingly difficult time managing those below them.

Their Current Role is Too ‘Easy’

Although an employee promotion shouldn’t be based solely on performance, it does play a big part in the decision.

If you have an employee who always meets deadlines, completes work that exceeds expectations, and volunteers for opportunities, they may be ready for a heavier workload. Volunteering demonstrates leadership aptitude. Leaders are proactive, and proactive people don’t wait to be told what to do. They’re already doing it.

Furthermore, high-performing employees typically drive their own career advancement. If an employee approaches you seeking more responsibility, you should consider assisting their career advancement with a promotion.

In an effort to determine which employees are performing at a high level, use an employee evaluation template for fair judgments.

They Positively Impact Your Company Culture

Among the important considerations for an employee promotion, the way they impact your company culture may be one of the most under-considered.

Optimistic employees who buy in to the company’s culture and lead by example with their positive mindset to their teammates will help in your retention efforts. A study shows that approximately 32% of employees strongly agree that they can be their authentic self in the workplace.

Considering your employees spend most of their time working, they should have a leader that promotes authenticity and positive attitudes.

If you are still struggling to determine which employee deserves a promotion, consider working with a professional employer organization (PEO). As experts in the human resources field, a PEO can provide great value when it comes to making backend decisions for your business.