1) Promotion:- Means shifting an employee to a higher position carrying greater pay, status & responsibilities Various positions in an organisation are usually filled up by promotion of existing employee on basis of merit or seniority or combination of both.

2) Transfer:- Refers to change in job assignment which may involve promotion, demotion or no change in terms of responsibility & status. Transfer may be either temporary or permanent depending upon necessities of filling jobs. Transfer generally involves no significant change in pay, status & responsibility of employees.

Advantages:-

1) Employees are motivated to improve their performance.

2) Industrial peace prevails in enterprise because of promotional avenues.

3) It is cheaper source as compared to external source.

4) Transfer of job is a tool of training employees to prepare them for higher job.

5) It promotes loyalty among employees as they feel secured on account of chances of advancement.

Limitations:-

1) The scope of fresh talent is reduced, when vacancies are filled through internal promotions.

2) The spirit of competition among employees may be hampered.

3) Frequent transfer of employees may reduce overall productivity of organisation.

4) There may be chances of conflict in fighting among employees who aspire for promotion to available vacancies as those not promoted may become unhappy & there efficiency may decline.