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Growth is exciting for a small business or startup — but it often comes with a lot of internal HR challenges, including the less-than-pleasant task of promoting or hiring the right person for the right management role (often to the disappointment of another employee). Done right, employee promotion can ensure growth. Done wrong, a promotion can lead to the kind of office politics that no CEO wants to deal with.

“What’s your best advice for explaining why an employee in the running for a promotion DIDN’T get a coveted new title?”

1. Be Clear

“Outline the employee’s successes within the organization so they know the things they don’t have to focus on. Then, as tactfully as possible, outline the areas where they need improvement so they can position themselves for that promotion in the future. That way, they clearly understand what they need to work on.” ~ Andrew Schrage, Money Crashers Personal Finance

2. Have a Career Plan

“It is easier to break challenging news when there is an alternative plan to get an employee where they want to go. Employees who see a future in the company, an opportunity to move up in title, a more challenging role and higher compensation tend to stick around, even if there is a setback. If they know what their target is, and there is transparency, this conversation is much easier to have!” ~ Raoul Davis, Ascendant Group

3. Be Honest

“As this is a great opportunity for employee development, don’t save face or overly sugarcoat the information. Highlight areas the employee should work on in order to succeed in the position in question, and identify appropriate resources to help them get where they need to be. Keep them motivated by giving them intriguing new responsibilities as well.” ~ Alexandra Levit, Inspiration at Work

4. Explain That You’re Running a Meritocracy

“From the outset, make it very clear that your company is a meritocracy, and then act that way. I find if you set clear expectations, this type of thing has minimal negative consequences.” ~ Rob Emrich, PaeDae

5. Be Open

“You must (I hope) have had good reasons to promote the person you selected. Convey these in a concise, clear manner to the person who did not get the title. True professionals should understand, appreciate and, hopefully, learn from a logical and rational decision. ” ~ Nicolas Gremion,

6. Tailor the Job to the Person

“If we have a new role that someone on the team can fill, it’s rarely about a “promotion,” but instead an evolution. We’re all growing together, so the job titles and responsibilities grow as we do. By customizing it to each person, no one loses out.” ~ Derek Flanzraich, Greatist

7. Become a Flat Organization

“If you choose to have an organization with fancy titles and a hierarchical system, then you are going to run into these problems. There is no good solution to sugarcoating the news to someone that their former colleague is now their boss. In this day and age, there is no reason why we have to have a corporate-looking system of promotions, instead of everyone just accepting more responsibility. ” ~ Matt Wilson, Under30Media

8. Do Away With Titles Altogether

“Titles make people feel more important, but they don’t make you more money. We eschew titles altogether and stick with disciplines to describe what the person does — marketing, finance, development, etc. You never have to explain why someone didn’t get a coveted new title if there weren’t any titles to begin with.” ~ Michael Portman, Birds Barbershop

9. Turn It Into a Motivational Lesson

“Rather than emphasizing the things an employee may have done wrong or poorly, I prefer to focus on the things that they did right — being proactive in meetings, showing enthusiasm, arriving early and staying late when needed, etc. By turning this missed opportunity into a learning experience, you keep the passed-over employee engaged and motivated.” ~ Zach Cutler, Cutler Group

10. Use Performance Evaluations

“Many executives and managers have trouble explaining why someone didn’t get promoted because they haven’t been doing performance evaluations, which is a huge disservice to their team and their business. Good performance evaluations show current performance and indicate future potential. In lieu of evaluations, though, explaining the decision based on current performance and future potential helps.” ~ Charlie Gilkey, Productive Flourishing

11. Inspire Employee Understanding With Honesty

“Honesty is crucial when delivering news in regard to a promotion. Inform your employee about your decision, and then tactfully explain your reasoning. In some situations, it may be in regard to skill level and experience; other times, it might come down to an employee being more of a natural fit in regard to personality or soft skills. This is a chance for an employee to learn and grow.” ~ Heather Huhman, Come Recommended