Passed Over for a Promotion? The Best Path Forward for Disappointed Employees and Organizations

“Sorry, we decided to hire someone from the outside for this position.” Chances are if you have been in the workforce for a number of years, you have experienced the bitter pill of being passed over for a promotion you thought you had locked up. Once you take the time to cool off and grieve over the career disappointment, what you do next can affect the future trajectory of your career and professional development. Organizations also need to be aware of the repercussions and effectively deal with issues of employee morale after passing over a long-term employee in good standing.

When a passed over employee asks why? Company executives need to be prepared with constructive responses to help employees understand and accept the decision-making that led to an outside hire or choosing a competing internal candidate. The reasoning is best if it is quantifiable and based on objective measures. Explanations like “You are not ready” simply don’t provide the substance and details that can be useful.

If an organization can’t offer an explanation based on company goals, needs, policies and its defined criteria for success, it’s time to beef up its 360-degree feedback mechanisms. A check on how these messages are communicated and the clarity by which employees know what is expected of them is also worthwhile. Otherwise, an organization may experience problems, due to employee resentment, poor morale and the loss of trained team members with valuable institutional knowledge, who jump ship to pursue better opportunities.

Conduct an Honest Self-Evaluation

After taking the time to lick their wounds, passed over employees need to take the time to conduct a thorough and honest self-evaluation of their skills, accomplishments, strengths and weaknesses. Perhaps losing the promotion had absolutely nothing to do with your skills and performance and had everything to do with office politics. If this is the case, and you determine it’s impossible to overcome it’s best to know now and use this professional bump in the road as a career wake up call and an opportunity to pursue different opportunities.

You should also determine if you are as good as you think you are. Have you miscalculated your chances for promotion? Are you too focused on your duties and responsibilities, as opposed to your actual performance and measurable accomplishments? Do you lack the leadership and team-building skills that the higher-level position requires? Do you lack certain technical skills or an advanced degree that the company prefers for the position?

Request a Meeting With Your Supervisor

After conducting a calm and objective post-mortem, request a meeting with your supervisor to determine why you were passed over for the promotion. Oftentimes, managers feeling a sense of guilt are reluctant to deliver a hard, cold assessment after an employee has just experienced a huge disappointment. However, if you request constructive feedback, you just might get it, and it may be the best thing that ever happened to you professionally. Knowing how the higher-ups in an organization view you is invaluable, whether you decide to leave the company or not. If you decide to stay, take charge of your own career and create an individual development plan, and ask your supervisor for help, guidance and support in implementing it. This is the best way to impress your supervisors and set the stage for a future promotion.

Organizations Should Have a Constructive Feedback Structure

Organizations can also learn from the internal conflicts and struggles that can occur after an employee is passed over for a promotion. Regular and constructive feedback is vital for employees’ professional and personal development. If an organization’s current employee evaluation system is contributing towards employees misreading or  miscalculating where they stand, perhaps it’s time to improve it. Both the employee and the organization stand to benefit from clearly defined lines of communications, clear expectations, goal setting, succession planning and the company’s criteria for success. 

Strengthening employee feedback policies will help place organizations and their employees on the path to success. It is a most basic and simple principle of human behavior that unambiguous, explicit feedback leads to the greatest impact on behavior. Don’t we all like to know hear what others think about us? How they see us? Usually it is these simplest of ideas that can be the most challenging to execute!

The Problem or the Symptom?

The topic of women in the boardroom has been discussed over and over. Some European countries have even instituted quotas so that there are more women directors. My recommendation is to back to the source of the problem. There are not enough women operators/general managers or CEOs. The bottom line is that the CEO skill set or having run a business is still the number one  for most board seats. So until there are more women in these roles it will be a challenge to have more women in the board room. So women, step out of the HR and marketing roles and get into operations! Request (even demand) those assignments that lead to P&L responsibility. The board seats will follow.

Corporate Governance Lessons from News Corp.’s Hacking Scandal

In the past few weeks we have been treated to the oftentimes shocking spectacle of News Corp. Chairman and CEO Rupert Murdoch, one of the world’s most powerful media moguls, publicly refusing to accept responsibility for the criminal phone hacking activities of employees of his now-shuttered News of the World British tabloid. The eighty-year old magnate, while testifying before the House of Commons, apologized for the scandal, but he denied knowing until very recently, of the widespread hacking of thousands of private voice mails and the bribery of police officers; a practice that has been ongoing since at least 2005.

Murdoch, appearing somewhat befuddled and “humbled,” told the committee “The people I trusted to run it and maybe the people they trusted” are to blame, adding that he shouldn’t be held responsible for the criminal behavior of a newspaper that represented a tiny fraction of his global empire. His son James Murdoch, chairman of News International, also denied responsibility, while simultaneously admitting to authorizing millions of dollars in payments to settle claims against the company for hacking. The scandal has now reached the United States with the FBI launching an investigation into allegations that News Corp. hacked the phones of the families of 9/11 victims.

What does this scandal say about New Corp.’s commitment, or lack thereof, to corporate governance? Corporations rise and fall based on their organizational strengths and weaknesses. The Board of Directors is tasked with oversight of senior management, setting the tone for the corporate culture of an organization and is responsible for corporate governance. Directors answer to, and are legally obligated to protect the interests of stockholders. News Corp. says it’s “committed to strong corporate governance and sound business practices,” but there is a lack of independence of its Board that makes such a commitment nearly impossible. Although News Corp. is a publicly traded corporation Rupert Murdoch has oftentimes treated it like a private family business.

Murdoch serves as both Chairman of the Board and CEO, a structure that has come under fire in the past few years because it makes genuine oversight problematic. Two of his children, Lachlan Murdoch and James Murdoch, are board members, as well as five company executives. The remaining nine independent directors on the Board have limited power. Why? Primarily because there is no “one share one vote” system in place at News Corp. The controversial dual-class stock structure limits voting rights to class B shares. And Rupert Murdoch and his family control nearly forty percent of the 798 million class B shares. The class A shareholders have no voting power and no say in how the Murdoch family media conglomerate is managed. But they do have the power to sue Murdoch, his company and the directors for breaches of fiduciary duty.

Groups of institutional investors are now forcing Rupert Murdoch’s hand by filing a slew of lawsuits against News Corp. and its directors for shoddy corporate governance. One such lawsuit, spearheaded by the Amalgamated Bank, rails against the Board of Directors that failed in carrying out its oversight duties and permitted Rupert Murdoch to treat News Corp. like a “family candy jar.” The suit points out that despite years of police investigations and arrests of News Corp. employees, Rupert Murdoch didn’t authorize the Board of Directors to launch an internal investigation until July 7, 2011.

The lawsuit alleges the phone hacking crimes “show a culture run amuck within News Corp. and a board that provides no effective review or oversight.” Moreover, because of Murdoch’s opposition to sound corporate governance shareholders suffer from a “Murdoch discount” that weakens the value of their shares.

Institutional shareholders, already troubled over the lack of a transparent succession plan, are also calling for Rupert Murdoch to step down as CEO to make way for a strong independent voice on the Board. News Corp.’s annual general meeting in October should be filled with plenty of fireworks.

We have seen time and again the consequences when the Board does not set effective risk management procedures. Additionally, internal management controls must be established and ethical business practices must come from the top down. Unfortunately, once again it has taken a crisis to illuminate the weaknesses in New Corp.’s corporate governance structure. This will continue to place the company and its directors at risk, unless and until major institutional reforms are implemented. For the rest of us out there take note!