Demotion Letters to Employees | Free Download

Download a free template from Pocket HRMS for demotion letters to employees.

Sometimes organisations need to take actions like demoting an employee. While there is no pleasure in doing so but actions can be inevitable. Irrespective of the performance, this can be shocking news for your employee, so making sure to deliver it in a formal manner is the right way. 

The demotion of any staff member is a critical decision for the firm as well. It should be kept as a last resort due to following reasons. 

Often mentioning such possibility leads to lesser output than before. 

• The demoted employee tries to undermine other people’s performance. 
• An employee is likely to become even less engaged and dissatisfied with the company. 
• It also leads to hostility toward the team.
• A wave of uncertainty and fear related to the state of employment in the other employees’ minds.

Reasons for demotion

The reasons for the demotion of the employee such as

• shifting them to a profile that suits their skillset better
• disciplinary action for some kind of misconduct
• response to their request for the change.

How to write a demotion letter to employees?

While downshifting in the position, ensure no policies or employment laws are being broken. Listed below are a few things that you must keep in mind.

• Be compliant with necessary documents.
• Let them know about the reasons with proof.
• Give enough time for correction before taking ultimate action
• An employee should not feel that they are being unfairly targetted
• State the terms and conditions of the employment that support downshifting
• Before sending them an official letter, let them know in person.
• The demotion letter needs to contain precise information. 
• Make it very straightforward and concise.

A step-by-step guide to draft a demotion letter

• Start with the contact information, name of your company, date and time at the top as per the standard formal letter. 
• Don’t forget the subject and make it easy to comprehend.
• Address the employee with their name. 
• Feel free to mention an employee code if that is aligned with your company’s communication standards.
• Continue with getting straight to the matter. 
• State the reason for the demotion, and mention the previous warnings that give it context. 
• Here it is also important to provide their performance report if that caused the demotion.
• Mention the time span or the date on which the company will be re-evaluating the decision. 

What is the need for a demotion letter?

• The official letter for the demotion is important even if all the terms are being agreed upon during face-to-face discussion with the employee.
• A demotion letter notifies the employee that they are demoted from their present position and provides essential information regarding the process.
• The company needs to brainstorm in advance about the new roles and responsibilities of the demoted employee. The changes in the compensation and how an employee will react to them can be tricky. 

Why re-evaluate the demotion decision?

The re-evaluation is important to retain the employee. If they do not see possibilities for growth in future, they won’t hesitate to leave the organisation. Suggest the desired behaviour and performance targets for them if that is necessary. 

Since the demotion letter comes after the in-person discussion, you can make it crisp. If you are still facing some difficulties or want to save time, you can download our easy to customise demotion letter format now.