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I was recently hired to be a manager at a new company and during my onboarding I was told that there isn't really a promotion process here and it is expected that worthwhile employees will figure it out.
Is this an accurate perception? Do companies do better if they have promotion policies or do they do better if they have a more organic approach?
Pros and cons of having a workplace promotion policy vs just having employees figure it out?
Just figure it out - Pros:
There isn't a single pro for the employee. Lack of career progression opportunities is one of the common reasons employees leave a company.
Just figure it out - Cons:
Career Progression Policy - Pros:
Career Progression Policy - Cons:
Flexi has a great answer that covers most things. I just wanted to add this.
There is always a promotion policy.
Companies do not exist in a vacuum, as much as many think they do for the purposes of employment. The generalized promotion policy varies by industry, but at least in tech, it is generate a resume, pass a technical interview, pass a behavioral interview, and maybe pass another technical interview.
Left to their own devices, you can expect a lot of employees to take the default option.
You basically need to bet that employees would rather "figure it out" instead of taking the defined path (which always exists in one form or another). That to me is the largest con, albeit with the bias that as an engineer, I much prefer a process I can break down to one that is messy and not rule based.
I was recently hired to be a manager at a new company and during my onboarding I was told that there isn't really a promotion process here and it is expected that worthwhile employees will figure it out.
Let me translate that for you:
We don't know how to properly promote people so it is easier to not even try. We think this has worked so far. The people who fight tooth and nail will eventually get recognized, I think; err at least they will once somebody higher up quits.
Filling your position with an external candidate should be enough evidence as to how well our "organic" approach works.
Is this an accurate perception?
It's their perception, yes.
Do companies do better if they have promotion policies or do they do better if they have a more organic approach?
I would say that there is always a policy; this one is based on the secret whims of middle and upper managers, combined with the clout of each manager.
That's the current policy, and should be the baseline for comparisons.
I was recently hired to be a manager at a new company and during my onboarding I was told that there isn't really a promotion process here and it is expected that worthwhile employees will figure it out.
I would question the implicit assumption that the skills required to figure out the workings of an undocumented, informal promotion process are closely correlated with the skills required to be a valuable employee. There might be some workplaces where this is true due to the nature of the work, but there's no obvious reason to believe this as a general principle. To be blunt, it sounds like optimism.
There's also a question about how much time you want employees to spend trying to figure out that process, vs. just being able to point them at the documentation. This one comes down partly to elements of scale - for a small business that only needs to deal with these issues occasionally, an ad-hoc process might be less effort, but for a large one there's more benefit in standardisation.
(There is also an issue of whether a candidate's ability to game the process correlates well with their value as an employee, but that's an issue for both formal and informal processes, albeit in different ways.)
I will note that a formal promotion process doesn't automatically mean depending on KPIs or other such gameable metrics.
I would argue that whether companies “do better” or not has less to do with the specific binary bit of “promotion policy/no promotion policy”, and a lot more to do with whether the company is well-managed overall and has a healthy company culture.
Now, in particular, “well-managed” and “healthy culture” mean a company where management doesn’t give BS explanations to employees and middle managers for why it does things. And the explanation “it is expected that worthwhile employees figure it out” that you were given sounds like just that — BS. To believe that it was offered in good faith, you have to believe that the person who told you this thinks that the set of skills that makes a good employee who is deserving of promotion coincides with the ability to “figure it out” and manage to get a promotion by being savvy about company politics, knowing who are the right people to impress/suck up to, and assert yourself as being worthy of promoting. But this is an obvious fallacy. And as @flexi’s answer illustrates (notwithstanding some of the valid criticisms against it offered in the comments), the overwhelmingly more plausible explanation for why the company doesn’t have a promotion policy are that either management is too lazy or incompetent to come up with such a policy, or they believe that not having a policy stacks the deck in their favor and allows them to underpay good employees. As @flexi explained, this is short-termist thinking.
TLDR: there are probably some decent or even good arguments in favor of not having a promotion policy — assuming that decision was made on a rational basis in a way that’s consistent with many other rational decisions and in the context of the company’s specific culture/industry/situation — but the one you were offered is quite clearly not one of them.
