Promoting a good employee seems like a straightforward decision. Someone does their job well, understands the business and has been with the company for a few years. Giving them a more senior position feels like the natural next step.
But being good at one job does not necessarily mean someone will succeed at another.
A skilled salesperson, for example, may struggle to manage a sales team. An experienced specialist might find it difficult to delegate work or resolve disagreements between colleagues. The responsibilities change, and so do the skills required to handle them.
Research published in The Quarterly Journal of Economics in 2019 examined promotion decisions at 131 firms. Alan Benson, Danielle Li and Kelly Shue found evidence of what is commonly known as the Peter Principle: companies often promote employees based on their performance in their current roles, even when those results do not necessarily predict how well they will manage others.
For employers, the challenge is to look beyond an employee's current results and assess whether they can handle the demands of a different position. Here are seven signs worth paying attention to.
1. They Can Handle Problems Without Waiting for Instructions
An employee who regularly asks a manager to make routine decisions may not be ready for a position with greater responsibility. Someone who can assess a situation, consider the options and decide what to do is a stronger candidate.
This does not mean they should work without guidance or never ask questions. The difference is that they know which decisions they can make themselves and when a problem needs to be escalated.
Employers can observe this during everyday work. Does the employee find a solution when a supplier misses a deadline? Can they reorganize priorities when an urgent request comes in? Do they explain what went wrong and suggest a way forward?
These situations reveal how someone approaches responsibility when there is no ready-made answer.
2. They See Problems That Affect the Wider Business
Some employees focus almost entirely on their own workload. Others notice when a problem in one department creates extra work for another.
That broader perspective can be valuable in a more senior role.
Consider an employee who notices that customer complaints keep increasing because the sales and support teams are working with different information. Instead of treating each complaint as an isolated issue, they raise the problem and suggest a way for the departments to share updates.
This kind of thinking shows an understanding of how individual tasks fit into the company's operations.
Employers should pay attention to employees who can explain why a problem matters beyond their own team and who take an interest in fixing its underlying cause.
3. Colleagues Already Turn to Them for Help
Formal authority is not the only way to recognize leadership potential. Sometimes colleagues already rely on a particular employee for advice, practical help or guidance.
A developer might regularly help newer team members understand a difficult process. An experienced customer service representative might show colleagues how to handle complicated cases. A project coordinator might be the person others approach when they need to resolve a scheduling problem.
These employees are not necessarily doing a manager's job, but they may have developed some of the skills the position requires.
Look at how they help others. Do they explain things patiently? Are they willing to share knowledge? Can they support a colleague without taking over the entire task?
An employee who is good at their own job but unwilling to help anyone else may need more time before moving into a role that involves managing people.
4. They Can Disagree Without Making It Personal
Senior employees often have to deliver difficult feedback, challenge decisions and deal with disagreements. Avoiding uncomfortable conversations is rarely an option.
Employers should observe how potential promotion candidates behave when their opinions are challenged.
Can they listen to criticism without immediately becoming defensive? Are they able to explain why they disagree without dismissing another person's point of view? When a discussion becomes tense, do they help move it toward a solution?
This matters particularly in remote teams, where written messages can easily be misunderstood and disagreements may take longer to resolve.
A person does not have to be naturally outgoing or particularly persuasive to become a good manager. What matters is whether they can communicate clearly, respect other perspectives and address problems directly.
5. They Know When to Delegate
One of the biggest changes when moving into management is having to achieve results through other people.
Employees who are used to doing everything themselves may find this difficult. They might take on too much work, struggle to trust colleagues or repeatedly step in instead of allowing others to complete their tasks.
Delegation requires a different approach. A good candidate for promotion should be able to explain what needs to be done, choose the right person for the task and give them enough room to do it.
Employers can test this before making a promotion decision by assigning the employee responsibility for a small project involving several colleagues.
The aim is not simply to see whether the project gets completed. It is to find out how the employee organizes the work, distributes responsibilities and responds when someone needs additional support.
6. They Are Interested in Learning What the New Role Requires
An employee may be excellent at their current job and still have significant gaps when it comes to the next position.
Someone moving from a technical role into management, for instance, may need experience in budgeting, planning, performance reviews or conflict resolution. Those skills do not automatically come with years of technical experience.
A 2025 study by Isabella Grabner, Judith Künneke and Frank Moers, published in Management Science, examined how companies assess employees' potential when making promotion decisions. The researchers found that adding formal potential assessments to performance reviews did not automatically improve promotion outcomes. Supervisor evaluations were sometimes inaccurate because managers did not sufficiently distinguish between current performance and the ability to succeed in a different role.
For employers, this is a reason to be specific about what the next position involves.
If an employee is interested in becoming a team leader, give them opportunities to coordinate work, provide feedback and take responsibility for a small group project. Training can also help fill gaps before the promotion takes place.
Employers should also give employees the chance to learn and develop the skills they need to take on a new role.
7. They Actually Want the Job
A promotion usually brings a higher salary and a more senior title, but it can also mean longer hours, more difficult conversations and responsibility for other people's performance.
Not everyone wants that arrangement.
Some employees would rather become highly skilled specialists than manage a team. Others enjoy their current responsibilities and have no interest in taking on a different role.
Before considering someone for promotion, employers should ask about their career plans. A conversation about where they want to be in two or three years can reveal whether management is something they genuinely want or simply the next step they feel expected to take.
This also gives employers a chance to discuss alternatives. A senior specialist position, for example, may offer career progression without requiring the employee to become a manager.
Employers can also make a role more attractive through benefits beyond salary. Here are some benefits small businesses can offer to compete for talent without increasing salaries.
How to Make a Promotion Decision
These seven signs can help employers identify potential candidates, but they should not replace a proper assessment of the position.
Start by writing down what the new role actually requires. If the position involves managing people, technical expertise alone is not enough. If it is a senior specialist role, the ability to handle complex work may matter more than experience supervising colleagues.
Then look for evidence. Performance reviews, completed projects, feedback from colleagues and examples of handling unfamiliar responsibilities can all help. Avoid relying on a manager's general impression that someone is a natural leader.
It is also worth giving candidates a chance to try some of the responsibilities before making a permanent decision. A temporary project lead assignment, for example, can show how someone handles planning, delegation and communication.
Finally, be clear about the reasons behind the decision. Employees who are not selected should understand which skills or experience they need to develop if they want to be considered in the future.
A promotion should not be a reward for loyalty or a way to recognize someone who has simply been doing the same job well for a long time. It should reflect the work the company needs done and the person's ability to take it on.
For employers, getting that decision right can make the difference between filling a position and actually finding the right person to do it.
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Benson, A., Li, D., and Shue, K. (2019). Promotions and the Peter Principle. The Quarterly Journal of Economics, 134(4), 2085–2134.
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Grabner, I., Künneke, J., and Moers, F. (2025). Promotion Decisions and the Adoption of Explicit Potential Assessment. Management Science, 71(11), 9233–9255.
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Schleu, J. E., and Hüffmeier, J. (2021). Simply the Best? A Systematic Literature Review on the Predictive Validity of Employee Performance for Leader Performance. Human Resource Management Review, 31(2).