If you’ve ever heard of these words, “reorganization,” “reclassification” or even “reassignment” then you know that they often mean a demotion. A lot of recent media  coverage of former Today Show anchor Ann Curry used the word “reassignment” and speculation was rampant about her assumed demotion.

Demotions happen regularly, as seen in sports teams when a player sent down to the farm team. But what about demotions at work? Why do they happen?

Human Resources expert Sarah Paul says, “They can happen for various reasons, the result of a downsizing or reorganization, poor performance in a current role or as an alternative to termination.”

Paul says that demotions can happen for a variety of reasons. One of them is the Peter Principle. “A common reason I’ve seen is when a company promotes an employee who is highly effective and technically competent in their current role into a position of management. After some time, it becomes apparent that they lack the skills to effectively manage and take on the more senior or higher level responsibilities.

“For example, they may lack the ability to lead a team, develop and manage budgets, or build credibility with peers. Some people are just better as a do’er than a leader. In this case, the employee would be demoted back to his/her previous role.  Some may welcome this move, while others see the demotion as a personal and professional failure.”

Demotions, explains Paul, should never taken lightly as there are legal issues involved when deciding to demote an employee. While it’s a way to keep a valuable employee, demoting an employee can lead to constructive dismissal when an employee feels that a major reduction of hours, benefits, status or job growth has been adversely affected.

Paul says, “Companies must be very careful when demoting. It is important to manage the situation in a professional, humanistic and legally compliant manner. Demoting an employee in the hopes that she or he will quit is not only unethical, but is also putting the company at legal risk. It’s always a good idea to consult with legal counsel before any demotion because if the process is not conducted properly, it may result in a constructive dismissal lawsuit.”

So how can a company deal with demotions within its staff? As Paul says, it’s about managing the situation in a humanistic and legal manner. “You need to balance the needs of the company with those of the employee. Some ways to minimize risk and make the transition as positive as possible are to explain the rationale to the employee to generate buy-in, keep the salary and benefits comparable to the old position and ensure the responsibilities of the new position do not demean the employee.”

Even then, an employee who doesn’t like or want to be demoted will more than suffer from poor job performance and will more than likely leave the company as soon as possible.

If you’ve been demoted, what can you do to mitigate the circumstances?

Stay Professional

You’re going to go through a lot of emotions and your instincts might be to lash out or criticize. Remain professional as you still have to work at the company or need certain people as references for your next job.

Keep a High Standard of Work

Demotions are not always dismissals. If you need the job, keep up a high level of work. That way you haven’t given them an reason to terminate you.

Ask About Improvement

Does the company want you to improve certain skills before they promote you? While you might want to hide, this could be an opportunity to sit with your boss and have a frank talk. It won’t be pretty but it will be informative.

Document Everything

We’ve said this before but document everything and keep it at home, not on your work computer.

Keep the Job Search Quiet

Your manager and colleagues don’t need to know you’re on Workopolis looking a new job. Be discreet. Your manager may not be surprised by your job search but don’t rub it in anyone’s face.

Lawyer Up

If you think you’ve been constructively dismissed, consult a lawyer for advice.