Promoting an employee(s) is an exciting time for your business—you’re finding your future leader(s). Despite this, employee promotions come with challenges. A Gallup study shows that companies fail to promote the right person 82% of the time.

This can often be the case when companies promote employees for the wrong reasons or at the wrong time. Many times, companies also offer the wrong kind of promotion. The most common kinds of promotions are merit-based, which are competitive promotions based on skill, performance, knowledge, hard work, and qualifications.

However, there are also time-scale promotions, which are based merely on seniority; accretion of duties (increase in workload); ad hocism (meets the needs of crucial times or situations); and merit-cum-seniority promotions (balance between merit and seniority).

Considering the various forms of employee promotions and the needs of your business, it’s understandable to need  guidance on when to promote your employee.

Here are five signs it’s time to promote an employee.

Emotional Intelligence

While emotional intelligence doesn’t speak to the performance of an employee, it does provide great insight as to how someone would perform as a leader. As a high-level employee who needs to manage a team, it’s important to be able to understand the behaviors of teammates.

In a Career Builder survey, it states that 75% of hiring managers said they would promote a high emotional intelligence worker over a high IQ candidate.

Great leaders provide the tools, training, and culture to help their employees do their jobs better and achieve their goals.

If you have an employee who can effectively manage burnout, disgruntled employees, and influences outside of the workplace, it may be time to promote.

Ability to Lead, Not Manage

Just because someone is given the title of manager doesn’t mean they can successfully lead a team. Strong leaders will inspire, educate, and adapt in sticky situations. Those who manage without leading can add stress to a team that already has plenty of other concerns.

A leader must be selfless—they need to invest in the careers of their teammates because they are focused on the betterment of the company, not themselves.

A workplace learning report by LinkedIn shows that 94% of employees would stay at a company longer if the company invested in their career.

Promote your leaders.

Willingness to Learn

There is always something to learn. This is true for your employees who are taking the next step in their career.

The Peter Principle states that employees are promoted based on their skills in their current role, not their future role. If this is true for your employee promotion, the employee must be patient, yet driven to learn as much as they can about their new position.

If the employee doesn’t want to harness as much knowledge as they possibly can about the role, the  company’s mission, and all aspects of the work their team does, they’ll have an increasingly difficult time managing those below them.

Current Role is Too Easy

Although an employee promotion shouldn’t be based solely on performance, it does play a big part in the decision.

If you have an employee who always meets deadlines, completes work that exceeds expectations, and volunteers for opportunities, they may be ready for a heavier workload. Volunteering demonstrates leadership aptitude. Leaders are proactive, and proactive people don’t wait to be told what to do. They’re already doing it.

Furthermore, high-performing employees typically drive their own career advancement. If an employee approaches you seeking more responsibility, you should consider assisting their career advancement with a promotion.

In an effort to determine which employees are performing at a high level, use an employee evaluation template for fair judgments.

Your Company Culture is Positively Impacted

Among the important considerations for an employee promotion, the way they impact your company culture may be one of the most under-considered.

Optimistic employees who buy in to the company’s culture and lead by example with their positive mindset to their teammates will help in your retention efforts. A study shows that approximately 32% of employees strongly agree that they can be their authentic self in the workplace.

Considering your employees spend most of their time working, they should have a leader that promotes authenticity and positive attitudes. If you are still struggling to determine which employee deserves a promotion, consider working with a professional employer organization (PEO). As experts in the human resources field, a PEO can provide great value when it comes to making backend decisions for your business.