Is it a demotion to voluntarily take a lower-skilled, lower-paying position after having a supervisory job in the same company?
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It could be considered a voluntary move if the employee applied for the lesser job because it was more commensurate with his or her abilities, or because there was something more attractive about it. If the employee wanted the change, it might not be considered a demotion. But it could be, and most likely would be, considered a demotion if there was some element of coercion to it—that is, if it wasn’t really “voluntary.”
In this situation, as well as in life generally, context is everything. Specifically, the context is (1) the possible consequences if the supervisor does not apply for the lower-paying job (or if he or she does apply, does not get it); and (2) what are the non-pay attributes of the job and the reason(s) the supervisor may wish to apply for it.
Regarding number (2), there’s a widespread assumption that a lower-paying job is less desirable than a higher-paying one, but that’s not always the case. To use an example from educational publishing, marketing jobs paid more than editorial. A marketing manager would make more than even a fairly senior editor. But the marketing manager may not really have the skill set, or for that matter, the desire, to be a marketing manager; maybe he or she would be happier and better at being an editor. In this case, shifting to the lower-paying job isn’t really a demotion. It’s more a lateral move (despite the lower pay) into a position that’s a better fit.
Another example, take the sales industry. A sales manager would usually make more than a sales representative—and also have to work longer hours, travel more, attend more meetings, do more paperwork, and be more accountable. If someone didn’t have the skill set to thrive as a sales manager, “stepping down” to being a regular sales representative might be the best thing for his or her career (and life).
So, without knowing why this person is encouraged to apply for a lower-paying position, and how the duties, responsibilities, and characteristics of the new job stack up to the old one, it’s impossible to say whether it is a demotion or a favorable opportunity. That said, if an employee is encouraged by his or her own supervisor(s) to apply for a job that is a better fit, provides more chances to succeed, and/or makes the employee happier, that’s not a demotion—it’s good management.
That segues into the consequences, or element of coercion. The above-described situations truly are ones where the employee is “encouraged” to voluntarily take a step sideways or even backwards for his or her own good. The implicit assumption is that despite the encouragement, the employee could refuse to apply and could stay in his or her current job. If he or she is not good at it, there may be consequences (up to and including termination) in the future—no reasonable employer puts up with substandard performance indefinitely—but there is nothing immediately in the offering. The employee is not faced with an “apply or be fired” situation.
On the other hand, say it is clear—whether stated explicitly, or otherwise made obvious—that this is the proverbial “an offer you can’t refuse.” If the employee does not apply for (and get) the lower-paying job, then he or she will be suspended or terminated, or forced to take an even-lower-paying or less-desirable job. That is a demotion. If the employee, say, will lose his or her current position or be demoted, suspended or transferred to a non-desirable location, or will face clear negative consequences for not applying, then he or she is being demoted as clearly as if his employer simply told him or her, “Starting Monday, your new job is….”
So if there is coercion and the employee has no choice but to apply for or take the lower-paying job, it is a demotion. If the employee could meaningfully refuse but is being encouraged to apply because it’s a better fit for him or her, then it may well not be a demotion.