In spite of these merits, this system also suffers from certain limitations. They are:
1) The assumption that the employees learn more relatively with length of service is not valid as this assumption has reverse effect. In other words employees learn up to a certain age and beyond that stage the learning ability of the cognitive process diminishes.
2) It denominates the young and more competent employees and results in employee turnover particularly among the dynamic force.
3) It kills the zeal and interest to develop as everybody will be promoted with or without improvement.
4) Organizational effectiveness may be diminishes through the deceleration of the human resource effectiveness as the human resource consists of mostly undynamic and old blood.
5) Judging the seniority though it seems to be in the theoretical sense. it is highly difficult in practice as the problems like job seniority, company seniority, zonal/regional seniority, service in different organizations, experience as apprentice trainee, trainee, researcher, length of service not only by days but hours and minutes will crop up.
Thus the two main basic of promotion enjoy certain advantages and at the same time suffer from certain limitations. Hence, a combination of both of them may be regarded as an effective basis of promotion.