Filling vacancies from within the Organisation have some merits as well as demerits . Merits of Internal Sources of Recruitment: 

The following are the advantages of internal sources of recruitment: 

• Simple and Economical: The process of selection and placement becomes very simple and economical. 

• No need of Training: There is no need of induction training. 

• Motivation: Motivates the employees to improve their performance. 

• Promotional Avenues: Promotional avenues lead to establishment of industrial peace. 

Demerits of Internal Sources of Recruitment: 

Internal sources of recruitment suffers from the following demerits : 

• Fresh and more Talented Stock: The scope for the entrance of fresh and more talented stock is reduced. 

• Promotion: Surety of promotion makes the employees lazy. 

• Lack of Competition: It reduces the feeling of competition among the employees. 

• Frequent Transfers: Productivity of an organisation is also affected by frequent transfers.