One of the major reasons people quit your organization is poor supervision.
Who should you promote to a supervisory role?
As with people, don’t be in a hurry to promote someone just because the org chart says you need a supervisor. The slack can be picked up in the interim, and maybe you step in a bit.
First, technical knowledge is one criterion, but only one. Many companies promote on technical knowledge alone. Don’t promote on seniority, unless you’re a union shop and have to. Seniority doesn’t have much to do with the ability to do the job. Don’t trust your gut in promotion, because your gut is usually wrong.
Second, the new supervisor has to have skill in managing people. Have him/her take a DISC test (tests for various personnel traits) before the final offer is made. You might even discuss with the people supervised: “Could you see X in a supervisory role?” The downside of this approach is that it tips your hand as to who you’re going to promote.
Third, the new supervisor, especially in a small company, has to think like an entrepreneur and contribute ideas—not just show up.
Fourth, there have to be, in a small company, leadership qualities. Think: could you see the person running your company someday? After the break-in period, is he/she up and around, talking to direct reports?
Fifth, it doesn’t make much difference if he/she gets along with you, the owner. However, differences should be settled between you privately, not in the open. Some differences are healthy. Can you imagine Elon Musk as a supervisor at PayPal, before he left to start Tesla? Must’ve been fun.
Sixth, don’t expect the world of the new supervisor right away. It will take time (generally around 90 days) for him or her to settle in and find out what his or her real leadership style is. His/her leadership style might not be the same as yours but could be equally effective. If the supervisor is overseeing routine operations, he/she can supervise more people than he/she could with software programmers. A counseling session somewhere in the training period is a good idea.
Seventh, don’t give the selectee all the promotion money at once; increase their salary by maybe 50% of the total when announced and the remaining 50% after six months or so. Supervisors can and should be on a probationary period.
Lastly, don’t be scared off promoting anyone by all the things you should think about in promoting. Remember, if you get it wrong, people will quit, and that costs you money.