Frequent transfers affect productivity of employees as the employee would take some adjustment time to new department, place, etc.
Also he may not be capable of performing the new role.
Limitations of internal sources :
(i)No fresh talent Recruitment from internal sources does not bring fresh talent into the organisation.
(ii) Lethargic employees When employees are sure of time-bound promotions, they become lethargic.
(iii) No competitive spirit Competitive spirit among the employees may get hampered. .
(iv) Reduce productivity When employees are transferred frequently to different jobs, it results in reduced productivity.
(v) Not available to new enterprises A new enterprise cannot avail the benefit of this source.