Want to make more money and be a better manager? Learn how to properly promote your employees.
Forget about 'good' workers and 'bad' workers. Employees are either good or bad at the job they are currently performing. The world's best personal fitness coach would make a lousy software engineer.
Figure out why the 'good' worker is good. What skills and experience has this employee developed that makes them stand out for a promotion.
Make sure the employee fits the job. Will the employee's new position continue to utilize the skills that got them recognized in the first place? Are you going to enhance your employee's current skills or develop new ones entirely?
Reach the obvious conclusion. Workers that do well get promoted. Until what? Until they get placed in a job they can't excel at. This principle is known as the Peter Principle which can be stated as, "in a hierarchically structured administration, people tend to be promoted up to their 'level of incompetence'"
Always find a way to reward and build loyalty in good employees, even if a promotion isn't the correct choice.