Promotion within the Foreign Service is different than the private sector. You aren't promoted just on doing a good job - you are promoted based on continuously proving you are/can work at a higher level AND there is a slot open in at the higher level for you.
Here is how it works. For IMS, we all come in at a Grade 5 Step whatever. In 1 year, you are administratively (ie automatically) promoted to a 4. Then you get in line and wait to be promoted to a 3 (then to a 2, then 1, etc). Every year all State Department Foreign Service officers submit what is called an EER (Employee Evaluation Report). EER's are different, in that you write about what you did. Then your supervisor (called a rater) "rates" you. Hopefully he or she will say how awesome you are and you deserve to be promoted. Then another section has a "reviewer" write about you. For IRM, usually that is the Management Officer but depending on the Post and your position it could be the IPO, IMO, DCM. Who knows. Again you want them to say how awesome you are and you deserve to be promoted.
All of our evaluations are due each May. So from March - April everyone is frantically writing, and rewriting their EERs. Then it is submitted to an internal (Embassy) panel for review. Basically they are looking for grammatical errors, things that are inadmissible, etc. Once panel approves it, your EER goes off to Washington. Each summer the Department convenes the Promotion Panels. It's a group of about 4-5 individuals who look at hundreds (thousands) of EERs. I've heard they only have about 5 minutes to read and make a decision. So it all comes down to how well you write and convey what you've done for the past year (why you are the most super awesome person in the world and deserve to be promoted). If you pass the first round, they put you in the pile to be reviewed again. If you are in that pile they go back and read it a bit more carefully, and the board can even go back and look at previous EER's. As I mentioned above, there are only so many promotion slots. So you want to be the best shining star you can be.
Last year, I didn't even make the bridesmaids list. The bridesmaids list (not an official term) means the promotion board liked what they saw but you didn't make the final cut. In years past making the bridesmaids list got you an MSI, or Meritorious Service Increase (ie more money). Now the MSI is a separate process. Being a bridesmaids means you get bidding privileges and a "way to go" pat on the back. Last year I was mid-ranked, meaning I was doing my job right but not to the point of promotion.
The promotion results usually come out the Friday of Labor Day weekend. If you are in a different time zone than Washington, you usually find out you got promoted (or not) from friends sending you emails/texts etc. This past Friday night Deb and I were watching tv. About 1045pm my time I glanced at my phone and saw an email from a colleague who is in Washington. I know this person doesn't email a lot, so I was intrigued. I opened it up and there was the "congratulations" email! Next thing I know the congrats started flowing in.
So now what? Well the 03 grade (for IRM) is the "sweet spot" when it comes to overseas Posts. There are lots of opportunities out there. However, for those wanting to move up the 03 can also be considered "the wall". Making that jump from 03 to 02 can be challenging, and take a long time. But for now, I will just enjoy the moment.
Onward and upward....