Are too many of your employees locked into the mindset that equates promotion with career advancement? If you don't manage these expectations properly, you'll disappoint your employees and create organizational dysfunction. Check out this advice from Julie Winkle Giulioni about how to handle talent development expectations.
You may be struggling with how to develop the talents of your various team members, especially if you don't have many opportunities to place people into management roles. Leaders can easily fall into the trap of believing they need to give 'rock-star' employees management titles to keep them loyal to the organization. This kind of thinking can result in too many chiefs and not enough workers to get projects completed. In addition, not every 'rock-star' employee is cut out to be a manager. When you act too hastily to promote a person who's not suited for a management role, you'll have two problems to resolve – the improperly-placed employee and the havoc she's wreaking in her department.
It's easy for ambitious employees to think they should be managers, perhaps because they believe those positions will result in more money and prestige. To truly help employees who have indicated an interest in new or better opportunities, first identify their passions. For example, maybe your top coder is eager to learn a new programming language? Instead of promoting her, find a project that will allow her to develop her skills. Maybe she could learn Python and then apply her new skills to creating an add-on to a new project? This kind of project may also require her to temporarily head a team comprised of members from multiple departments. In this case, your team member will get a chance to work on something that interests her and to increase her visibility in the organization.
These kinds of arrangements will require you to invest more management time to track progress and outcomes, but in the long run, you'll have more loyal employees. They'll also know if they are really interested in becoming managers or if they'd rather have the chance to delve into special projects that can significantly impact the organization's bottom line.