Wether a demotion is due to circumstances or by self-inflicted behavior the result is the same. I have been climbing out of the demoralizing hole of a demotion for the past year. I will be the first to say that it creates many challenges from ego to reputation. It has been an up hill battle, and takes twice as much effort then someone who hasn't gotten themselves in this predictament. It becomes a challenge of both reality and perceptions.
The first step is to separate your bruised ego from who you are. It is important to remember that you are not your job. Take the time to look at who you are besides your job.
If you do get demoted do not think you have no power with your boss. Negotiate to not take a salary decrease but possible just a title demotion. You would be surprised at how this works.
Let your boss know you are willing to change, and want the opportunity to progress and become a contributing member of the team.
Most important remember you are a good person, and make sure to find outlets outside of work so that work does not become your only focus of attention.
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