Before you fill that new position with an existing employee, review her qualifications.
What should you do if an employee wants to move into a new position but doesn't have the right qualifications? First, show her the job description and the specific qualifications you're looking for. Point out any qualifications you believe she doesn't have and ask her if she agrees with your assessment. Listen carefully to her response. Perhaps she has additional qualifications you are not aware of that would give you cause to reconsider your decision. If she still doesn't seem qualified, provide her with some ideas on what she can do to improve should the position become available in the future.
Excerpted from Attracting & Rewarding Outstanding Employees