Career ladder refers to the vertical growth of the employee in an organization. It refers to the various positions an employee moves to as he grows in an organization. The employee may move vertically most of the time but also move laterally or cross functionally to move to a different type of job role.
Career ladder is used interchangeably with career path.
Most successful companies chalk out a career path/career ladder for the employees in order to provide them with a realistic picture of their position in the coming years in order to retain them. Having a clear idea about future positions and job responsibilities, the employee and the company can work to identify areas where relevant training is required for the employee to build his competencies to fulfil future job requirements.
An example of a career ladder is illustrated below: