Reduction in rank may refer to three separate concepts:
In the United States, courts-martial may adjudge reduction to any enlisted member to the lowest or any intermediate pay grade. However, a summary court-martial may not sentence a person to reduction by more than one grade.
Article 15 of the Uniform Code of Military Justice (UCMJ) authorizes commanding officers to "in addition to or in lieu of admonition or reprimand" impose "reduction to the next inferior pay grade, if the grade from which demoted is within the promotion authority of the officer imposing the reduction or any officer subordinate to the one who imposes the reduction." Additionally, an officer of the grade of major, lieutenant commander, or above is authorized to impose "reduction to the lowest or any intermediate pay grade, if the grade from which demoted is within the promotion authority of the officer imposing the reduction or any officer subordinate to the one who imposes the reduction, but an enlisted member in a pay grade above E-4 may not be reduced more than two pay grades."
Additionally, article 58a of the UCMJ provides that, unless otherwise provided in regulation, an enlisted member above the pay grade of E-1 sentenced by a court-martial to confinement, a dishonorable or bad-conduct discharge, or hard labor without confinement, shall be automatically reduced to the pay grade of E-1.
In other countries, there is such a punishment, which is sometimes much more severe than that in the US. It usually is assigned for serious crimes in peacetime and wartime.
In the Russian Empire and in the USSR, most often it was a demotion in rank to private. In the Russian Empire to this punishment was added also other penalties such as beatings with whips, which were all the staff. Personnel lined up in formation, then each dealt one blow sentenced. Most often, this has led to the death of the convict from his injuries.
Lieutenant-General Marquis Philip Osipovich Paulucci, being quartermaster general of the Caucasus army, on 3 November 1810, wrote in his diary: "the Tiflis infantry regiment non-commissioned officer Ermolaev, the former in the recruit depot when you split the party on the shelves, took the recruit 5 rubles brazenly. For any impermissible and intolerable service act, reduced thereof in the ordinary non-commissioned officer, require him to drive the rods through 500 people one time, and taken money from him to take away and give to a recruit. Flogging this very same to do tomorrow in 8 hours. This case put the body on view at the end of the Lord to the heads of regiments are strictly watched so that the lower ranks no one had injustices..."
In the USSR, demotion in rank to private begin to see use as a punishment immediately after the creation of the red army. As a rule, it punished those who made unforgivable mistakes during combat, especially those who led to serious losses or tactical defeat. It also punished those who committed serious crimes while serving. In the second case, a demotion in rank was usually not the only punishment administered, and often accompanied an imprisonment or execution. During the second world war, those demoted in rank were not imprisoned away from the front lines but instead made to serve in the penal divisions. After the second world war, the punishment no longer meant execution or service in a penal unit, but did mean dismissal from service and forfeiture of all military awards. Most often it was imposed for serious crimes which entail criminal liability. In modern Russia this post-WW2 version of the punishment is still used.