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This is probably the weakest part of my game so maybe I shouldn't talk, but the people who seem confident about their skill when it comes to this will point out that they spend a fair amount of time deciding exactly what level of minors their players should be at based on their stats and ratings.
Personally, I don't have much desire in doing that and I now play with only 1 level of minors, but it makes sense at least. If a player is doing well at a level, promote them to a level that is more challenging. If they're not performing well then either leave them where they are, demote them, or (especially if they're a little older) release them to give more playing time to players who may play better.
Another thing to do is to crosstrain them. Maybe they're not good enough offensively at a position like 1B, but they're plenty good offensively at 2B.
If doing all that seems like way too much then you can set the AI to control the promotions/demotions, like I do, and/or pick the top few prospects and only manage their promotions/demotions. Just make a note (shortlist?) of which ones they are so you don't have to constantly go through the process of deciding which to control.
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