As can be seen during the meeting of Kansas City Mafia executives in the first episode of the season their organisation is very corporate. They have a "business plan" for the takeover of Gerhardts and present it on slides:
Based on that it's obvious that they utilise not only thugs and hitmen, but also office workers. Mike's arguable promotion is a transfer from the field into a desk work. He's still a part of the organisation, but now has different responsibilities.
The rationale behind this action is not explained. Maybe the KC Mafia leaders really appreciate his work, maybe they think he's in fact too good and see him as a potential threat or maybe he was just a pawn, controlled all the time.