Cafe Classic - It's Only a Title, Right?

Editor's Note: Today's Café Classic post was first published on December 1, 2009 -- but it touches on a timeless problem and raises an eternal question.  Are job titles really free?  A smart, no-cost way to reward employees when hard dollars are in short supply? 

Or might you really be buying yourself a problem down the road?

Take it away, Chuck!

A client once asked why a Senior Accountant (non-exempt) reported to an Accountant (exempt).  This same company used the title “supervisor” to describe individual contributor positions and it was not uncommon for Managers to report to Managers and Directors to report to Directors.

Given that these situations occurred in a large and presumably sophisticated company, one might ask - what’s the big deal, and is anyone being harmed?  Advocates say that offering an employee a special title is a harmless and inexpensive reward, one that doesn’t raise employer costs.  It also improves morale.

I don’t think so.

Source of the problem 

• Managers grant esoteric titles to those for whom they have limited means of reward.  “I can’t give you the increase you deserve, so let’s change your title to xxxxx”.  Like greasing a squeaky wheel for a short term fix they want to do something to keep the employee quiet

• Employees are given opportunities (titles) where none should exist - like the Secretary / Administrative Assistant promoted to Office Manager, while performing the same role?

• As a salve to employees a “special” title is used because the position (usually clerical) is considered so different from other jobs that it needs to be specifically identified.  Special titles can also be seen as reflecting on the importance of the managers themselves.

A bitter harvest

Let me explain what you can expect from planting these problem “seeds”.

• Role clarity (job duties, business impact, decision-making, etc.) behind questionable titles becomes blurred.  This in turn generates more confusion as the company creates Senior Managers and Group or Area Directors and other in-between titles to differentiate the “real” jobs from inflated titles.

• When attempting to determine market competitiveness the less accurate the title is in relation to the work performed, the more likely your analysis will be skewed.  Benchmarking unique, employee-specific and inflated titles hampers an accurate assessment of your competitiveness.

• Those with inflated titles will expect the perks or privileges that accompany the title, and their absence could cause difficulties.  It’s an awkward conversation when you tell an employee that the import of their new level in the organization is “title only”.

•  Inflated titles can be a detriment to incumbents as well, such as the “Director” who now only qualifies as a “Manager” with a prospective employer.  These employees have limited opportunities outside your company because other employers would be reluctant to hire someone where the title is lateral or even backward to what they currently hold.  The result could be that mediocre performers remain with your company.

• The natural extension of inflated titles is inflated grades / salary ranges, as the bogus “senior” position would be placed in a higher grade than the “intermediate” position.  This practice will increase your fixed costs without a corresponding rise in either performance or capability.

• Employees will not like giving up inflated titles.  Thus employee relations / morale issues will likely develop if you try to correct poor past practices.  You may have to develop creative “buy out” scenarios or grandfather employees.

What to do

If you are in a situation with inflated, redundant and confusing job titles, what steps can improve your lot?

1.   Organize a cleaning exercise: start with the low hanging fruit by eliminating all unoccupied titles

2.   Accompany that initiative by implementing tighter authorization procedures before a “new” title is created.  This would cut off the flow of new problems even as you address the core incumbent issue.

3.   The company would need fewer job descriptions if the wording was more generalized.  Standardized titles would clear away much of the role responsibility confusion.

The general nature of duties for most clerical positions (filing, record keeping, secretarial, forms processing, correspondence, etc.) lends itself to standardization - which in turn makes it easier to transfer employees without having to “promote” someone when their title changes.

Bear in mind though, that title standardization makes more sense in a conference room than it does during an employee discussion.  A “Senior Depository Research Clerk” sounds more important than a “Clerk III” or even “Senior Clerk”.

Fewer titles provide greater role clarity for your organization, improved accuracy in assessing pay competitiveness, more control of labor costs and higher morale as employees know where they stand and what they must do to succeed in your organization.

A final caution: be careful of setting up titles without occupants "in case we want to promote someone down the road".  Guess what?  You will.

Chuck Csizmar CCP is founder and Principal of CMC Compensation Group, providing global compensation consulting services to a wide variety of industries and non-profit organizations.  He is also associated with several HR Consulting firms as a contributing consultant.  Chuck is a broad based subject matter expert with a specialty in international and expatriate compensation.  He lives in Central Florida (near The Mouse) and enjoys growing fruit and managing (?) a clowder of cats.

Comments

[Dave Johnston]

I worked with a large grocery chain in the UK that found 126 job titles in their stores -- each with its own pay rate (our favourite title: "Hot Chicken Assistant"). Our job evaluation process reduced the number of titles (and pay rates) to 28, but only after extensive discussions with works councils.

With so many Anglo-Saxon surnames being job titles (e.g., Farmer, Cooper, Baker), it's no wonder people place so much emphasis on a job title!

[Jacque Vilet]

I have seen several companies that have that many or more by using the Hay evaluation system each with their own salary range. So unnecessary in my opinion.