Promotion Dilemma

Designations and titles play a significant role in professional life. Every job comes with a title, often referred to as a designation. When a person joins an organisation, they expect to progress in their career. However, many people mistakenly assume that career progression only happens when their designation changes. This change in designation is often called a promotion.

In government organisations, promotions are typically tied to tenure and involve changes in designation, even if the role remains largely the same. Similarly, in many private organisations, promotions are also understood primarily as changes in titles, without significant changes in responsibilities.

The Psychology Behind Title Changes

In certain cultures, especially in India, there is a pseudo-satisfaction associated with getting promoted, often just by receiving a new title. For example, a Manager might be promoted to Senior Manager without any real change in their role. The new title on their visiting card boosts their social status, even though the nature of their work remains unchanged. Society tends to value these titles without necessarily understanding the responsibilities behind them.

I once met a young professional from a service organisation who gave me his visiting card. It said, "Regional Manager," and I assumed he was responsible for a large regional territory. However, when I asked him about his area, he explained that in his organisation, they referred to specific city areas as regions. There were almost 50 "Regional Managers" in that one city alone!

Do Designations Improve Engagement?

Does merely changing a designation improve employee engagement? The answer is unclear, but many people are undeniably attracted to fancy titles. In industries like banking, services, and BPOs, titles like AVP (Assistant Vice President) are common. A friend of mine worked as an AVP in a well-known BPO in Pune, but he still had to work shifts. After a year, he moved to a manufacturing company as a Manager-HR, despite having held a more impressive title before.

It is common for candidates to negotiate for higher titles. A Manager might want to be a Senior Manager, and a Senior Manager might want to be an AGM (Assistant General Manager). They often overlook the actual role and job description. For example, one organisation might have a DGM (Deputy General Manager) with limited decision-making power, while another might have a Manager, with substantial authority. Many multinational companies (MNCs) have flat organisational structures where job responsibilities play a more significant role in career development than titles do.

Role-Based Organisations

A role-based organisation is one where responsibilities and tasks are defined based on roles rather than traditional job titles. In such organisations, the focus is on the specific roles needed for the organisation to function effectively, and employees may take on multiple roles or shift roles based on the organisation’s needs.

Many organisations are now transitioning to role-based structures instead of designation-based ones. Roles define the actions and activities employees must perform to align with organisational goals. For example, if someone approaches customers and sells products, they are in a sales role. If they lead a team of individual contributors, they are a Sales Team Leader. If they manage multiple team leaders, they are a Sales Manager. Roles are clearly defined, but when someone stays in the same role for several years, they often expect a promotion.

However, in a role-based structure, if a new role (such as Team Leader) is not available, the organisation might offer "progression" instead of "promotion."

Levels or Bands

Management hierarchy levels, or bands, are defined based on job evaluations. Several methodologies, such as Hay’s Job Evaluation or Mercer Job Evaluations, are used to assess these levels.

Factors considered in job evaluations include:

Complexity of the Job Role: How complex is the role?

Business Impact: What is the role's impact on the business?

Span of Control: What is the size of the team and business the person manages?

Revenue: What is the business size of the group where the person works?

Other Factors: Innovations, strategic interventions, and other unique aspects of the role.

Ramcharan’s leadership pipeline model:

Tools like the Ram Charan Leadership Pipeline Ladder are also used for leadership development, guiding individuals from individual contributor roles to enterprise manager roles like CEO or MD.

The Leadership Pipeline model by Ram Charan outlines six key transitions or "passages" that leaders must navigate as they advance in their careers. Each passage involves developing new skills, time applications, and work values. The first passage is from managing oneself to managing others, requiring a shift from individual contributions to team leadership. The second is from managing others to managing managers, where leaders must delegate and coach second-line managers. The third is leading a function, focusing on strategic thinking and cross-functional collaboration. The fourth transition involves leading a business, requiring accountability for business results and external factors. The fifth passage is leading a group, where a leader oversees multiple businesses, focusing on synergy and resource allocation. Finally, the sixth transition is from group leadership to enterprise leadership, where leaders shape the organization’s vision, culture, and long-term strategy on a broad scale. Each transition demands new capabilities and mindset shifts to be successful.

Application of the Leadership Pipeline to define the career path.

Ram Charan's model revolves around the idea of a "Leadership Pipeline," which is a series of steps or transitions that leaders go through as they move up in an organisation. However this also can be used as a foundation for career development and therefore levels and bands.

Each step or level in this pipeline requires different skills, time management, and values. The same can be used

Why It Matters?

Each job role requires a different approach to leadership. What works at one level might not work at another.

Progression vs. Promotion

Progression: Consider a Sales Executive who has been working for three years. S/He might have aspirations and need some form of reward. S/He is the best sales executive, but his/her manager is unsure of her/his team management skills, and there is no vacancy for a Team Leader. In this case, the person can be designated as a Senior Sales Executive with the same responsibilities but with added tasks like acting as a team leader in the absence of one or training other team members. Here, the person stays in the same band, but his/her salary increases, and his/her job is somewhat enriched.

Promotion: A promotion typically refers to upward movement within the organisational hierarchy. It usually involves a change in job title, increased responsibility, and higher compensation. In the example above, if the Sales Executive takes on the responsibilities of a Team Leader or if the Team Leader takes on the responsibilities of a Sales Manager, this is a promotion. It is an upward movement to the next level or job band.

Impact on Compensation

Job levels or bands are linked to compensation ranges. The salary range for a particular band is determined based on internal parity and market benchmarks. In progression, the salary change may be modest, but in promotion, it generally involves moving to the next level with a corresponding salary increase.

What if the person stays in the same band for too long and reaches the peak of his/her salary range?

This situation, known as stagnation, can be frustrating for the employee. Employee should proactively seek new opportunities within or outside the organisation. In some companies, if a person reaches at salary peak within a band, s/he may not receive further salary increases. His/her salary may be frozen or given as a lump sum. This is also a signal that the employee needs to move to a different role.

Career development should not be confused with simply climbing the hierarchy. True promotions involve increased responsibilities and a higher level of impact on the business and not mere title change. Meanwhile, progression allows employees to grow within their roles, often a small title change within the same level, ensuring they continue to contribute effectively to the organisation. If progression stagnates, employees might seek new opportunities either within or outside their current organisation. Manager and HR should proactively should start the conversation to help employee find out new opportunities within the organisation.

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