Job titles are important. A proper job title explains the nature and level of work performed by the employee holding it. In the same way that a customer may exclaim, “I’d like to speak with a Manager” – there is an expectation about the role one plays in an organization based on their title. In this example, the expectation is to speak to someone with decision-making authority.
Title creep or title inflation happens in every industry no matter the size or age of an organization. The most common scenario is that an organization will invent new titles or new levels to existing titles in attempt to reward specific employees or attract a specific candidate. The circumstances that create this ‘need’ are many: limited growth opportunities, uncompetitive starting wages, ineffective salary ranges, small annual pay increases, employees reaching the maximum of their pay range, an employee demanding a promotion, high turnover rates, wanting to reward loyalty, etc.
Actually, most of those reasons are money-related. An organization either doesn’t have the money and an inflated title is the trade-off or the organization’s hands are tied in giving more money unless they create a new title (which then creates a new pay range).
Titles are free
In the first instance, the assumption is that a title promotion is cheap or even free. In the short-term, that may be the case. In the long-term, it may hurt more than it helps. To start, titles are emotional. They are often tied to our identities and reflect our worth – or, at least, society will assume your worth based on your job title. Some people will aspire their whole lives to reach a certain ‘level’ in their career and that achievement can be cheapened by inflating titles, both for that employee and for adjacent employees. This is because a job title indicates the pecking order in an organization. Like the Receptionist alternatively titled as the “Director of First Impressions” – those inside and outside the organization might be confused or even frustrated to learn the person in that role is not actually a Director. Further, if title inflation is a widespread practice and everyone is a Director, then no one is a Director. If it’s an isolated circumstance, you risk creating cultural issues in which employees might perceive the ‘promotion’ as unfair treatment.
In the reverse, if you were trying to hire a candidate that inflated their past titles on their resume, you would be given an unfair representation of their skillset. Therefore, inflating a job title beyond the intended role (or skillset) is doing the organization, and the employee, a disservice.
Inventing a new job class
Every organization has that one employee that seems to be the glue holding everything together. A lot of times it’s the same employee that has been with the organization for so long that they’ve seen it all, they know where everything is, they know how to do everyone’s job… what would we do without them? Maybe this employee maxed out of their pay range, asked for a promotion, threatened to quit, is talking about retirement or something of the sorts. Whatever the reason, there is a sudden urgency to get this employee more money. With the right pay policies in place, managers will have their hands tied (and organizations will be protected) from providing employees with what may look like preferential treatment when it comes to doling out cash. The most common work around: create a new job class!
What’s the harm in creating another level of Maintenance Worker when this employee has more experience than everyone else combined? Surely that qualifies for a higher-level of pay, right? Not necessarily. When the job is the same and the pay is different, you’ll run into pay equity compliance issues – even if the job title is different. There are several alternative pay programs that can be used to reward longevity, continued education, special skills, etc. that won’t put the organization in jeopardy.
Clear is kind
To conclude, job titles impact pay. The bigger the title, the bigger the pay. Perception, which might be more expensive than pay, is also impacted. Research shows that employees are more satisfied and more effective at work when they know where they stand. In general, this means the employee knows what is expected of them, knows how they (their job) directly impacts the organization and they know what boxes to check to move up the ranks. Adding misleading or inflated titles to the mix can blur those lines by making career progressions unclear, the alignment of pay unclear, and it may create confusion about the purpose or authority of the position in question. Any of these issues can lead to turnover, poor productivity and affect morale.
Consider the following job title best practices:
- Select titles that are politically correct; avoid titles that imply sex or age
- Consider aligning titles to counterparts in the marketplace
- Refrain from inflation, ensure the nature and level of work is easily understood
- Don’t overthink it; keep it simple!
For more information, or to learn how Baker Tilly’s classification and compensation specialists can help your organization, contact our team.
