19 February 2009

Pinto's Point

In lieu of pay, how about an empty title?

By Jim Pinto

Let’s discuss the subject of the hierarchical labels often substituted for monetary rewards.

In lieu of money, there are companies that simply have a great proliferation of confusing titles: Banks are the most prolific and creative with the liberal distribution of titles—Senior VP, Executive VP, Vice President, Asst. VP, Junior VP, etc. Of course, down the ladder, substitute the word Manager, instead of Vice President.

In most manufacturing companies, one climbs up the hierarchical ladder via a succession of titles: Supervisor, Manager, Director, Vice President, Senior Vice President, Executive Vice President, and President. In Europe, the title Director is reserved for members of the board of directors; in the U.S., this is simply a title above Manager but not quite a Veep. Of course, one could always add the prefix “Asst.” to any of the above titles, as a differentiator to those who are conscious of such things.

There are companies that have Vice President of Human Resources (clearly showing that human resources are more important at that company, since this person is not just a plain old “Manager” of Human Resources). And the same applies to Quality and IT—the honorific Vice President is added on to show these people have access to decision-making power at the highest levels. Some even name Vice President of Strategic Planning, or Vice President of Innovation, as a means to hire a senior person who was Vice President somewhere else, and would not consider joining without that extra honorific tagged on.

In Sales & Marketing there is an interesting, though confusing hierarchy. Vice President, Marketing may perhaps be considered a tad higher than Vice President, Sales. Of course, some sticklers for the finer points insist the “Senior” be added, to demonstrate a clear hierarchical advantage. Naturally Senior Vice President, Marketing should be higher than just a plain-old Vice President, Sales. But, does Senior mean the person gets paid more? Or is entitled to more profit-sharing? Or a bigger bonus? At these higher levels, they tend to be very secretive about who gets paid what. In most instances, titles give no indication at all of pay-scales.

Then the Vice Presidential hierarchy advances. Would the Vice President of Finance be equal to, higher than, or lower than the Vice President of Marketing? Of course, the extra Senior could be added, to clarify the pecking order.

Finally, at the top of the pyramid, one gets the titles Chief Operating Officer (COO), and Chief Executive Officer (CEO) tagged on, to be more explicit regarding status in the executive chain-of-command. For example, the President may be just the COO, with the title CEO reserved for the Chairman of the Board, the ultimate supreme commander.

As a consultant, futurist, speaker, and author, when I am asked for my title, I usually respond with “Supreme Commander.” I mean, why should I settle for anything else?

Related links:

• The Relevance of Employee Titles
  http://www.entrepreneur.com/humanresources/article48776.html
• What’s in a Job Title?
  http://www.inc.com/magazine/20060701/handson-managing.html
• InTech e-News - Performance-based compensation:
  http://r.listpilot.net/c/isa/1edj9a6/l7ca

Behind the byline

Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.