A job title is more than just a set of words that describes an employee's position. Job titles are often a source of pride for employees, especially when the titles signify positions of authority. Some companies use high-level job titles to recruit and retain talented employees or appease employees when funds are not available for bonuses or pay increases. The right job title can help your company attract a top performer, but creating inflated titles just to avoid giving raises can hurt your reputation as an employer of choice.
Many people are defined by their job titles, especially those who hold executive positions. Mark Kolakowski of About.com calls a job title a "badge of authority." He also says the wrong job title could prevent someone from advancing in an organization or pursuing advanced career opportunities in different organizations. Giving someone less impressive job title than he deserves could also undermine that person's authority with employees, vendors, and clients. The real challenge for human resources professionals is creating job titles that communicate the job requirements of a position without overstating a person's authority or level of responsibility.
During the most recent recession, some employers tried to reward employees with better job titles because they did not have enough money to offer merit raises or performance-based bonuses. This approach has two major risks. One is that employees will see through the inflated job titles and resent the lack of increased financial compensation. Another is that an inflated job title does not accurately represent an employee's duties. This makes it confusing to maintain appropriate compensation systems and consistent job classifications, which could put your company at risk for lawsuits from employees who feel they have been misclassified or compensated inappropriately.
If a title does not accurately describe an employee's duties, the employee may not meet your performance expectations. A good example of this is the recent case against Janice Harry, whose title was director of nursing. Although some people saw her title and assumed she oversaw frontline nursing employees, Harry says she was not responsible for doing so. She is now being accused of failing to staff her employer's wards appropriately and failing to keep the wards clean. This is just one example of how the wrong job title can cause confusion and make it difficult for employees to understand their responsibilities.
If you are responsible for job design or job classification, you must use caution when assigning job titles. The right job title can help an employee understand her responsibilities and make it easier for all of your employees to understand how much authority each person has. The wrong job title makes it difficult to classify employees and creates confusion regarding job duties and required knowledge, skills, and abilities. Giving people the right titles also protects your company against lawsuits and makes it easier to administer compensation and benefits programs.
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