Family Business: Mails to my Clients – 3: Avoiding the Designation Trap

Raju Swamy: October 16, 2011

I am prompted to write this based on the imminent induction into your Indian operations of a few employees from your overseas subsidiary. I would also suggest that there should be a Management Policy on Designations: both at the Corporate and Operational levels. A few years ago, the CMD of a client company of mine was extremely keen, in fact determined and desperate, to recruit a particular candidate for a senior technical position. This candidate was just the right fit to fulfill a critical need at that point of time. The interview went very well, except for one issue: the candidate was insisting on a particular designation which rationally could not be conceded to within the present organizational structure. The candidate was adamant, and the CMD was desperate: an extremely negative transactional situation to be in. The CMD gave in and in his frustration, almost shouted: “You can have any designation you want but you will do exactly what I want you to do!” We are confronted by a similar situation many times, and invariably take a short-cut position of „resolving the problem when it arises‟, or „we will cross the bridge when we come to it‟. In this case, two critical managers threatened to resign, one actually left taking along with him two of his assistants. The other could be „bought‟ back. My advice: 1. Plan well in advance for this induction, as well as for future inductions. 2. Don‟t overload the structure to „accommodate‟. 3. Don‟t create compromises: designations are like elastic and if they are pulled beyond the actual job content, they break, or they boomerang, and can hurt. 4. Designations should truly match job content and supervisory boundaries. 5. Designations should not be thrown about as a reward, or a motivator, without back-up content. 6. Designations should not be created under threat. 7. Designations should support the structure, not structure support designations. 8. Be aware of all consequences before you take an „insensitive‟ decision, aimed at meeting a narrow objective. 9. Do not create too many designations. Instead, establish attractive multi-stage salary package structures per designation for performing employees, till they actually reach a stage where a vacancy exists either because of a promotion chain, or because of an exit, or because of expansion. 10. Don‟t make designations „cheap‟ 11. At Senior and Middle levels, better for the Supervisory Board – Governing Council – to take a joint, well-considered decision, in the Group‟s interest.
Raju Swamy Advisor to Entrepreneurs & Family Business PROMAG Consultancy Services, Bangalore, INDIA Promoting

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