Nearly every big company feels that employees must have a grade, that their position must be defined by a number and a title. So in investment banking a new bachelor's degree enters as an analyst, gets promoted (or not) to associate, then vice president, managing director, etc. We have grading systems for scientific and engineering personnel, for managers, for secretaries. Of course, tied to grade is (presumably) accountability and (almost certainly) reward.
Behind these grading systems lie a whole lot of processes, varying by company but always substantial. To start with, you cannot have grades for employees unless you have standards that define and differentiate each grade. Otherwise grade progression just becomes a reward for 'time served'. Revisiting these standards, not once in the history of the corporation, nor every year, but from time to time, helps to refresh our understanding of what skills and competencies we consider to be important.
There are large consultancies, such as Hay Associates, that are very happy to work with corporations on their grading standards. They will promote large exercises in which each grade is evaluated according to various criteria, and points (Hay points) are assigned. The best thing that can be said about such exercises is that they are not a complete waste of time. The point scoring will satisfy some, though not most senior managers. What is worthwhile about such an exercise is that as a consequence of having the debate and discussion, a senior management team can come to a consensus about what it really considers to be important, and about what differentiates.
It can also learn that in some cases there really is no clear basis for differentiation. In BP I saw this at lower levels, where a large number of secretarial grades were ultimately combined into two and at the highest levels where nine senior management grades were combined to three.
There is also process required for determining who is promoted. In some companies it is as simple as a manager going to see her boss and recommending an employee for promotion, a brief chat, a form to HR, and the job is done. I don't think this is particularly useful as process, though it is efficient. If it is worth having grades, and I am not sure it is, then it must be worth investing more time in deciding on movement between them. For this, a management committee must sit regularly, with proper documentation, and discuss promotions.
Through this process, around real employees in the company, everyone learns the criteria and the standards for a grade. This learning in turn leads to much better feedback from managers to employees about their prospects for promotion, or what they need to demonstrate to achieve the next higher grade. It is also a particularly important process for new members of a management team, whether coming through internal promotion or external recruitment, or through acquisitions.
I also favour publicising promotions within the workplace. In BP in the US this was standard, but in the UK no such publicity was done, the feeling being that the promotion was a private matter between the employee and the company. The great value in putting a notice up or sending out an email to announce a promotion, is that it conveys to the entire group the standard that is expected. By the way, it is also a challenge back to the management team making the promotion - will it pass the 'notice board test', that is, will everyone, seeing the announcement, say 'of course, makes sense to me, she did a great job and deserves this' or not. So what we want is not just a notice saying 'Joe Bloggs is promoted to Senior Team Leader' but something like:
"I am pleased to announce the promotion of Joe Bloggs to Senior Team Leader. [what has he been doing?] Joe has been leading the automotive lubes marketing team for the past 3 years, during which time [what did he accomplish?] this team has launched four new products, more than double the rate we have achieved in the past, and [why is this important?] consistent with our objective to move ahead of competitors on product introduction rate. [but we expect more than this at his level] Joe has also been active in promoting BP through more than 20 talks at local high schools. He led the task force on improving our procurement processes. [And for his next act] In his new role, Joe will have responsibility for the expanded industrial and automotive lubricants marketing program that is now in place. Please join me in congratulating Joe on this well deserved promotion."
Now that is a notice that sends messages.
About Leadership:<
About Leadership is a series of 52 columns on corporate leadership -- essential skills, leading teams, managing your career, the strategic and business practices to make a company and its leader distinctive from competitors. These columns will be of interest to people leading small and medium sized companies today, many of whom have not had much formal training in management skills and techniques; for the many people in big companies who aspire to senior management; and for anyone who thinks: Give me a hint, how can I do this better?