RESOLUTION Foundation, a non-partisan and award-winning think-tank, published the results of a survey in 2012 that indicated that an increasing proportion of people with important-sounding job titles still earn middle pay.

It appears that an increasing number of companies are offering inflated job titles — despite the related job responsibilities or salaries remaining unchanged — as an easy and inexpensive fix to retain and motivate staff.

According to the Harvard Business Review, title inflation is a growing phenomenon in companies and governments around the world.

While this trend is predominantly driven by today’s talent shortage within the job market, companies that award fancy titles could diminish their own credibility as well as create problems for the employee’s future job prospects in the long run.

So why do companies still inflate job titles and how can hiring managers look past these grandiose job titles and reveal the candidates’ true level of expertise and seniority?

 

Earned versus bestowed

According to Cornell University’s Workspan, research shows that a title can compensate for lower pay when it is earned.

In a study conducted by Jerald Greenberg and Suzyn Ornstein, subjects were given a senior-sounding job title that was either earned for good performance or bestowed for no justification.

Titles proved useful as a form of compensation to hold onto those who had earned them as they felt equitably paid and were motivated to perform well.

For those with bestowed titles, performance initially improved but was followed with feelings of overpayment. Their performance quickly declined after a period of time.

Fundamentally, these findings suggest that title inflation could create value for an organisation as it improves employee productivity and lowers operational costs when done appropriately.

 

Varied meanings

Any way you look at it, job titles and their meanings may vary greatly across industries and organisations.

Although job positions are generally standardised at large organisations, titles from smaller companies — where budgets are much tighter — could actually mean very little in accurately depicting a candidate’s duties.

When considering a candidate’s ability and potential, hiring managers should invest some time in researching the companies he has worked at, gauging the respective organisational and reporting structures at each business in order to form a holistic understanding of the candidate’s role in different business environments.

Using this information, hiring managers should always take into account the candidate’s responsibilities as well as his achievements and direct impact on the organisation.

One way to measure these attributes is to look into given key performance indicators at each company to determine his level of responsibility and success in terms of achieving strategic business goals.

Moreover, hiring managers should utilise professional assessment tools that measure various dimensions of the individual — such as performance leadership, change leadership, interpersonal leadership, and personal leadership skills — to effectively evaluate the candidate’s seniority.

Regardless of job titles, candidates will carefully review both the advantages and disadvantages of each job offer to decipher whether it truly meets their needs.

The Harvard Business Review reported that senior executives typically evaluate an employment opportunity by three categories: the company, the job, and the compensation.

Interestingly enough, how each of these factors are weighted depends on the executives’ age, seniority, where they are in their life cycle and how much personal wealth they have acquired.

Generally speaking, executive-level candidates highly value working for a successful company that shares the same values as they do and is well positioned for the future.

With reference to the job itself, candidates want to have opportunities for career advancement and personal development.

All in all, senior executives enjoy a wide array of employment options, and job titles only make up a marginal part of the equation.

 

Article by Ati Simatupang, head of South-east Asia, Bó Lè Associates, an executive search firm in Asia with a well-developed network of 16 wholly owned local offices. For more information, visit www.bo-le.com