How to Choose Titles for Business Purposes
Changing titles in large companies is a process you should take very seriously. Generally, titles include a description of a role of the unit or manager in a business. As an image to customers, the title should be functionally appropriate along with being legally accurate. Alice Rein, writing for Startup Nation, says, "Job titles have taken on more importance for many reasons. In 2004, the Fair Labor Standards Act clarified overtime pay for 'blue-collar' workers, but many hourly and salaried professionals were left wondering if their job titles exempted them from overtime."
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In a blog for Business Knowledge Source, Rein emphasizes that "business titles really do matter" for the following reasons:
1. They give some organization to any business management team.
2. They help people to understand who is in charge of what areas.
3. Some people may not be motivated to run the whole company, but will want to run a part of the company.
4. Generally more authority demands higher wages. Titles can determine rate of pay.
5. They tell employees, other managers and customers where to go to for help or with concerns. -
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Titles should be apportioned by function. If a department is responsible for accounting, it should be titled the accounting department. If it is more general in nature, it should be called the finance department. The manager should be the chief financial officer (CFO). Other titles would include vice president, finance (if a board member, too); accounting manager; finance department manager; and payroll manager. These titles specify the role or job function. By assigning a functional title, customers and employees know what the department is and where they should go to deal with problems or assignments. If you're an owner considering a title change, determine the function before coming up with the title.
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Small companies may have an organizational structure in which one or more people wear several hats. Budget restricts the number of employees and the functions they perform. As the business grows, management must be more clearly defined, and structure becomes an important element of communication and supervision. The owner must be able to delegate responsibilities to managers who accomplish tasks through their departments and teams. Titles for employees who wore several hats may become more focused. An office manager who handled a variety of clerical duties may now become any number of things under the company's expanded structure: the manager of administration with human resources, accounting and payroll, mail services, reception, clerical assistants, facilities, computer and office equipment or janitorial departments. Supervisors or managers of new departments may be added as needed to supervise the teams of workers hired to perform the increased workload.
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Prepare a functional organizational chart regardless of the size of your business. Consider lines of communication and supervision. Create titles for each position you can envision. In the book "Protecting Profits in Any Economy," this procedure is described as "building your infrastructure for change."
Prepare job descriptions for the positions you intend to fill, even if one employees has to wear several hats until you can hire more people.
Hire personnel or promote them into positions as needed, assigning the appropriate title for the position.
If the job description changes, review the title to determine whether it is still appropriate.
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