Transitioning to a 14-Grade Structure: How to Handle Redesignation Without Demotion?

Transitioning to a 14-Grade Structure

We are a private company with 7 levels of hierarchy in our grade structures. We aim to transition to a 14-grade structure (14 levels of hierarchy) for succession planning and to align with the market scenario. We intend to redesignate employees accordingly. Currently, some employees are moving down the hierarchy by three grades; for example, an employee previously at level X is now at a lower grade, and someone at MG is transitioning to JMG. It's important to note that this is not a demotion, as we have no intention to demote individuals. The compensation and terms and conditions will remain the same.

Seeking Guidance on Redesignation

Can you guide us on the correct approach? What should we include in the redesignation letter? Are there any alternative options we should consider?

Thank you

Understanding Human Psychology in Designations

Please understand one simple aspect of human psychology: designations make a significant difference. The moment a person moves down three grades, they are likely to feel affected and hurt.

Introducing Additional Designations

You might consider introducing designations that are in addition to existing levels. For example, if you have a manager, you could have a senior manager instead of an assistant manager.

Succession Planning Strategy

Succession planning is a strategy for identifying and developing future leaders at your company—not just at the top but for major roles at all levels. It helps your business prepare for all contingencies by preparing high-potential workers for advancement. It's not just about having more designations.

It has been six months since you raised the above post. What is the outcome of adding the levels of the hierarchy? What was the objective of creating the additional layers, and has it been achieved? Did you face any unforeseen problems?

The members of this forum would be grateful if you could share your experience. It would be educational for them.

Thanks,
Dinesh Divekar