Hi,
Companies assign designations based on an employee's qualification, area of expertise or work experience. The designation conveys an individual's role and position to other employees within an organisation and to third parties. When a Senior employee or Manager engage with people outside the organization, their designation gives them credibility. Designations can influence opinions and help employees win clients and customers for an organisation. Grades/Designation are very important so as to get things done from subordinates. Cadre / Grades are Company specific.
In many Companies there might be some senior employee who will be working on Supervisory roll for very long time though he/she deserves for promotion, due to lack of requirement or internal politics so it doesn't mean that employee is incapable. If the employee possess the right skill, technical knowledge and good in man management skills then he /she deserves for the position.