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Punishment via promotion

Shyamal Majumdar | August 29, 2003

Remember the delightful cartoon by R K Laxman that showed a senior manager sweeping his office floor and complaining to his colleague how he was paying the price for not reading properly the small print in his promotion letter?

The cartoonist was obviously exaggerating to drive home a point about the goings-on in the executive suite, but quite a few companies use promotion as a tool to punish.

At a time when retirement schemes -- both voluntary and compulsory -- are an integral part of the management lexicon, several companies find punishment through promotions a trifle expensive but trouble-free way to free up critical positions from incompetent incumbents without going through time-consuming labour courts and creating a lot of ill feeling.

Consider the case of these middle managers in one of India's largest public sector firms. The company, which wanted to bring in young faces in crucial management posts, promoted nine of its non-productive mid-level managers to the rank of general manager and posted all of them to the same office in a smaller city.

All these GMs remained frantically busy by drawing up reports and flow charts on a 25-year perspective plan for the company and fixed emergency meetings to confer with one another.

The arrangement suited the cash-rich PSU just fine; the promotees were on an ego trip and the younger, deserving managers moved into the critical positions that they vacated.

Or, take this extreme case of a general manager (production) in a large private sector firm who was promoted as vice-president in charge of overseeing the security systems in the company's headquarters.

All his suggestions to improve the security system were sent by the CEO to the chief security officer for "further study".

The vice-president, however, soon sent an SOS to a head-hunter when the CEO gave him an important assignment: things were being stolen from the office during lunch hour when the receptionist was absent.

The CEO asked whether the vice-president could sit in the vantage position of the visitors' sofa during lunch hour, observe the security lapses and give him an exhaustive report in six months.

Says the consultant whom the vice-president approached for a job: "He had been given a decent increment after his promotion but was now willing to do a job -- any job -- for even half the salary."

Such examples only show that some companies are firm believers in pseudo-promotions, a phrase made memorable by Laurence J Peter and Raymond Hull in their famous book titled The Peter Principle.

There are hundreds of examples galore of pseudo-promotions all over the world.

Sample this: a manager who proved incompetent as office manager was promoted as coordinator of inter-departmental communications, supervising the filing of second copies of inter-office memos.

Another redundant vice president has been labouring for three years to write the company's history. There's more: the entire 82-man staff of a department was moved to another department, leaving the promoted director with nothing to do, nobody to supervise.

Peter and Hull would call it a "hierarchal pyramid consisting solely of the capstone, suspended aloft without a base to support it! This interesting condition is known as the free-floating apex."

The problem, however, begins if an organisation has too many senior people in the "free-floating apex" position. And the reason for this could well be the short-sighted and faulty executive promotion policy that only converts exceptional performers into mediocre or sub-standard managers.

For example, some managements, specially those in creative industries, must move away from rigidly hierarchical structures. Look at Microsoft, which has created a separate status scale for its software engineers who can get higher compensation and external profile than their managers, the basic idea being that managers gain promotion as they take on more people and greater responsibility and software engineers gain in status and pay as they demonstrate brilliance.

A leading management consultant says most companies make the mistake of promoting people for the wrong reasons. For example, he was asked by an exasperated client to find out why so many competent engineers in his company become less than competent managers and soon become perfect candidates either for "a kick upstairs" or termination of service.

The answer, the consultant said, lay in the company's warped promotion policy: engineers were generally selected for management positions for the wrong reasons, i.e. technical competence rather than managerial proficiency.

If the Peter Principle (every employee tends to rise to his level of incompetence) has to be avoided, companies must first find out whether the candidate has the right combination of mental abilities, personal interests and personality traits to allow for success as a manager.

Companies like Microsoft or GE would promote an average accountant as a manager because he has the potential to outperform an outstanding accountant in a managerial position. After all, the goal of a manager should be to get the best results from his staff, not just from himself.

This does not mean that the outstanding accountant should be ignored as the career ladder for him may possibly lie sideways rather than head upward. The old corporate ladder that stretches to the executive suite can't be available for everybody.

These companies also believe that exceptional performers need not be rewarded only by promotions that could only take them further away from the work they like and do well.

The Peter Principle

How 'meritocracy' works in some companies

Peak of incompetence: series of promotions to a level at which you cannot perform -- your level of incompetence

Percussive Sublimation: promotion to a position only apparently further up the hierarchy.

Lateral Arabesque: A new position with a longer title but no hike in rank or pay.

Hierarchical Exfoliation: really competent people are fired as the hierarchy must be preserved at all costs.

Paternal In-step: a family member is placed high up in the hierarchy without any regard to competence.

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