In possibly the most radical human resource recast in corporate India in recent times, Tata Motors, the country’s largest auto company by revenue, has decided to scrap its system of designations for its 10,000-plus employees. In a circular issued on Wednesday, the company told employees that the move will create a “mindset free of designations and hierarchy”.
The process will see designations such as vice-president, general manager, regional sales manager, and area manager become history. The new business card of employees will now have their name followed by the function or responsibility — for instance, ‘Sales – Medium and Heavy Commercial Vehicles’.
All managers with a team reporting to them will simply have the job title of ‘head,’ followed by the function or department after their names. Employees who are individual contributors, largely at the front end who do not have any team member reporting to them, will use just the function or department after their name.
According to Gajendra S Chandel, Chief Human Resources Officer, this is part of an effort to create a flat organisation. This reinforces the individual’s responsibility and makes the performance tracking process transparent and simple, he said.
The Executive Committee, comprising Guenter Butschek, Managing Director, and his leadership team of some 10 people, will be the only ones to continue with their designations.
“This was a challenging task and we had a lot of debate on how people would react to the move,” said Chandel.
The company feels the move was imperative, especially when it is banking on optimal employee productivity to meet the growing challenges in its commercial vehicle and car businesses.
“This can only be done when the workforce focusses on the task ahead instead of constantly wondering, ‘I am DGM now; when will I become GM or VP’,” Chandel said.
While the company has made its move, it remains to be seen how people within Tata Motors react, given that designations are a big deal in the Indian context.
The new hierarchical plan comes just months after Tata Motors put in place a new structure reducing the number of reporting layers from 14 to five. The idea was to make people more accountable and send a strong message that the days of taking it easy were over.