What Is A Designation In A Company? A Comprehensive Guide

By Indeed Editorial Team

Published 15 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Organisations set up structured practices and processes to facilitate good communication and excellence in operation. A business title given to an employee, also known as a designation in a company, is important for defining an organisation's structure and an employee's position within that structure. Understanding what a designation is can help you understand a company's hierarchy and set long-term career goals. In this article, we answer "What is a designation in a company?", explain the hierarchy of designations, discuss how companies make these decisions and explore some common designations.

What is a designation in a company?

To find the answer to "What is a designation in a company?" it first helps to understand that it describes a specific job title. Companies assign designations or titles 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 senior employees and management staff engage with people outside the organisation, their designation gives them credibility. Designations can influence opinions and help employees win clients and customers for an organisation.

For example, the designation 'senior manager- accounts' may indicate that the employee manages a team of accountants. The designation CEO implies the employee is a top-level decision-making authority of a company. The designation 'associate software developer' may show that the employee is a fresher who works as a developer.

What is the hierarchy of designations in a company?

The typical designations in a pyramid-style organisation structure, belong to either top management, middle management or lower-level management. Some common designations under each category are:

  • Top management: chairperson, president, CEO, executive director, managing director, COO, CFO and vice-president

  • Middle management: general manager, plant manager, area manager, director, branch manager and senior manager

  • Lower management: supervisor, manager, assistant manager, section head and team lead

Some smaller companies and start-ups who may not prefer rigid structures opt for a lesser hierarchy with fewer designations separating the executive staff from the management staff. For example, in some companies, the head for each function like marketing, sales, finance or technology may directly report to the CEO without involving senior managers, directors or vice presidents.

Related: What Is Corporate Culture? (Definition And Different Types)

How do companies choose designations?

Their designation within a company can create a professional identity for employees. While some companies use traditional titles, some may coin new titles to reflect a progressive philosophy and work culture. There are no strict rules for creating designations within the hierarchy of a company.

Some professionals may even hold multiple designations within a company. A chairperson or a founder-president may choose to be the CEO of a company if they take part or involve themselves in the daily operations of the company. A director and a vice-president share similar roles and responsibilities, and a company can choose to use either title based on their organisational structure.

What are some common designations in a company?

Companies give a designation to every employee. Company staff may perform clerical, executive or managerial duties. Some companies may use innovative titles for common job roles, though the roles may not be any different from traditional titles with typical job responsibilities. Some of the most commonly used top-level designations in a company are:

1. Chief operations officer (COO)

National average salary: ₹5,90,960 per year

Primary duties: Chief operations officers manage the day-to-day operations of a company and work closely with the CEO, keeping them updated about significant developments. COOs usually have many years of experience in implementing business policies and processes that are vital for running an organisation smoothly and seamlessly. They inform employees of the standard operating procedures to be followed to achieve organisational goals. In some companies, a COO may also manage several human resource tasks in addition to day-to-day operations.

2. Chief executive officer (CEO)

National average salary: ₹44,976 per month

Primary duties: Chief executive officers are employees at the top of the chain of command of an organisation. In some companies, the founder may choose to use the designation of a CEO. In some companies, the board of directors, the president, or the chairperson may appoint a CEO after a selection process, usually involving multiple rounds of interviews. CEOs oversee every aspect of the company's operations and are responsible for the sustained success of businesses.

Some CEOs can take independent decisions regarding all crucial matters, while some may consult with a board of directors, chairperson, owner or president before taking crucial decisions. CEOs are crucial for an organisation, as they motivate and enable employees to achieve the organisational goals of the company.

Related: What Is A CEO? Definition And Career Advice

3. Director

National average salary: ₹62,625 per month

Primary duties: The board of directors, CEO, or chairperson can appoint a director for company operations. The director of a company handles the day-to-day operations, including the financial operations of a company. Directors ensure that all employees and departments carry out business operations as per the rules and regulations of the company. A company can hire directors for each of its functions, like marketing, sales and production. Directors may report to superiors, like an executive director or a vice-president, depending on the hierarchy within the organisation.

4. Chief compliance officer

National average salary: ₹9,68,641 per year

Primary duties: A chief compliance officer is an executive who ensures that a company is complying with necessary legal and regulatory codes applicable to its operations. They may also draft and establish internal policies. They work with management staff and employees to assess and manage regulatory risk. The chief officer is the head of the compliance department and coordinates the auditing of internal procedures.

5. President

National average salary: ₹10,00,145 per year

Primary duties: The president of a company may be the founder or an executive appointed by the founder or the board of directors. They take the major decisions that affect the company, like defining long-term strategy, vision, financial management, expansion, takeovers, mergers, partnerships and collaborations. In larger organisations, a president implements corporate goals with a more hands-on approach, and they deal directly with the entire workforce.

6. Chief financial officer (CFO)

National average salary: ₹75,569 per month

Primary duties: Chief financial officers or CFOs manage the overall financial performance of a company. They prepare budgets, create fiscal policies, facilitate the financial planning, analyse financial situations, identify opportunities and propose action plans to fix issues. They are also responsible for managing the accounting and finance divisions of a company. Their role requires them to ensure that different departments prepare accurate financial statements to avoid discrepancies.

7. Chief technology officer (CTO)

National average salary: ₹11,81,721 per year

Primary duties: Chief technology officers manage the technical aspects of a company's operation. They may drive a company's growth by updating analogue processes into digital ones or increase efficiency and streamline routine processes using technology. They facilitate innovation within a company, by updating platforms, digital tools, technology and services used by employees. For example, in an IT services company, a chief technology officer may manage how the company staff develops and implements technological solutions for clients.

Related: What Is a CTO? (Job Duties, Salary and Requirements)

8. Vice-president

National average salary: ₹12,31,468 per year

Primary duties: If the company's organisational structure has a president and a CEO, the third-highest designation is that of a vice president. The vice president usually reports to the CEO or the president. If the president is the head of an organisation, the vice-president is the second most crucial designation in a company and is usually in line for promotion to the role of president.

A company usually appoints a vice president to guide a specific function of a company. For example, a company may have a vice president each for their marketing, sales and human resources department. Each of the vice presidents may report directly to the CEO or to the president.

8. Human resources director

National average salary: ₹14,77,911 per year

Primary duties: A director of human resources plans, oversees and enforces guidelines and policies for hiring, training, onboarding and retaining employees. They work with other department directors to understand staffing needs and work with the CEO to coordinate and budget recruitment functions for a company. An HR director may collaborate with other departments to design training programs for new recruits. They design compensation and benefits plans for employees based on the company's budgets and financial policies. In addition to routine duties, they also identify and implement procedures that optimise productivity and reduce attrition.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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