Congratulations! You’re (also) A Vice President!

It’s the age-old nonprofit punt: a change in title but not pay. It shows up when there’s no budget for a raise, but we’re applauding a job well done. Or maybe it’s out of desperation, a last-ditch effort to keep someone from jumping ship. Sometimes it comes with more responsibility, but often it’s just a simple name change. We congratulate our new Vice President (and they get love on LinkedIn), but inevitably we made things worse – colleagues are caught off guard, there’s confusion about what’s different, and your new VP still wants a raise (or is still out the door). You were trying to save the day, but now there’s a mess. What just happened?

Titles are a critical management tool, but only when used wisely. Here are our practical best practices to ensure you and your employee get the most out of a promotion:

What’s in a Name? The key to a meaningful title lies in a well-structured organizational hierarchy. Titles should relate to a level structure, share some consistency across your organization, and reflect the actual responsibilities and status. Ensure that every role, from entry-level positions to executives, has a clear place in this structure. This clarity avoids title inflation and ensures that promotions are not just nominal but also represent a true elevation in status and responsibility.

Make Sure you Know Who’s Who. How is a Senior Director different from a Director? It’s not the start of a riddle, but the core reason behind having well-defined competencies. Once you have your level structure in place, outline the qualities needed to perform at each tier. Competencies typically relate to management, communication, strategic planning, and often include expected contributions to organizational culture and DEI initiatives. These competencies make career progression transparent and provide a roadmap for employees seeking advancement. Many organizations engage outside experts to help develop levels and competencies, drawing on broader market norms and best practices.

Be Transparent. A clear salary band structure is essential for budgeting, ensuring market competitiveness and verifying that staff compensation is fair and equitable. While bands set the framework, there's always room for flexibility in your pay philosophy to account for performance, tenure, or geography, and to incorporate incentive compensation like hiring or spot bonuses. While you're at it, be sure to also review current employee compensation for equity across levels, demographics, and tenure (outside consultants for a market analysis can be beneficial since they have a much broader sector-view). It’s a lot of work, but incredibly important, because once established, these bands will provide clarity, ensuring everyone knows where they stand.

Form Follows Function. With a defined structure and clear competencies, employees will know where they stand and what they need to achieve for a raise or promotion. Regular performance evaluations can track progress but be flexible with promotion timing. In dynamic organizations, new opportunities can arise unexpectedly. With a clear internal structure, you can quickly and easily outline a path for internal candidates to new or vacant roles, ensuring a fair and transparent process.

Promoting an employee should be more than just a change in title; it should be a strategic decision that benefits the individual and the organization. When you have clear role hierarchies, defined competencies, equitable salary bands, and adaptable strategies, you’ll avoid common pitfalls and ensure that promotions are meaningful and motivating.