Centura Banks Inc. plans to scrap traditional bank titles this month. Brochures and a video have been prepared to tell the bank's 2,090 employees about the change and what it signifies.
"The idea is that titles create artificiality," said Centura chief financial officer Frank L. Pattillo, who is to lose his designation as "senior executive vice president."
Under the new system, "you are what you are," Mr. Pattillo said. "You might be a 'mortgage originator,' or you might be the 'supervisor of escrows,' but whatever your functional title is, is what you are."
Centura, based in Rocky Mount, N.C., also plans to reduce its current 30 salary grades to nine "bands." Instead of paying employees based on a title, the $5.4 billion-asset company will pay for performance within a wide range in each band. It expects this to encourage people to focus on improving their expertise in particular jobs.
"You have to have more responsible jobs to move up within a band, but it's not a matter of all these title changes to do that," Mr. Pattillo said.
While functional job titles are the norm in law and accounting and consulting firms, the idea remains heresy in banking. When Centura began researching the matter two years ago, it found only two bank companies in the country that had eliminated traditional titles: Cheshire Financial Corp. of Keene, N.H., and Atlanta-based Bank South Corp., which sold out last year to NationsBank Corp., Charlotte, N.C.
Cheshire, which has $901 million of assets, was the first to abolish traditional titles, in 1992. President Peter J. Baxter said the company was in the midst of assimilating several acquisitions and sought a way to create one culture while retaining local control and decision-making.
"We looked at a lot of models and came up with the notion of a team- based organization," Mr. Baxter said. "As we thought through that, we came to the conclusion that traditional bank titles really promote the wrong thing.
"We thought that the hierarchy that tends to force decisions up rather than down didn't work very well for local control. What we really wanted to do was flatten the organizational structure."
Under Cheshire's new structure, all salaried employees were divided into three groups: "banking partners," which includes the top 30 managers; "associates," which covers middle management; and "banking specialists," which is everyone else.
Mr. Baxter said Cheshire discovered that certain legal and regulatory filings required the signature of a vice president or higher. Cheshire's solution, which will be adopted by Centura as well, is to confer the honorific "vice president" on all officers but "only when they have to sign something."
Like Cheshire, Bank South decided to do away with traditional titles without getting advice from consultants or other banks. Former CEO Patrick L. Flinn, now an independent business person in Atlanta, said Bank South had concluded in late 1993 that titles "didn't mean anything."
Both Cheshire and Bank South, which had $7.4 billion of assets when it was sold to NationsBank, reported no serious morale problem from switching to functional titles, although some middle managers chafed at losing their hard-won rungs on the corporate ladder.
"The only reason somebody wants to be a 'first vice president' is, somebody tells them it's important," Mr. Flinn said. "If you're no longer telling them it's important, it doesn't matter."
