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Job Grade Restructuring · Grade Simplification and Unified Titles

Job Grade Restructuring and Title Simplification

📂HR & Labor⏱2-min read📊Practitioner🔗7 related

What is job grade restructuring?

In one line
An HR system overhaul that cuts multi-tier grades (staff, assistant manager, manager, deputy general manager, general manager) and unifies titles. Grade, rank, role, and title each mean something different, so design them separately to keep the pay and promotion systems moving together.
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⚡ Summary in 3 lines
  • First, separate grade, rank, role, and form of address
  • Disadvantageous changes need majority consent under the rules of employment
  • Offer a growth ladder in place of promotions

The first thing that changes in a grade restructuring is how often promotion happens and what it means. Cut five levels to three, and the promotions a person experiences at the company fall from four to two, so the time each promotion takes and the pay step it carries both grow. The starting point is to separate four concepts. Grade is the tier of pay and qualification, rank is the name of that tier, role is a function such as team leader or division head, and form of address is how people are called. If you only switch the form of address to '-nim' and leave the other three untouched, the restructuring changes only the name tags.

There are three types. Simplification reduces the number of grades; title unification keeps the grades but standardizes titles; and job-grade conversion swaps grades for job levels. Simplification widens the pay range inside each merged grade, so pay bands and the merit increase matrix must be redesigned together. Title unification costs less, but senior employees without a management role can easily feel they have lost their place, and sales and purchasing staff who deal with outside parties lose the title on their business cards, which makes client interactions awkward. If cutting grades lengthens anyone's promotion tenure or lowers their pay cap, it becomes an unfavorable change to the work rules and requires majority consent.

For training managers, the restructuring changes the framework of newly promoted training and tiered programs. Five tier-specific programs shrink to three, and role-based training is separated from grade-based training. The new team leader program has to be restructured to run when a role is assigned, regardless of grade. The promotion program that used to run after the December–January promotion round may see its participants double in the first year of the unified grade, so budget for it in advance.

Three things tend to go wrong in practice. First, the unified forms of address are announced, and three months later 'Manager Kim' is still heard in meetings, so the policy exists only on paper. Second, once pay that used to rise automatically with seniority within the unified grade stops, mid-tenure employees' pay expectations drop, and if this is not explained, turnover rises. Third, nothing signals growth to fill the gap left by fewer promotions. Unless you offer other ladders alongside, such as role assignment, job enlargement, and expert tracks, a reputation as a 'company without promotions' will reach the hiring market first.

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💡 In plain English
Cutting ten steps to five makes each step taller, and without new handrails along the way, people give up on the climb.
Why it matters in practice
Fewer job grades change the framework for promotion training and level-based training, and first-year participant numbers can double. Know this before you draw up next year’s training plan.
Origin and sources

Multi-tier job grades took hold in Korean companies alongside seniority-based HR. From the 2000s, as firms moved toward flatter organizations and job-based HR, grade simplification and unified titles spread, mainly among large corporations. It has no single theory or founder; it is an overhaul method refined in practice.

An example

Consider a hypothetical case. Company A, a cosmetics distributor with 540 employees, used six grades from staff to department head. Average time to promotion had grown, and the backlog for deputy general manager promotion exceeded 70 people. This July, the CEO ordered the company to cut grades to three and unify titles in time for next January’s personnel changes.

  1. The head of HR split grade, rank, role, and title into a single table for the executive meeting. The head of sales asked to keep an external-facing title, saying 'if the title Manager disappears in front of clients, we look like new hires.'
  2. Grades were grouped into three levels (Associate, Professional, Leader), with external titles kept on business cards. The labor attorney advised adjusting the pay bands so that the pay ceiling for 48 deputy general managers, whose time to promotion lengthens after the merger of grades, would not be lowered.
  3. After six briefing sessions, the work rules amendment passed with 81% approval. The training team merged five promotion programs into two and split out a new team leader program, which now opens when someone is assigned the role.
  4. Two months after unifying titles, a check of meeting minutes showed that the Korean title for department head (“Bujang-nim”) still came up in more than 40% of references. After the CEO changed their own title first at an executive meeting, it fell to 12% a month later.
  5. One year after the overhaul, the promotion backlog fell from 70 people to 0, and of the 24 graduates of the new team leader program, 9 had been selected regardless of grade. Mid-career turnover dropped from 11% to 9%.
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Last updated 17 Oct 2026 · Reviewed by John Kim

FAQ

The communication climate may change, but if grades, pay, and promotion stay the same, it is a restructuring in name only. Even if unifying titles comes first, there should be a schedule that follows it with grade and compensation design.
Job grades and promotion criteria are matters for the work rules, so they must be amended. If anyone ends up with a longer promotion tenure or a lower pay cap, the change counts as unfavorable and requires consent from a majority of employees, so get a labor-law review at the design stage.
Many companies keep an external title separate from the internal grade. Business cards keep titles that clients recognize, such as manager or general manager, while internal pay and promotion run on the unified grade.
You need to offer ladders that are not promotions, such as appointments to a role, job enlargement, an expert track, and project leader roles. Redesigning training from rank-based to role-based is part of that signal.