I've actually been in HR discussions telling people managers are overrated and we need to value ICs more. It's really difficult to explain to HR people that managing people isn't[1] a higher responsability job than being an expert at doing something...
[1] Of course, sometimes it is. It depends on the team size and seniority, but also depends on the expertise. I'm just saying that a manager does not have to always have a higher grade than a person on his team.
Maybe start by getting rid of the silly term - "IC". What's the difference between a product, project, sales and a people manager? They all manage something.
It's people's egos and lust for power that makes this distinction.
I'm against euphemisms in general and don't think we should be changing this word either.
As I see it, an IC is anyone whose main contribution is through artifacts or other actions they perform directly, and a manager is someone whose main contribution is through coordinating the actions of others. As such, I'm absolutely ok with "project manager" and "product manager" even if people don't report to them directly.
If you have a better term, do go ahead and propose it, but let's not throw out this useful term just yet.
The distinction is useful because people managers have some specific tasks related to HR processes. The fact that the distinction has an ego implication is the problem, not the distinction itself.
Could it be (get ready to crack some eggs as I am about to fry some conspiracy-bacon) an effort by HR/companies to promote sr engineers into managers to then give HR reasons to cull the herd if they need to?
[1] Of course, sometimes it is. It depends on the team size and seniority, but also depends on the expertise. I'm just saying that a manager does not have to always have a higher grade than a person on his team.