Meaning of Succession Planning
Succession planning is described as having the right sample in the right place at the right time. More specifically, succession planning or continuity of leaders is the ongoing process of identifying future leaders in an organisation and developing them so they are ready to move into leadership roles. This process includes reviewing the organisation’s strategic plan, studying the current workforce, forecasting future trends, and developing employees in a structured plan to replace leaders as they retire or depart from the organisation. At simplest, it is the determination of who will fill a job when it falls vacant.
Definition of Succession Planning
According to Cheryl Zimmerman, “Succession planning is concerned with getting the right number of people with the right skills, experiences and competencies in the right jobs at the right time”.
According to Wendy Hirsch, “Succession planning is a process by which one or more successors are identified for key posts (or groups of similar key posts) and career moves and/or development activities are planned for these successors. Successors may be fairly ready to do the job (short-term successors) or seen as having longer-term potential (long-term successors)”.
According to Bohlander and Snell, “Succession planning is the process of identifying, developing and tracking key individuals for executive positions”.
Characteristics of Succession Planning
Characteristics of succession planning are as follows:
1) Broadening Experience by Lateral Moves
Traditionally, people would have gained experience through vertical career advancements, which were often accompanied by boosts in both status and salary. Nowadays that may not be possible, because organisations are less hierarchical, with fewer management layers. Sometimes, people may feel they have no choice but to take a sideways move to a new position, even if it doesn’t come with extra pay. Traditional fast-tracking often creates high expectations for career progression. If people are mainly motivated by factors such as status and financial rewards, it may be necessary to explore alternative approaches for building commitment.
2) Roles, Not Jobs
In the past, people used to advance towards particular, frequently specialized, occupations. Now (although some jobs will always require specialized expertise) the main focus is on identifying and developing groups of jobs to facilitate the identification of potential successors for a diverse range of roles. So jobs might be clustered by role, function and level so that the generic skills necessary for each role can be developed. The aim is to develop pools of skilled people, each possessing adaptability and the ability to assume multiple roles. Because succession planning is concerned with developing long-term successors and short-term replacements. As a result, each pool of candidates will be significantly larger than the number of positions it encompasses.
3) Links with Business Planning
Those responsible for succession planning must possess comprehensive knowledge regarding the future trajectory of the business. This includes understanding the potential changes that may occur and how these changes could impact various aspects, such as the numerical figures involved and the requisite skill sets. Certainly, establishing such a relationship is no simple task. However, it does imply a close relationship at a senior level between top managers responsible for shaping the future of the organization, and the HR function, which serves as a facilitator. Thus succession planning helps in making links with the plans of the business.
4) Balance between Individuals and Organisations
Succession planning considers not only the organizational requirements but also the growing recognition that people men, as well as women, increasingly need to make their own career decisions and achieve a work-life balance. So the emphasis is on balancing the aspirations of individuals with those of their employing organisations, as far as possible customising moves to meet the needs of employees, their families and the changing skill necessities of the organisation.
Many organisations have developed frameworks for technical and generic competencies, which pertain to a wide array of desired skills and behaviours. The assessment process linked to generic frameworks, particularly for management competencies, can provide a useful starting point for evaluating an individual’s potential for a senior role. Thus, it is important to integrate succession plans with the existing competency frameworks.
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Objectives of Succession Planning
Objectives of succession planning are as follows:
1) To Help Employees Realise their Career Plans
Succession planning also helps employees realise their career plans for the future. Every individual sets career goals for themselves over the next few years, and succession planning mechanisms help employees achieve their goals within the same company.
2) To Build Leadership Potential
Organisations tend to build leadership potential through the process of succession planning. Leadership potential can be identified during on-the-job training where senior managers have ample opportunities to engage with both managers and employees. This leads to the identification of individuals who demonstrate exceptional leadership qualities and possess the potential to excel in leadership roles.
3) To Handle Voluntary Separation
When an employee decides to take another job, it represents a voluntary separation. Companies need to be prepared for such scenarios, where one or multiple employees may choose to take a voluntary break from the organization. To handle this situation the company needs to train a competent staff capable of providing support to current employees and ensuring the seamless functioning of the business operations.
4) To Maintain Organisation Performance
Succession planning can help an organisation maintain its performance during uncertain times. Organisational performance is dependent on the realisation of the long-term strategic business goals of a company. Achieving these goals requires thorough planning for business continuity during challenging circumstances.
5) To Improve Employee Morale
Succession planning is a popular tool used to enhance employee morale and to motivate them to perform better in their current jobs. Many companies identify various positions for which current employees within their organization that are suitable for their existing employees, and subsequently provide them with training as a precautionary measure. Succession training may include rotation in various departments; this means the company needs fewer employees to hack up more positions and the employee gets a higher chance of being promoted early.
Types of Succession Planning
Types of succession planning are as follows:
Individual-based succession planning involves first identifying people already working for the organisation who have a high potential for advancement. Once an individual has been identified, the organisation focuses on helping to develop that person’s skills. Part of that involves allowing him to take on tasks that help him gain experience in utilizing new and more intricate abilities. In addition, the organisation needs to focus on retaining talented individuals with potential for advancement.
In pool-based succession planning, the organisation focuses on a large number of people, or groups of people, who possess the potential to assume various management positions, if not all. There are two types of pool-based succession planning and external pools.
Role-based succession planning is a strategic approach that aims to identify and develop potential successors for middle and upper-level managerial positions within an organization. This is especially helpful for positions that significantly contribute to the success and growth of the organization. Planners start with replacement planning for the Chief Executive Officer (CEO), then for each manager who reports to the Chief Executive Officer (CEO) and finally for each manager who reports to those managers. That allows them to follow several paths. Organizations have the option to either identify the desired qualities in potential replacements for specific positions or they can identify individuals within the organisation and begin grooming them for those positions.
Process of Succession Planning
The Process of succession planning includes various steps as shown in the image:
Pre-planning serves as the transition from design to implementation during which HR prepares those who will play key roles in leadership development. Pre-planning includes explaining the underlying goals of the process to business leaders, conveying accountability to business leaders, and training participants on the organisation’s succession-planning process. Human resources (HR) should focus on creating a culture that fosters an environment where managers feel comfortable identifying high potentials, rather than being threatened by them. Top-performing organisations recognise and reward managers for building great leaders and seeding the organisation with this talent. Managers in those organisations understand that their success is based on their ability to do this effectively.
Keeping in mind the leadership competencies established, managers must ask themselves who has exhibited the performance and potential to become the future leaders of the organisation. Managers should begin by creating a profile of each employee, documenting the person’s career history, strengths, accomplishments, and developmental needs, and rating him on both performance and potential. To ensure consistent application across the organization, it is important to develop a rating system for assessing potential, as it can often be a subjective determination.
Managers utilize individual profiles and ratings to create a performance and potential grid which enables them to accurately position their team members within the corresponding quadrants. At that point, management begins to consider what kind of development may be best to maximise each individual’s potential
3) One-on-one and Group Meetings
To minimise subjectivity, it is important to elicit input from a variety of people on the organisation’s high potential and how each should be developed. These discussions can take place between HR professionals and business leaders, or among direct reports. Together, the participants should review the high-potential profile, as well as the performance and potential grids of each future leader. These discussions will facilitate the development of replacement charts reflecting each key position, potential successors, and their current state of preparedness. For further confirmation that the identified high potentials are the right future leaders of the organisation, business leaders may hold group sessions in which they review and debate the findings with superiors and colleagues. The goal of such sessions is to bring business and people issues together and determine whether there are any gaps, issues, or concerns.
4) CEO Discussion
A series of discussions should be facilitated between individual business leaders and the chief executive during which he reviews the designated high potentials and their developmental opportunities within the organisation. The more a CEO provides the necessary resources, such as time and/or money, to leadership development, the more influential the organisation is in developing leaders.
5) Ongoing Review
Even when a pool of successors has been chosen and is being developed, the succession planning process is far from over. The process remains fluid as leaders move into top positions and new talent joins the ranks, while others leave the organisation for other opportunities. It is essential to conduct regularly scheduled reviews on a quarterly, semi-annual, or annual basis, although replacement charts and development plans may need to be updated more often. The rapidly changing marketplace means organisations must prioritize the continuous updating of their talent lists. They must always understand the depth of their talent pool, identify potential candidates for key positions, and determine the next steps for nurturing their most promising leaders. Without this intense focus, organisations face the risk of not having the right talent available to fill key roles or, worse. of losing a high-potential leader because he sees better opportunities elsewhere.