Chapter 9. Succession Management. Learning Objectives
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1 Chapter 9 Succession Learning Objectives After reading this chapter, you should be able to: Understand why succession management is important Trace the evolution of succession management from its roots in replacement planning, comparing the two models with respect to focus, time, and talent pools List the steps in the succession management process 2010 by Nelson Education Ltd. 2 Learning Objectives After reading this chapter, you should be able to: Compare and contrast the job based and competency based approaches to aligning future needs with strategic objectives Discuss the four approaches to the identification of managerial talent Describe several ways to identify high potential employees 3 1
2 Learning Objectives After reading this chapter, you should be able to: Evaluate the advantages and disadvantages of the five management development methods Recognize the difficulties in measuring the success of a management succession plan Outline the employee s role in the succession management process Describe the limitation of succession management, and propose some possible solutions to these limitations 4 Importance of Succession Succession management the process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization 5 Evolution of Succession Replacement planning the process of finding replacement employees for key managerial positions 6 2
3 Evolution of Succession Replacement planning has evolved into succession management by: Broadening the focus Expanding the time horizon Creating a talent pool of replacements Improving the evaluation system 7 Reasons for Succession 1. Provide opportunities for high potential workers. 2. Identify replacement needs 3. Increase the talent pool of promotable employees 4. Contribute to implementing the organization s strategic business plans 5. Help individuals realize their career plans 6. Tap the potential for intellectual capital 8 Reasons for Succession 7. Encourage the advancement of diverse groups 8. Improve employees ability to respond to changing environmental demands 9. Improve employee morale 10. Cope with the effects of voluntary separation programs 11. Decide which workers can be terminated 12. Cope with the effects of downsizing 13. Reduce headcount to essential workers only 9 3
4 Succession Process The process involves 5 steps: 1. Align Succession Plans with Strategy 2. Identify the Skills and Competencies Needed to Meet Strategic Objectives 3. Identify High Potential Employees 4. Provide Developmental Opportunities and Experiences 5. Monitor Succession 10 Step 1: Align Succession Plans with Strategy Organizations must start with the business plan Using environmental scanning, managers try to predict where the organization will be in three to five to ten years 11 Step 2: Identify the Skills and Competencies Needed 1. Job Based Approach 2. Competency Based Approach 12 4
5 Job Based and Competency Based Approaches Job Based Approach focus on duties, skills, job experience, and responsibilities required to perform the job Not adequate since jobs change rapidly Competency Based Approach focus on measurable attributes that differentiate successful employees from those who are not Hard and soft skills Produces more flexible individuals 13 Types of Competencies 1. Core competencies 2. Role or specific competencies 3. Unique or distinctive competencies 14 Step 3: Identify High Potential Employees Organizations use several approaches to identify managerial talent, including the following: Temporary replacements Replacement charts Strategic replacement Talent management culture 15 5
6 Step 4: Provide Developmental Opportunities and Experiences Peter Drucker states that: Most managers are made, not born. There has to be systematic work on the supply, the development, and the skills of tomorrow s management. It cannot be left to chance. 16 Development Methods Promotions Job Rotations Special Assignments Formal Training and Development Mentoring and Coaching 17 Promotion Promotion an employee s upward advancement in the hierarchy of an organization 18 6
7 Job Rotations Job rotations a process whereby an employee s upward advancement in the hierarchy of an organization is achieved by lateral as well as vertical moves 19 Mentors Mentors executives who coach, advise, and encourage junior employees 20 Step 5: Monitor Succession Corporations with strong succession management programs are higher performers in revenue growth, profitability and market share HR metrics can be used to help monitor succession management 21 7
8 HR Metrics for Succession Increased engagement scores Increase positive perceptions of development opportunities High potentials perceptions of the succession management process Higher participation in developmental activities Greater number involved in the mentoring process 22 HR Metrics Lag Measures Increased average number of candidates Reduced average number of positions having no identified successors Increased percentage of managers with replacement plans Increased percentage of key positions filled according to plans Increased ratio of internal to external hires Increased retention rates of key talent Increased percentage of positive job evaluations Increased number of bosses as talent developers 23 Employee Role in Succession Advantages Invites employee participation Gain employee commitment to and ownership of the plans Limitations Elitism Risk of the spotlight Selection bias Unpredictable futures 24 8
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