Effective Succession Planning

Published Date: 02 Nov 2017

Byham (2001), Chowanec and Newstrom (1991), Heinen and O‘Neill (2004), Hilton (2000), Mercer (2005) and Olsen (2000) identified talent management as a collection of typical human resource department practices, functions, activities specialist areas such as recruiting, selection, development, and career and succession management.

Talent management has been described as a "mindset" by (Creelman, 2004) and tools for a key component to effective succession planning by (Cheloha & Swain, 2005). However, according to (Redford, 2005), talent management is an attempt to ensure that "everyone at all levels works to the top of their potential". (Jackson & Schuler, 1990; Walker, 1980) believe that the "talent management as architecture" analogy best describes the vision of early proponents of managing talent and offers a systems-level, strategic perspective that makes the talent management concept one that adds value and opens new research possibilities. Talent management is simply a matter of anticipating the need for human capital and then setting out a plan to meet it (Capelli, 2008).

Talent is critical because it is the role of a strong human resource function to manage everyone to high performance (Buckingham and Vosburgh, 2001). From the viewpoint of Cunningham (2007), there are two main strategic choices available when considering talent management that are aligning people with roles and aligning roles with people. There are four main factors in relation to the aligning people with roles that are selection, recruitment, placement and promotion; learning and development; succession planning and career guidance. It is the assumption that there are agreed roles and the aim is to align people with roles. While, under heading of aligning roles with people, this strategic arena is based on taking the people as fixed and adjusting factors in the context of the organization.

Stuart-Kotze and Dunn (2008) agreed that talent is not just about having the brainpower, the knowledge, the experience, the skill or the mental and physical characteristics to do something currently, it is also about to do something different or a higher order of difficulty and complexity in the future. One of the outstanding characteristics of human beings is their ability to adjust to changing circumstances.

The earliest attempt to explicitly tie business strategy to human resource management was made by (Tichy, Fombrun & Devanna, 1982). They outlined types of strategies organizations may adopt and the organizational structures (functional, decentralized, etc.) and human resources management practices (selection, development, etc.) that best support them. In essence, (Tichy et al., 1982) encourage HR departments to become more strategic by understanding the business strategy of the organization and restructuring both the HR organization and practices to support it.

Jackson and Schuler (1990) elaborated by outlining how the HR planning activities (assessing HR demand and supply, implementing programs and evaluating outcomes) might be linked to organizational variables (e.g. the organization's strategy, life cycle stage, competitive environment) over several time horizons.

Talent management is an important element to an organization that simply cannot be overlooked. If the organization does not understand the importance of this element, the organization might be wasting their time and money spends for the investments on their employee. There are various purposes that the organization needs to develop the talent in the organization such as maintaining the talented employee can lead to high performance workplace, employee will enjoy the feeling of personal growth and satisfaction that comes from the opportunity to develop their skills and to ensure that the organization can always produce a higher productivity.

2.2 Skill Utilization

By the term skill utilization, we mean "the degree of match or congruence between an individual’s skills and the opportunity to use these skills in that individual’s work role" (O’Brien, 1980). The topic of skill utilization has received relatively little attention so far in the literature, a notable exception being (Green, McIntosh and Vignoles, 2002).

According to Scottish Government Social Research, skills utilization is about warranting that the most effective use of skills in the workplace is to maximize performance through the collaboration of a number of key agents between employers, employees, learning suppliers and the use of a HR range, working practices and management. Effective skills utilization seeks to match the use of skills to business demands and needs.

The Scottish government has noted that effective skill utilization is about confident, motivated and relevantly skilled individuals who are aware of the skills they possess and know how best to use them in the workplace that provide meaningful and appropriate encouragement, opportunity and support for employees to use their skills effectively in order to increase performance and productivity, improve job satisfaction and employee well-being, and stimulate investment, enterprise and innovation. (Scottish Government, 2010).

In addition to looking at skills supply and demand, skills utilization by employers (or the way that skills and knowledge are applied in the workplace) is becoming an increasingly important issue. Local development organizations are confronted with the growing complexity of measuring local skills, identifying and forecasting future skill needs and assessing skill utilization, given the increased mobility of labor, diversity of employment relationships, work practices and the pace of change driven by new technology and globalization. Robust information systems are needed to diagnose needs, make right policy choices and measure if policy is bringing results. (OECD, 2010).

The 1986 Social Change and Economic Life Initiative (SCELI) Survey, the 1992 Employment in Britain Survey and the three subsequent UK Skills Surveys (1997, 2001 and 2006) offer many useful insights (Felstead, Gallie, Green & Zhou, 2007). Respondents were asked about the qualifications required to get the job, the length of training required, and the time taken to learn to do the job well. As noted above, the surveys also sought to examine the skills demanded of workers in their job by asking employees to rate the importance of particular activities such as the ‘use of computers’, ‘dealing with people’, ‘analysing complex problems’ and ‘planning activities.’ The surveys found that there had been a rise in demand across a range of generic skill domains up to 2001 which has since slowed down, and, in the case of ‘number skills’, ‘technical know-how’ and ‘problem-solving skills’, has leveled off altogether (Felstead et al. 2007).

To develop an employee talent, organization must fully utilize their worker’s skill to maximum. Sometimes, a motivated employee wants to contribute to work areas outside of his specific job description. The particular department also needs to identify the skill-sets of each employee and effect a job re-design to ensure that the job description provides opportunities for employees to apply their relevant skills. Different people have different skill sets and enthusiastic employees will want to be able to apply these various talents to help benefit the organization in any way they can.

2.3 Effective Succession Planning

Making sure that there are enough suitable people to step into any significant role as it becomes vacant or is created; motivating and developing them to adapt to the new role as fast as possible, with the minimum damage; and ensuring that every role is a learning resource, in which the incumbent can develop not only skills relevant to that job, but the capability to embrace different and/or larger jobs (Clutterbuck, 2005).

Some consider it similar to the royal line of succession to the throne – planning who will be the next senior team. For others it spreads wider and deeper in the organization – helping people cross-skill so there is a well-equipped pool of suitably experienced talent for internal recruitment. For some it is more of an organization-wide strategy that is focused on ensuring the organization is ‘‘future-proofed’’ – it will have the right skills in place to be able to grow and perform in a future that is increasingly unpredictable (Hills, 2009).

According to Wikipedia.com, succession planning is a practice for developing and identifying internal employee that has the potential to fill a higher position in the company. The effective succession planning can ensure that the increases the availability of capable and experienced employees that are prepared to assume these responsibilities and roles when the position is available. An effective succession planning also can make sure that the organization does not lack of talent to fulfill the vacancy in the organization. It will also make the organization well prepared for expansion, loss of key employee or organizational redesigns.

Succession planning and management includes replacement planning; however, it also involves the development of leadership capabilities with an emphasis on change and teamwork (Groves, 2003; Karaveli and Hall, 2003; Leibman, Bruer & Maki, 1996). Rothwell (2010, p. 12) explained: It is proactive and attempts to ensure the continuity of leadership by cultivating talent from within the organization through planned development activities. It should be regarded as an important tool for implementing strategic plans. Management of principal succession It is important to note that replacement planning overlaps with succession planning and management. Most organizations implementing successions planning and management programs include replacement planning as a critical strategy. Organizations responding to a survey revealed the top five reasons for having succession planning and management programs (Rothwell, 2010). In Rothwell’s study, increasing the pool of potential successors was identified as the top reason for having a succession planning and management program. Increasing the talent pool was followed by contributing to the organization’s strategic plan, increasing the opportunities for high-potential workers, and developing training needs based on probable replacement needs. It is apparent that organizations feel strongly that succession planning and management serves a vital role in the development of people, strategic planning, and providing opportunities for organizational members.

According to a survey carried out amongst 100 HR Senior Managers, HR Professionals’ top three challenges for 2010 are employee retention, succession planning and supporting and sustaining their business’ leadership. Whilst employee retention has always been named in previous surveys as one of the top three HR’s priorities, this year’s inclusion of succession planning let it transpire the importance HR recognize to long term growth and stability. (Longo, 2010)

The problem is that 70% of the managers participating in the survey claimed they won’t have additional resources to support business leadership, 32% are expected their budget will be reduced this year, whilst a measly 18% are expected their budged will be raised. A considerable 50%, if anything, consider their budget will remain stable. Whilst succession planning could represent the basis for a firm having the talent assuring its future growth, strategic succession planning could couple this aim, with retention and development of organization’s best talents. Many HR Professionals, in fact, are showing a certain degree of concern in retention terms, considering the next economic recovery. So that, best talents need to be engaged and motivated before they even consider to leave. Organizations that will be successful on retaining talent and deliver appropriate succession planning will be the ones which will recover better and in a shorter period of time. (Longo, 2010)

2.4 Mentoring

The word mentor used today usually means, a one-to-one relationship between an experienced person and a less experienced person (Okurame, 2005).

Mentoring is a term generally to describe a relationship between a less experienced individual, called a mentee or protégé, and a more experienced individual known as a mentor. Traditionally, mentoring is viewed as a dyadic, face-to-face, long-term relationship between a supervisory adult and a novice student that fosters the mentee’s professional, academic, or personal development (Donaldson, 2000).

Mentoring models vary according to different organizational context and there is no one best model to fit the needs of all organizations (Ismail, 2009).

Mentoring is also used by organizations to develop employees professionally as well as to develop more loyal employees. Further, mentoring has been a great success for many organizations that have mentoring programs.

Many studies of small business mentoring draw heavily on established definitions by Clutterbuck, Kram, Ragins and others, (Kent, 2003) in an attempt to "pin down" a process which can take many different forms, in different contexts. Phrases such as "a wise and trusted counselor", or "sounding board" abound, and mentor roles from "leader" through "teacher" to "buddy" (Kent, 2003).

Hiltrop (1999) mentioned that developments in the employee market have been forcing companies to think of new ways to attract, retain, motivate, and develop talented people. In finding an answer to the question of how to accomplish these tasks, Hiltrop (1999) referred to the research by McKinsey that listed the factors important for talent management applications (Hiltrop, 1999: 424). From this research, we see that "mentoring" applications are one of the important factors that influence a firm’s attractiveness in the labor market. This result supports the new dynamics that have become important for individuals as they encounter boundaryless careers (Littleton, Arthur & Rousseau, 2000). Because of this new career formation, the individual him/herself is managing his/her career. Job enrichment and opportunities to develop skills and employability have become important factors for employees to manage themselves. In turn, mentoring programs help employees develop themselves and obtain opportunities for challenging assignments. In this respect, we can evaluate mentoring applications as helpful in attracting and retaining high talent. In addition to attracting and retaining talent, mentoring applications have also become important for organizations to build their own talent pool of organizations. Particularly in relation to succession planning, mentoring applications may have tremendous value. (Delong, 2004) explained that succession planning does not mean just finding another competent employee to fill a soon-to-be- vacant position. Rather, it is getting organizational and position-specific knowledge that is not recorded in any organizational manual from the employee him/herself before his/her valuable organizational knowledge is lost. In this respect, mentoring applications help organizations take advantage of intellectual capital, human capital, and organizational knowledge (Safi, 2007). Mentoring programs have another positive effect on talent management in terms of employee motivation. Mentoring applications help newly-hired employees become acclimated to and develop a connection with the organization. Through this connection, it may be easier for managers to motivate these employees to commit to the organization’s goals and values (Love, 2004). The most obvious impact of mentoring programs in relation to talent management is in developing employee competencies. Simply hiring top talent will not guarantee that these employees will be productive all the time; therefore, developing their competencies through effective human resource practices is vital (Ulrich & Lake, 1990). By using mentoring applications as an important human resource practice, it is possible to help employees continuously develop their skills and competencies and thus be productive.