Reason 8: Improve Employee Morale

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Succession planning and management can be a means by which to improve

employee morale by encouraging promotion from within. Indeed, promotions

from within ‘‘permit an organization to utilize the skills and abilities of individuals

more effectively, and the opportunity to gain a promotion can serve as an

incentive.’’29 Once that goal is achieved, the promoted employee’s example

heartens others. Moreover, particularly during times of forced layoffs, promotions

from within and ‘‘inplacement’’ (movements from within of individuals

otherwise slated for layoff ) can boost morale and can help offset the negative

effects of ‘‘survivor’s syndrome.’’30

Reason 9: Improve Employees’ Ability to Respond to Changing

Environmental Demands

A ninth reason to sponsor systematic SP&M is to ‘‘improve employees’ ability

to respond to changing environmental demands,’’ according to the respondents

to my survey. ‘‘One role of the leader,’’ writes Gilmore, ‘‘is to shield

the organization from ambiguity and uncertainty so that people can do their

work.’’31 Organizations sponsor SP&M as one means by which to prepare people

to respond to—or even anticipate—changing environmental demands.

People groomed for key positions transform the ambiguity and uncertainty of

changing external environmental demands into vision and direction.

Reason 10: Cope with the Effects of Voluntary Separation Programs

My respondents identified ‘‘coping with the effects of voluntary separation

programs’’ as the tenth most important reason that organizations sponsor systematic

SP&M. Voluntary separation is closely related to forced layoffs and is

often a preliminary step to it. In a voluntary separation, employees are offered

incentives to leave the organization—such as prorated pay by years of service

or years added to retirement. Like a forced layoff, a voluntary separation requires

work to be reallocated as productive employees leave the organization.

That requires some effort to identify ‘‘successors.’’ Hence, SP&M can be valuable

in identifying how—and to whom—work should be reallocated after

workforce restructuring.

Reason 11: Cope with the Effects of Downsizing

An eleventh reason cited by survey respondents for organizations to sponsor

systematic SP&M is to ‘‘cope with effects of downsizing.’’ Downsizing has

been—and continues to be—a fact of life in corporate America. While not as

widely publicized as it once was, downsizing, the evidence suggests, has continued

unabated since before the first edition of this book was published in

1994. Middle managers and professionals have been particularly affected.

While jobs may be eliminated, work does not go away. As a consequence, there

is often a need to identify those who can perform activities even when nobody

is assigned special responsibility for them. Succession planning and management

can be a tool for that purpose.

The respondents to my survey confirm that organizations have continued

to undergo radical workforce restructuring in recent years, a trend first pinpointed

in the 1994 edition of this book. (See Exhibit 1-8.)

Reason 12: Decide Which Workers Can Be Terminated Without

Damage to the Organization

When making hiring decisions, employers have long considered an individual’s

potential for long-term advancement, as well as his or her suitability for

Exhibit 1-8. Workforce Reductions Among Survey Respondents

Question: In the last 5 years, has your organization experienced organization

change? Circle all responses in the right column below that apply.

Organization Change Frequency Percentage

A Layoff 11 21.57%

An Early Retirement Offer 8 15.69%

A Reduction in Force 11 21.57%

A Hiring Freeze 13 25.49%

Reduction by Attrition 17 33.33%

Others 2 3.92%

Total 51 100.00%

Source: William J. Rothwell, Results of a 2004 Survey on Succession Planning and Management Practices. Unpublished survey

results (University Park, Penn.: The Pennsylvania State University, 2004).

filling an immediate job vacancy. Perhaps for this reason, then, survey respondents

cited ‘‘deciding which workers can be terminated without damage to

the organization’’ as the twelfth most important reason for organizations to

sponsor SP&M.

Reason 13: Reduce Headcount to Essential Workers Only

The thirteenth reason for organizations to sponsor succession planning and

management, as cited by my survey respondents, is to ‘‘reduce headcount to

essential workers only.’’ In an age of fierce competition, processes must be

reengineered to decrease cost, reduce cycle time, and increase quality and

output. Processes must be reexamined in light of results required, not activities

that have traditionally been performed. In such environments, ‘‘companies

don’t need people to fill a slot, because the slot will only be roughly

defined. Companies need people who can figure out what the job takes and

do it, people who can create the slot that fits them. Moreover, the slot will keep

changing.’’32 Headcount will also shift to keep pace with shifting requirements.

Best Practices and Approaches

Numerous studies have been conducted of SP&M in recent years.33 Exhibit 1-9

summarizes some of the key best practices identified from those studies.

There are numerous approaches to SP&M. They may be distinguished by

direction, timing, planning, scope, degree of dissemination, and amount of

individual discretion.


Who should make the final decisions in SP&M? The answer to that question

has to do with direction. A top-down approach to succession planning and

management is directed from the highest levels. The corporate board of directors,

CEO, and other top managers oversee program operations—with or without

the assistance of a part-time or full-time SP&M coordinator, a leadership

development specialist, or a human resource generalist assigned to help with

the program. The highest-level leaders make decisions about how competence

and performance will be assessed for present positions, how future competence

and potential will be identified, and what developmental activities—if

any—will be conducted with a view toward preparing individuals for advancement

and building the organization’s bench strength of leadership talent.

In contrast, a bottom-up approach to SP&M is directed from the lowest

levels. Employees and their immediate supervisors actively participate in all

activities pertaining to SP&M. They are also on the lookout for promising people

to assume leadership positions. Decisions about SP&M are closely tied to

Exhibit 1-9. A Summary of Best Practices on Succession Planning and

Management from Several Research Studies

Based on several research studies of SP&M programs, best practices are:

Best Practices According to Robert M. Fulmer

Deploying a Succession Management Process

_ Best-practice organizations make succession planning an integral corporate

process by exhibiting a link between succession planning and overall business

strategy. This link gives succession planning the opportunity to affect the corporation’s

long-term goals and objectives.

_ Human resources is typically responsible for the tools and processes associated

with successful succession planning. Business or line units are generally responsible

for the ‘‘deliverables’’—i.e., they use the system to manage their own staffing

needs. Together, these two groups produce a comprehensive process.

_ Technology plays an essential role in the succession planning process. Ideally,

technology serves to facilitate the process (make it shorter, simpler, or more flexible)

rather than becoming the focus of the process or inhibiting it in any way.

Identifying the Talent Pool

_ Best-practice organizations use a cyclical, continuous identification process to

focus on future leaders.

_ Best-practice organizations use a core set of leadership and succession management


Engaging Future Leaders

_ Best-practice organizations emphasize the importance of specific, individualized

development plans for each employee.

_ Individual development plans identify which developmental activities are needed,

and the ‘‘best practice’’ firms typically have a mechanism in place to make it

simple for the employee to conduct the developmental activities. Typically, divisional

human resource leaders will monitor employee follow-up in developmental


_ Best-practice partners rely on the fundamental developmental activities of coaching,

training, and development most frequently and utilize all developmental activities

to a much greater extent than the sponsor organizations.

_ In addition to traditional executive education programs, best-practice partners

increasingly use special assignments, action learning, and Web-based development


Source: Robert M. Fulmer, ‘‘Choose Tomorrow’s Leaders Today: Succession Planning Grooms Firms for Success.’’ Downloaded

on 19 July 2004 from Used with permission.


Exhibit 1-9. (continued)

Key Best Practices According to William Rothwell

_ Use a ‘‘big picture roadmap or model’’ to guide the effort.

_ Ensure hands-on involvement by the CEO and other senior leaders.

_ Use competency models to clarify what type of talent the organization’s leaders

want to build.

_ Develop and implement an effective performance management system.

_ Lead the target by clarifying what competencies will be needed for the future if

the organization is to achieve its strategic objectives.

_ Use individual development plans to narrow developmental gaps.

_ Develop descriptions of the values and ethical standards required and assess

people relative to those as well as competencies.

_ Build a viewpoint that high-potential talent is a shared resource rather than owned

by specific managers.

_ Use leadership development efforts to build shared competencies needed for the


Source: William Rothwell, Ed., Effective Succession Management: Building Winning Systems or Identifying and Developing Key

Talent (Lexington, Mass.: The Center for Organizational Research [A division of Linkage, Inc.]). See

article.asp?id_4. Used with permission.

Four Key Best Practices According to Chief Executive Magazine

1. Identify. Find HiPo candidates in the organization by using consistent, objective


2. Diagnose. Assess individual candidates’ strengths and weaknesses compared to

the organization’s needs.

3. Prescribe. Provide the right development to build competencies in the organization.

4. Monitor. Make sure that the succession process works to build leaders over time.

Source: ‘‘Succession Management: Filling the Leadership Pipeline,’’ Chief Executive, April 2004, pp. 1, 4. Used with permission.

individual career-planning programs, which help individuals assess their present

strengths and weaknesses and future potential. Top managers receive and

act on decisions made at lower levels.

A combination approach attempts to integrate top-down and bottom-up

approaches. Top managers are actively involved in establishing SP&M procedures,

and remain involved in the SP&M program. Employees and their immediate

supervisors are also actively involved in every step of the process. Some

effort is made to integrate SP&M and individual career planning. Often, a suc-

cession plan without a career plan is a wish list because designated HiPos may

not aspire to the career goals to which managers think they should aspire. A

career plan without a succession plan is a road map without a destination.