Midterm 2 - Succession Management Flashcards
What is the difference between succession management and replacement planning?
Succession management is the process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization.
> requires the development of succession or replacement charts to fill key positions in the organization∙ consists of periodically updating the table of employees who might be selected for promotions if the need arises∙ depends on a stable future, including unchanging organizational structures
Replacement planning is the process of finding replacement employees for key managerial positions.∙
> the focus of replacement planning is the job and having someone to fill that job∙
Why is succession management so important in today’s workplace?
LOTRR
Leadership, Opportunity, Turnover, Replacement, Respond to Change
Succession management is important because
> It ensures continuity in leadership by developing the “next generation of players.”
> Organizations must prepare for expected and unexpected turnover.
> It plans for replacement of retiring staff.
> It provides opportunities for high-potential workers_
What are the five steps in the succession management process?
ALIGN, SKILLS and COMPETENCIES, ID, PROVIDE, MONITOR
ASC
IPM
- aligning succession management plans with strategy∙ 2. identifying the skills and competencies needed to meet strategic objectives (Job-based Approach ((duties, skills, experience)) or competency based approach ((measurable differentiated attributes, hard and soft))
- identifying high-potential employees (Performance Appraisals, assessment centers, HRMS)
- providing developmental opportunities and experiences
- monitoring succession management (engagement scores, higher participation)
What are three of the key characteristics that are critical to the perceptions of the effectiveness of succession management?
TIME, FLEX, SHARING, SUPPORT
TFSS
- a time-frame for achieving planned action
- flexible adjustments to changes in strategic plans
- the sharing of information about the nomination process performance and rankings with identified candidates
- visible support from top management
- the involvement of line management in the identification and development of candidates
A succession management approach should track not only on internal candidates but also external candidates.
Discuss the advantages of internal candidates? Which method is preferred?
Advantages of Internal Candidates
> Organizations have more and better information about internal candidates.
> Organizations that offer career development and opportunities to internal candidates increase commitment and retention among their employees.
> Internally developed leaders preserve corporate culture.
> Internal candidates can hit the road running because they know the organization, its people, and its processes. Other employees know the internal candidate, and there is less internal disruption as a result of waiting to see who the new executive is and what changes he or she will make. Internally chosen executives do not replace those who report to them as often as external candidates do; externally chosen candidates often get rid of the “old guard.”
> Recruitment and selection costs are lower. For example, the replacement cost of a CEO is estimated to be $750 000, including the use of a search firm and lost opportunities while getting the external candidate up to speed. Additionally, internal candidates do not have to be compensated at the higher levels demanded by external candidates (who face the risk of starting in a new organization).
The list of advantages of internal candidates is more robust than that of external candidates, and the reality is that about two-thirds of internal candidates do succeed. Moreover, it appears that when a company is doing well, internal candidates are favoured to sustain high performance because they possess valuable firm-specific knowledge. But overall, it appears that companies that are performing well do better by hiring from within, and companies that are struggling show better returns by hiring outsiders.
A succession management approach should track not only on internal candidates but also external candidates.
Discuss the advantages of external candidates? Which method is preferred?
Advantages of External Candidates:
> The external candidate may have better skills to lead the organization through a major transformation or change in strategy.
> The external candidate brings new knowledge and skills to the organization and prevents the organization from becoming inbred and stale.
The list of advantages of internal candidates is more robust than that of external candidates, and the reality is that about two-thirds of internal candidates do succeed. Moreover, it appears that when a company is doing well, internal candidates are favoured to sustain high performance because they possess valuable firm-specific knowledge. But overall, it appears that companies that are performing well do better by hiring from within, and companies that are struggling show better returns by hiring outsiders.
Define replacement planning. Describe how replacement planning has evolved into succession management.
Replacement planning is the process of identifying short-term and long-term emergency backups to fill critical positions.
Replacement planning has evolved into succession management by:
BECI
> broadening the focus,
expanding the time horizon,
creating a talent pool of replacements, and
improving the evaluation system_
Discuss the reasons why an organization would implement succession planning
IMPROVE, CONTINUITY, REDUCE, RETAIN, REALIZE, DEVELOP, ENCOURAGE,
IC RRR DE
- To improve internal candidate pools∙
- To assure business continuity∙
- To reduce skill gaps∙
- To retain employees∙
- To help individuals realize their career plans within the organization∙
- To develop leaders more quickly∙
- To encourage the advancement of diverse groups∙
- To improve employees’ ability to respond to changing environmental demands
Are leaders born or made?
Peter Drucker, considered by many to be the founder of management as a discipline, is credited with saying, “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.”
Should organizations produce their own managerial talent or buy it on the open market?
One survey found than more than half of companies need to hire an outsider because no insider has been developed to assume the CEO role. By bringing in an outsider, the company sends a strong message to employees and shareholders that the old way of doing things will change. Other organizations feel strongly that they want to indoctrinate and train their own leaders, who then have a deep commitment to the organizational vision.
What is Management Development?
Management Development
> Organizations may find outstanding leaders by chance, or they may commit to the development process. Some may choose to hire from the outside to obtain fresh approaches; others will commit significant time and money to train their own managers. However, most large organizations have a policy of promotion from within. There are many advantages to this:
> the organization has accurate records of employees’ past performance, and
employees understand and are committed to organizational objectives, know the ropes, and know how to get things done.
Some estimate that one-third to one-half of new CEOs fail within the first 18 months. Newcomers apparently fail at understanding the political situation or overestimate an organization’s willingness to change (often the core reason that they were hired).
Another reason to recruit internally is that CEOs recruited from the outside delivered annual returns 3.7 percent lower than insiders. Plus, external hires are paid about 18 percent more than internals, with little evidence that they produce better results. Most large organizations have formal management development programs to ensure a ready supply of “promotables.”
Some of the methods organizations use for management development include promotions, job rotations, special assignments and action learning, formal training and development, and mentoring and coaching.
Define job rotation, providing an example.
Job rotations are lateral (and vertical) transfers of employees between jobs in an organization. Rotations involve a change in job assignments but not necessarily more responsibility or money.
For example, one way of orienting a new employee quickly is to place him or her in a new department every few weeks, providing an overview of the organization. Another example is Maritime Life Insurance, which placed staff with potential in a variety of roles across the organization to avoid costly placement decisions.
Job rotation has several motivational benefits for employees. Describe two benefits.
Rotations have several motivational benefits for employees, including the reduction of boredom and fatigue. Trying out new jobs also benefits employees who have reached a career plateau. The development of additional skills may increase an employee’s job and career prospects. Almost all the research suggests that job rotation makes employees more satisfied, motivated, involved, and committed_
What is succession planning, and what are three of its benefits to organizations?
Succession planning is the process of training and work experience that enables individuals to assume higher-level job appointments in the future.
Some of its benefits include_
> Enabling the organization to respond appropriately and stay on track when inevitable changes occur
There are internal ways to judge whether a succession management program is successful. List three lag measures.
IRI
- Increased average number of candidates for key positions
- 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 hires to external hires in key positions
- Increased retention rates of key talent
- Increased percentage of positive job evaluations after promotion
- More positive assessment of the quality of preparedness for new roles
- Increased number of bosses skilled as talent developers
