Importance Of Succession Planning Commerce Essay

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Succession planning is defined as the process of ensuring that qualified persons are available to assume key managerial positions once the position is vacant. Since there are many reasons leading to a vacancy such as death, resignation, termination or the orderly retirement of company officials, management must always be ready with a succession plan.

In your opinion, succession planning should focus only to the top level of management or should it be expanded to the middle level of management as well?

Succession planning definition

Succession planning is a process that identify and developed staff to fill in the roles of the key personnel in an organization once they is a vacancy of that position.

Whom is Succession Planning for?

Succession planning is essential are for the top management or selecting proper potential skilled personnel and develop them to grow and expand. It is done by asking this critical questions

Does this position need to have a unique or specialized skills to deliver a product/service ?

Does this position have critical influence over operations or strategy ?

Importance of Succession planning

Succession planning is done importantly to the success of the organization because the personnel will be then be responsible in handling future challenges. Furthermore, by giving them training and continuous development will enhance their skills and competencies needed once the gap needed to be filled in.

These selected personnel will be exposed to a broad range of learning opportunities as they will becoming the leaders of the company. Besides that, these individuals should also be exposed to as much of the working environment as possible so that they gain a good understanding of what the company requires to remain successful.

By having succession planning in place , organizations stand a step ahead of their competitors. The effort required to establish a development program for future leaders is worthwhile because it creates a motivated and capable group of employees that are ready to move forward in the organization when the need arises.

Current Issues on Succession Planning- Articles Reviews

Article 1: Maintaining Organization Culture Through Leadership Succession Planning

Leadership succession may impose a problem for organizations desiring continuity of the existing organizational culture. According to Trice and Beyer (1993) studies showed that leadership fails to representing or mixing organizational culture .This research article was to extinguish relationship between a planned leader succession and the continuity of organizational culture.It is to note that , a leader should into account and show the following traits to obtain successful succession planning and these are:

"Articulate ideology"

"Represent existing values that were successful in the past"

"Effective role model"


"Refurbish and strengthen existing culture"

"Affirm and celebrate existing cultural ideologies and values"

"Continue existing traditions"

Article 2 : Keeping it in the family: How to improve succession planning

This article emphasis on how different cultures react on implementing succession planning especially in family oriented business. In Western countries, succession planning is done by properly selecting and identifying the potential candidate, mostly done when they are still in their teenagers so that ample experience will be obtain .In contrast , Eastern countries do it by heredity or those that are close kin or blood connected.

An approach done to a company in China mainly creating a fund to groom potential successors , developing them along the way but unfortunately was not successful. This is due to the fact that , most of the current modern entrepreneurs do not spent enough time with their children or future stakeholders . This will result in a lack of competitive and do not have the opportunity to do more hard work and determination, and this is a negative impact to business to prosper.

This article also highlight when doing staff succession plan and measures to be take in such as candidate selection, appraisal and evaluation. Combining the right framework with relevant educational background and business experience for successors are regarded as some of the vital ingredients of effective succession planning.

Article 3: Succession planning - or smart talent management?

This article shows and examines advantages and disadvantages in building talent to ensure the right people doing the right job in an organization. It points out five strategies how a succession planning works which are :

"Aligning succession planning with business strategy"-

"Assessing leadership potential using the 3cs- competence, connection and culture" -

"Involve the talent in the planning" -

"Mixing development: experience/coaching/training," -

"Casting a wider net for succession"- by looking for the right people is a smart talent management strategy that can initiate holding of talent throughout the organization

Article 4: Diverse Succession Planning: Lessons From The Industry Leaders

As stated by (Pfeffer, 1998) some large corporation, such as Hewlett-Packard, Lincoln Electric, and Southwest Airlines, do place heavy importance on promotion from within and treat succession planning as a part of a critical process. Even so, sometime practices in most organizations using succession planning did not include developing women and minorities for key positions.

Even so, McCuiston,Wooldridge, & Pierce, (2004) indicated that the future of many organizations will likely on their control of diverse succession planning given that building bench strength among women and minorities will be critical in the competitive war for talent. Hubbard (2004) stated if an organizations lack of diversity management programs will often experience excessive turnover and high replacement costs, loss of investments in training, brand image problems, poor employer image, and litigation .

Article 5: Succession planning: a developmental approach

This article shows ways of getting a successful succession planning that works.

"Making sponsorship a more open and managed process"

Sponsorship in an organization is meant by having a resourceful senior manager that also act as a mentor or coach to his/her subordinate. By having this implemented , managers play this role as:

"Stop putting people into boxes"

Conceptually stated, it is just like putting staff in the boxes that prevents them from breaking out.

The negative side to putting people in boxes is that the box becomes a cell, from which it is difficult to break out. Labelling people may prevent them and other people seeing them differently in different circumstances. It is remarkable, for example, how many apparent middling performers, perceived to have low potential for promotion, become different people under a different boss, who offers different beliefs about them. The same principle may also apply to star players, who die on the vine, when they move out from the protection of a powerful boss

"Adopt a more systemic view of performance".

"Continually re-examine the qualities and experience required for significant roles"

"Manage the process of helping people build track record"

A systemic view sees performance as the outcome of both the individual's capabilities and the context in which they operate.Changing the environment may encourage talented people to apply themselves more and in original ways, which will be of far more value than dragooning them into a ''pipeline''. At the simplest level, a manager, who had been dropped from the high flyer pool, because he was judged to be not sufficient of a strategic thinker, negotiated one day a week at home to work without interruption. Six months later, his devastating analysis of the business' IT strategy led to a total rethink of this aspect of the business. Two things had changed: he had gained the time to reflect; and he had been helped in using reflective space by occasional conversations with a mentor, who enabled him to tap into skills that were already there but had been suppressed by the working environment

How to effectively conduct succession planning

Since Succession planning a part of an integrated HR process that includes training, development and performance appraisal, is essential to identify what skills the organization will need in another few years time. All main and critical positions must be also be identified and included in the Company's succession planning program. Next is to identify and analyse who are eligible for retirement including key performers that are ready to be in these critical positions. Managers need to identify the responsibilities, skills and competencies that will be needed by their replacements .

The training and development requirements of these potential successors needs to be established and developed through work experiences, job rotation and other challenging assignments. This succession planning must include medium of communicating and providing feedback and encouragement between potential successors and the organization.


The succession planning process needs to be considered as part of the company's strategic planning process because it gives projecting future changes by expecting management vacancies and then determining how to meet these challenges. It is not something an established company can ignore because the consequences of not being prepared to replace key personnel will have a major impact on an organization's ability to achieve its goals and strategic targets.

Question 2 -Compensation

In shaping the future direction of a company, one of the main responsibilities of the company lay in the development of its human capital. With the fluctuating demands and competitive supply, human resources, innovative and creativity are the salient tools for the companies to retain their competitive advantages in the market. Therefore the companies require their employees to be versatile, independent and highly skilled to be able to influence and build knowledge to produce quality choices .In order to recognise their talent in the company, there are many companies adopting the competency based remuneration policy. Assuming that you are the HR manager for a multinational company, how do you decide on the core competencies in order to design a competency based remuneration for middle managers in the marketing department? How do you intend to evaluate your employees using competency based remuneration ? Justify your answers

What is a competency-based pay?

Performance based pay is used to compensate how competence or productivity a worker is. If a worker managed to outcome the required output standard , he or she will not get just the basic salary but other incentive payment as well. An example of this incentive payment is using commission as an attractive remuneration especially dealing in sales or marketing to exceed the required quotas.

Why use competency based remuneration ?

Managers and executives play an important role in making impact to the organization.Thus by having a competency based remuneration could determine on how a marketing personnel can be achieved either by an individual or team level. By setting career goals, it would increase the employee motivation while reducing turnover and recruitment cost. By producing more relevant and unbiased performance appraisal plans will also linked to delivery of the company's objectives.

Advantages of using Competency Based Remuneration

Better Achievement

Worker using this competency based plan will result in more increased productivity as they intend to achieve higher. He or she will be rewarded accordingly if perform well as part of their incentives and overall will improve the organisation's productivity.

No Senority Factor

As this put more effort in how the employee performs involving competencies such as leadership skills and attention to detail , no seniority level has an impact and this is a benefit for the less experienced employee. This can motivate fresh or new employee without feeling predisposition as to receive higher compensation.

Culture of Improvement

Since compensation is based on showing improvement in the selected competencies, a large emphasis is placed on self-development. This can result in a persistent cultural attitude that the better you perform, the bigger the reward.

Disadvantage of using Competency Based Remuneration


Bias does occur during the evaluation process for competency based remuneration . Concepts such as leadership and the multitasking are open misinterpret, and this will result in higher possibility of inaccurate rating.

Relationship of Competencies to Performance

It can be difficult to establish which competencies actually result in improved job performance or productivity. For example, if your customer service representative increases the number of inquiries he handles in a day, is it because of an improved ability to multitask or increased attention to detail that helps him resolve issues more quickly?

Element of Favoritism

Another possible downside to competency-based pay plans is that they can result in the perception of favoritism,. If one worker perceives herself as more valuable than another but discovers that the other employee received a larger pay increase, he/she may assume that being treated unfairly. Finally this will create disagreement and dispute among the employees.

How to conduct an effective Competency Based Performance for Middle Manager in the Marketing department?

As many companies are trying to achieve on growth , many are being stopped from being forward ,which are their sales or marketing force as caused by ineffective sales personnel and many turnover.

It is essential to use the below model for competency selection and definition with the aim for business strategy . Defining what the enterprise needs to do to succeed is essential. This definition subsequently is understood in terms of desired behaviors, results and outcomes people need to provide to help the strategy succeed.

Model of Competency Based Perfomance

(taken from " Competencies and competency models: does one size fit all", ACA Journal, Spring 1996, Volume 5 No. 1)

The role compensation plays is defined in the compensation strategy. Where competencies are part of the compensation strategy, organizations should explore the possible competency sources drawn here and select those competencies that fit their communication needs. Strategic advantage comes from defining and executing competencies to provide advantage. The model provides strategic alignment for competencies.

One way to solve this is the appropriate competency compensation model together with a performance evaluation as a part of it. This model is a standard mark to acknowledge some people better at doing sales or marketing than others and at the same time will be used throughout the entire department . This model has been created over the years but most will focus on key areas such as skills , knowledge and personality or behaviors .

How do you decide the core competencies of the Marketing Manager?

As a leader key areas for the marketing manager has to be the ability to communicate orally and in writing, interpersonal & persuasion competencies and strategic marketing planning and implementation competencies seem to be essential for for marketing managers irrespective of the industry.

How to evaluate employees using the Competency Based Performance ?

Evaluation can take takes place in both core competencies and job competencies to assess a productive worker.

Competency-based performance review focus on three areas which are: core competencies, job competencies and the use of both to perform job assignments and duties. For example, a registered nurse who is proficient in starting an IV for medication but has poor communication skills is incapable of giving quality patient care since so much of healthcare depends on how well providers communicate with their patients. Quality patient care is more important than clinical expertise; healthcare providers must demonstrate their ability to put patients at ease through both verbal and nonverbal communication. Likewise, an administrative assistant who demonstrates excellent proficiency with software applications but has poor or nonexistent organizational skills cannot be effective in his job.


Competencies can be used to assist in creating more meaningful development discussions between marketing manager and team member by becoming the vehicle to review behaviours & performance during past situations in conjunction with future performance needs for the business & the individual.