The Human Resources Institute of New Zealand - Logo

The Human Resources Institute of New Zealand

Human Resources Institute of New Zealand (HRINZ) is the professional body for those involved in Human Resource Management and the development of people.

HRINZ represents the interests of 3,000+ individual members who make up around 45% of the known New Zealand HR market. Read More

Profile ID

Password

Remember me


Succession Planning

What is Succession Planning?

The need for succession planning by all organisations, large or small is arguably more important today than ever before for two basic reasons. Firstly, to deal with the sudden exit of a key member of an organisation through death, accident or resignation; and secondly, to satisfy motivational issues such as career planning.

Succession planning is clearly within the remit of the HR practitioner may be asked by their organisation to proactively identifying candidates to replace core employees who could be leaving the organisation or there sudden departure would pose a risk to the firms operation.
This process of succession planning will also concentrate the minds of HR practitioners on the career development of leading or star employees. The process will entail a matching of the knowledge, skills and abilities of the employee to the goals of the organisation.

The formalisation of the process will very much depend upon the size of the organisation.  Clearly, there will be more transparency in a smaller organisation than in a larger one. 

Richard Rudman in Human Resources Management in New Zealand, 4th edition suggests that the use of an Organisation Replacement Chart * might contain detailed information about employees, for example qualifications, experience, past jobs, but adds the rider that this should be a planning tool rather than a record-keeping device. The key function of the Chart is to contain information about the employee with a view to their knowledge, skills and ability suitable for a next position. The chart would be used as a basis for career development.  Is succession planning purely an internal organisational issue? No. In public companies, investor confidence will be boosted by the knowledge that in the event of some catastrophe, the continuance of the business will be assured.  Therefore, investors will be more than interested in a robust succession planning policy.

In the past, when staff at various levels would remain with an organisation for many years, the issue of succession planning was not one that was a great problem. Today however, employees of all levels do not have the same ‘connection’ with organisations. Retention is a perennial issue and extraneous factors may cause the strategy of the business to go off course.

Succession planning is therefore more important today than in previous times. At its basis, the aim of an organisation is to survive. The way to survive is through an overall policy of risk management that the continuity of the organisation is ensured.

Succession planning will involve:

  • Understanding the organisation’s long-term goals and objectives
  • Identifying the workforce’s developmental needs

Enquiries made of a number of organisations in New Zealand, elicited a number of varying responses.

Case study

A leading New Zealand hospitality organisation has a succession policy that is connected to their recruitment, appraisal and training programmes.

Implicit in their recruitment process for a number of positions, is the desire to fill a role for the future.

Furthermore, there is a policy of internal promotion as a first priority rather than recruitment from outside.

Performance appraisal is to identify what skills are necessary for the further development of the employee and what are their short and long term goals.

Case study

A medium-sized manufacturing organisation did not have an official succession planning policy in place. It used the performance appraisal process to identify those who have the potential to take on the next level in the organisation’s hierarchy.

There is a concentration on promoting internally, at first and then resourcing externally, should the circumstances dictate.

When the organisation carries out its strategic planning and where growth is part of the plan, the organisation will be looking at management and in particular their development potential, their potential to take on change and wider skills.

The organisation has a Leadership Development Programme and the 360 Degree Feedback is used as a basis for identifying training and development needs.

Case Study

A medium-sized communications organisation said that there was no official succession planning policy in place. There was however, the organisation’s ‘radar screen’ that identified those that were suitable for ‘the next step up’ or for development for that next step up.

Case Study

A medium-sized manufacturing company has a relatively simple organisation chart that identifies key positions in the organisation. There was the need to identify ‘flight risk’ and whether various personnel had ‘high’ or ‘low flight risk’ with the attendant's loss of technical knowledge. Possible successors are identified and given further education or placed on project work, both with a view to developing the employee for that higher position.

Case Study

A medium-sized manufacturing company had no explicit, written down policy of succession planning. However, the company had identified logical successors for those holding key positions. Those identified would be given training opportunities to develop and therefore be ready to take on posts ‘above’ their own.

The case studies above have given an array of approaches from details to none. The emphasis here is one of choice of approach.

An organisation may decide not to spend corporate time on creating a succession planning policy and may decide to ‘wing it’ in the hope that the dreaded contingency will never occur or if it does, then there will the scurry to find a replacement to the key member of the organisation, from within or outside the organisation. 

This article was written for HRINZ publication,  for more information on this area, please refer to the articles listed below or performance management sub-competency.

HR Tool Kit:

 


Knowledge Base Search | Browse Topics: A-H  I-P  Q-Z |

Can’t find what you’re looking for? Contact HRINZ for help.

For articles, tips and tools members can view HR Guides, Human Resources Magazine and Other HR Articles.

Disclaimer: This information has been written for and submitted to HRINZ for publication and has been published in good faith for the general information of HRINZ Members of the Institute. HRINZ accepts no legal responsibility for the contents of the Knowledge Base and appropriate professional advice and assistance should be sought in particular cases.

MoST Content Management V3.0.6838