Steps to formulate an effective succession plan

Management succession system is of course one of the main preoccupations of the human resources dep-artment but the system remains weak due to family domination in business.

Despite several attempts made for changes in the organisation, a culture still exists in organisations to retain top management posts exclusively for members of the family.

While creating top posts for heirs no system is followed. For instance, a local company recently appointed a fresh graduate, who is the son of the chairman, as its chief executive. The company does not follow the policy of management succession system.

In another big group, the managing director has been in that post for 30 years. The owners believe that there is no need to replace the MD who is a genius.

In this company, many changes for senior and junior posts took place. The super annuation, a retirement policy, was applied only to junior grade jobs. Mana-gement said they wanted young blood with lower salary. In order to create an innovative workforce, the company adopted a policy to restrict employment of older staff, by relieving them from their jobs. New people were recruited for lesser salary than the existing package.

But the company did not apply the retirement policy to its CEO, the MD or its directors. Their capability was not questioned because of their power and authority.

A kind of selfish succession plan was implemented to reduce wage bill and induce innovation. There is a belief that younger staff will deliver more productivity than older employees.

Moreover, it is also said that if people are kept for more than 20 years they will tend to dominate in the company, become adamant and will resist and resent change.

"But for the new blood, the expectations are less. Moreover, they accept any challenging role with lower salary. That is the reason we ask old people to go and retire them early," said a director of that company.

Practically, the management succession plan must be integrated with the manpower plan of the company. So the retirement policy and career development of all levels should be considered. The plan should also apply to the CEO, the MD and other top officials.

Each key position in the organisation must be highlighted. A job ladder must be formed for key posts, whereby one replacement at least is identified for each position.

The question is how to make it an effective succession plan. The answer lies in the following:

1. Identify key positions.
2. Indicate the period by which the replacement will be needed.
3. Identify potential staff as a successor or replacement immediately.
4.Use appraisal analysis for identifying potential staff.
5. Design the successor's responsibilities and identify deve-lopment inputs if required.
6. Repeat the process for successor's position.
7. Maintain management res-ource inventory: personal data, performance results, potential, skills, career goals, career plans, retrieval system.

The CEO or MD plays a key role in succession. He must view business integrity and create confidence among staff. Succession plan and retirement programme are integrated and there should not be any favouritism in the manpower plan.