Succession planning: What you can do now
When key employees leave your company, succession planning can play a critical role in managing and investing in your company’s human capital. Yet many owners and managers put off planning for these issues because of fear. They worry of jeopardizing relationships or think they can’t afford to have backups for key employees.
Fortunately, there are succession planning tools with operative, promotion-from-within approaches to ensure business continuity in both large and small businesses. Please consider the tools described below as an alternative to doing nothing about succession planning, thereby keeping your business at risk. If implemented properly, these tools shouldn’t jeopardize relationships or be cost-prohibitive.
If you believe, as we do, that employees are the most important business asset in meeting and exceeding customer expectations, then here are some immediate tools to consider. These will not only enable you to lay a good foundation for key-employee succession, but will simultaneously make your day-to-day business run more efficiently, typically saving you more than any implementation costs.
With the critical shortage of middle and top leaders predicted for the next five years, companies can’t overlook these key steps to groom employees with leadership potential.
Written job descriptions the primary tool for employee recruiting and retention help minimize negative outcomes that might result from misinterpretation of responsibilities and expectations. Job descriptions should be limited to one page and include the job title, the position’s direct report, whether exempt or nonexempt, pay range, a list of major responsibilities and a list of competencies (education and experience, each categorized as required or preferred).
The No. 1 reason people change jobs is lack of recognition/communication by their employer, not pay and benefits. At least annually, each employee’s performance should be evaluated in writing jointly by the employee and immediate supervisor. This should be an objective comparison of performance to the written job description and may include goal-setting for the next period. When the employee and supervisor disagree on one or more issues, the objective data and/or supervisor have the final say, subject to the employee’s right to an appeal process a must-have if you want to build an atmosphere of mutual trust and confidence.
Standard written appraisal forms can be used to document this process. Typically forms include employee name, supervisor, position, appraisal period, a numerical rating system such as from 1 to 5, written objective comments comparing performance to each major responsibility on the job description, written measurable objectives, growth plans and/or corrective actions for the coming period, a place for employees’ comments and dated signatures of the supervisor, the supervisor’s supervisor and the employee. It is important to note, the employee’s signature serves as acknowledgement only, not necessarily agreement with the appraisal.
An effective appeal process is one where the employer gives up control. In this scenario, a company may have a dispute-resolution committee comprised of an odd number of employees, the majority of whom are not supervisors or managers. The non-supervisorial/managerial committee members should be elected by their peers, trained in conflict resolution by the company and serve for a fixed term, say one to three years. Terms should be staggered to prevent all members changing at the same time. Supervisory and managerial members can be permanent or rotational at the employer’s option, and should be trained or otherwise qualified.
Employees can appeal in writing anything that affects their performance rating, pay, benefits, working conditions, and so on. The committee must hear both sides and render its decision, based on facts and circumstances, within a specified time period.
Neither the appellant nor the committee is free to circumvent or change legal mandates or company policies, be they fair or not. The committee’s decision is final, not subject to further appeal.
This process is not recommended unless the tools described above are operating effectively. Employee participation in career-pathing should be voluntary. Those choosing not to participate don’t have a strong case for complaining about not being considered for promotion later on. To qualify, an employee should have at least one year of service and a satisfactory-or-above rating on the most recent performance evaluation. Most companies include career-pathing, for employees wishing to participate, simultaneously with the performance appraisal process.
The career-pathing process allows employees to share their career goals and employers to determine how each employee’s goals align with company objectives. Employees choosing to participate tell their supervisors and management, “Where they see themselves in three/five/ten years.” This is an opportunity for both parties to evaluate what is realistic and what is not, what is needed to progress, to set goals for the employee and decide what the employer will or will not contribute toward those goals. Mentoring, job rotation, further education or specific job training can be steps outlined in the career path.
For the above tools to work, each business must have open, ongoing two-way communication from the very top down in an atmosphere of mutual trust and confidence together with a comprehensive training initiative and a strong promotion-from-within program.
Regardless of whether you are in an industrial or service sector, family-owned or a multi-national corporation, it is vital to have back-up people ready to step-in to provide services and deliver product. Succession planning results in operating efficiency and productivity gains that offset any costs associated with implementation.
Succession planning can be done in a manner that creates win-win scenarios for the employees, customers and the owner/manager. Don’t let your business go down the brain-drain, losing top-notch employees to companies who have a plan and cultivate employee talent. Succession planning is really something that you cannot afford not to do.
Deb O’Gorman is contract training director for TMCC’s Workforce Development and Continuing Education Division. Contact her at email@example.com or 824-3811. Bob Bricca is a project manager with MAP, an industrial outreach program of the Nevada System of Higher Education. Contact him at firstname.lastname@example.org or 775-772-9824.
By mid-day April 6, over 400 Nevada businesses had submitted PPP applications to Greater Commercial Lending. The business will continue to accept applications from all Nevada businesses, regardless of whether they have a current relationship with the company.