Should succession planning be open? (Toughest HR Questions)

Benefits of transparency outweigh risks of secrecy
By Yaseen Hemeda
|Canadian HR Reporter|Last Updated: 10/12/2012

Question: Is it better for an organization to have an open or closed succession planning and management program?

Answer: There isn’t a right or wrong answer. It would be misleading to assume every organization should follow a specific succession planning model.

Succession plans will vary depending on the size of the organization, industry and type of talent that exists within the organization. The key is to ensure there is a structured approach so it is not executed haphazardly.

The decision to have an open or closed program should be something that is discussed thoroughly from the outset, ideally between a senior HR practitioner and CEO, or other senior leaders.

Before making the decision, it is important to understand the differences between the two.

Open programs: An open succession planning and management program is treated with candour and employees consistently receive regular feedback about their performance and role at the organization. Managers frequently communicate with their employees and provide feedback about not only work expectations and requirements, but the competencies and success factors required to attain advancement at the organization.

Closed programs: A closed succession planning and management program is not transparent and is executed with high secrecy, with no input from employees who may be impacted by the process.

Most organizations have a closed succession planning and management program, according to a 2011-12 Towers Watson North American Talent Management and Rewards survey of 316 organizations in the United States and Canada that found 72 per cent do not inform employees they have been labelled as high potentials.

There are more negative risks associated with this approach because having an engaged workforce requires employees to be involved in the future of the organization.

Keeping employees in the dark about their succession is not an effective retention strategy. There is often an issue of loyalty and suspicion when using a closed approach, especially when an external candidate is hired. If this happens, there may be an increase in voluntary turnover because employees feel undervalued.

Many advocates of the closed succession planning approach argue that telling employees about their high-potential status increases the probability of poaching from external recruiters. To alleviate these concerns, organizations should give employees more challenging assignments, strengthen the organization’s position as an employer of choice and distinguish the organization from the rest of the pack — which will help retain key talent.

Whether it involves providing more flexible work arrangements or better wellness programs, it is important to understand what matters to employees and fulfill those needs. There is no textbook answer on how to become an employer of choice. The key ingredient is listening to employees and responding accordingly. It is important to establish relationships with employees so they feel engaged and part of the solution to helping the organization achieve success.

Transparency is crucial because there may be employees who perform exceptionally and are ideal candidates for advancement, but who do not want to advance at the organization for a variety of reasons. Therefore, when identifying high potentials, it is crucial to know if they even have the desire to advance.

A concern often raised is the “crown prince phenomenon,” according to William Rothwell, professor at the workforce education and development program at Penn State University in University Park, Pa.

The concern here is if employees realize they are being considered for future promotion, they may become complacent in their jobs, thinking that no matter what they do, they are guaranteed promotion. The key to managing expectations is to make it clear to employees there are no promises or guarantees, but only possibilities for succession.

Organizations that take the approach of concealing succession planning and management information risk alienating and losing high-potential employees who may leave the organization for greener pastures because they didn’t know they were being considered for succession.

It’s understandable for organizations to be somewhat hesitant to announce publicly a particular employee is a high potential and being considered in the organization’s succession plans. Some fear this may discourage employees who are low on the succession list. Perhaps a better strategy to appease these concerns is to only inform those employees who are labelled as high potentials about their potential succession at the organization.

The risk of keeping high potentials in the dark may result in more negative consequences for the organization than having a policy of transparency.

However, if an employer decides to communicate with employees about their prospects for succession, it is recommended legal advice be obtained to ensure employees do not interpret this communication as a type of verbal contract guaranteeing them a particular job in the organization.

Yaseen Hemeda is a product writer for Consult Carswell. He can be reached at yaseen.hemeda@thomsonreuters.com or visit www.consultcarswell.com for more information.

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