Succession management plans are valid in all types of businesses (corporate, family business, small business) and is critical to the effective functioning and internal alignment of an organization for retaining employees, ensuring that critical tasks are completed, and helping the organization fill vacant positions more quickly and efficiently.
There are several major benefits of implementing a succession management process. First, succession management allows for an organization to respond quickly and stay on target amidst change or turmoil such as a drastic and sudden change in the economy or business cycle. For example, if a significant change in the Canadian dollar appears quickly, ...view middle of the document...
Ultimately, having a strong succession management process allows the company to uphold its mission, vision, and core values which is crucial in an ever changing environment.
The limitations inherent in a succession management process are far from few. In fact, by doing it incorrectly, the outcomes can sometimes be worse than not having a succession plan at all. One limitation of the succession management process is that the pressure and stress of having to make a decision of who will replace the organizations’ key individual can lead to a snap decision, and a potentially problematic and incorrect one. By appointing a candidate too quickly, the organization may not have planned accordingly to identify the key skills and competencies of their ideal candidate. In identifying these skills, it may also limit the organization as to which employees will be in their candidate pool and in turn the company would be losing out on a more suitable candidate that could appear later on, which could then lead to poor company performance and turnover (Jacoby’s Business Growth Consultant, online).
If the succession management plan is initially executed incorrectly, then all the decisions following it will be incorrect and lead to poor company performance. Performance appraisals are typically used to identify high-potential employees, however if the performance appraisal system is flawed, such as not being a true 360° review, or if the manager gets rewarded for developing employees into succession management plans, then the outcome will be skewed and potentially result in a poor choice being made (Belcourt et al., 2013). A 360° performance appraisal could be more objective than subjective depending on the type of performance appraisal used. This creates managers that are potentially identifying the wrong candidates to become part of the succession management plan, especially if they have a narrow focus and only identify their direct reports.
Since succession management takes a lot of time and planning, having that effort go to waste by hiring externally is usually avoided. However, by eliminating external recruitment sources and solely focusing on hiring from within, an organization can actually limit the ability to introduce new ways of thinking and impede on company progress (Belcourt et al., 2013). Sometimes, there is simply no suitable candidate within the organization; therefore succession management process becomes impractical and recruiting externally is necessary.
Lastly, managers need to be careful with their succession management process because it could lead to jealously amongst the employees who are not being chosen for leadership grooming. These employees may view the act of succession management as favouritism and consequently become more resentful or lose motivation in their own work if they do not see themselves as having a chance to move upward in the...