Succession Planning: Walking the Tightrope (Part 2)

Authors: Randy Lucius, Liz Roling

Part 1 of this 2 part series provided a background regarding Succession Planning, its purpose and trends influencing the process.  This post  provides and overview of a process for succession planning that successfully  “walks the tightrope” between development and selection that has been used successfully by the authors with other organizations.

The  key to walking the tightrope between the seemingly dissimilar processes of selection and development is to base your decisions upon a thorough understanding of job requirements.   Specifically, we see great value in beginning a comprehensive succession plan with a rigorous job analysis and competency modeling process for all jobs/job families of interest.  Job analysis is simply an analysis of the tasks and abilities required to perform a job successfully, and usually involves job observation and/or interviews with incumbents and supervisors of the position, as well as surveys.  A job analysis ensures that the responsibilities of each job are identified and properly documented, and allows for the identification of  competencies necessary to perform each job.  Once a job analysis is complete, advanced features of a succession plan can be established, including:

• Competencies: Competency modeling are an integral part of the overall process.  Competencies specific to each leadership position and that generalize across positions should be identified.
• Assessments: Once competencies are identified, appropriate assessments can  be selected and/or developed.  These authors have used 360-degree assessments and personality assessments – appropriately mapped directly to job competencies using a methodology suggested by Hogan, Hogan and Warrenfeltz (2007).   Structured behavioral interviews have also been used – constructed based on the results of the job analysis and competencies.
• Talent Pool: Rather than identifying a specific person for a given job (e.g., CEO) a strategy for creating a talent pool can be adapted by analyzing each person’s potential for fulfilling the requirements of each leadership role.  Only with the job analysis results is this possible.
• Emphasis on Development: Development can be emphasized in a unique way unlike traditional succession planning approaches, because of the leverage afforded by the job analysis and competency information.  By using the results of the job analysis, specific recommendations for development can be provided to each candidate for each leadership position vs. an overall “performance/potential” score (i.e., 9-box placement), although the latter is still useful for determining allocation of dollars for each person’s development.  The leader’s strengths and development opportunities for each position can be identified and explained in detail so that candidates who aspire to a given position know exactly which competencies they should focus their attention.  In addition, action-oriented assignments can be  identified for each competency and position included in the project.  A little more follow-up work with existing incumbents can reveal key roles and projects that will help facilitate development around important competencies for a given position, and are both complex and impactful to the organization, two key elements for lasting developmental experiences (Corporate Leadership Council, 2005).

In sum, beginning a succession planning initiative with a job analysis allows for the identification of key, behavior-based competencies that are critical at leadership levels and linked in a meaningful way to the specific needs/requirements of each position.   Using such a process intertwines science with practice and establishes a rigorous, research-based succession planning program.  And basing the entire program on job analysis information ensures that decisions are job-related and defensible – a key factor for any employee selection process.

References

Corporate Leadership Council (2005).  Realizing the full potential of rising talent: A quantitative analysis of the identification and development of high-potential employees.    Corporate Executive Board.  Washington, D.C.: Author.

Hogan, R., Hogan, J., and Warrenfeltz, R. (2007).  The Hogan Guide: Interpretation and Use of Hogan Inventories.  Hogan Assessment Systems.

Succession Planning: Walking the Tightrope (Part 1)

Authors: Randall Lucius, Liz Roling

Succession planning is commonly thought of as a systematic process to ensure that there are replacements readily available to fill key leadership positions, so that turnover will not impact overall organizational performance (Berke, 2005).  Most commonly it is associated with the position of Chief Executive Officer, but more and more it is considered for other executive level roles, hard-to-fill positions, and “critical roles” that have a large impact upon the performance of the organization (e.g., National Account Manager, Director of HR Technology).

The importance of succession planning cannot be overemphasized.  Demographic trends show a potential leadership “vacuum” on the horizon as many baby-boomers prepare to retire (Kareveli & Hall, 2003). Though this trend may have slowed due to recent changes in the economy, there is always a market for good talent, and succession management is as much about investing in your top employees today, to keep them engaged, as it is in preparing for your future talent needs.  Finally, the overall impact leadership has on both a company’s performance and the economy at large has been made all too apparent with the current recession.  Leadership is needed now more than ever, and succession planning ensures a continuity of leadership for the future.

Several reviews of practices in succession planning (e.g., Berke, 2005, Kareveli & Hall, 2003, Groves, 2006) reveal important trends that are shaping the process in positive ways, including:

• Increased emphasis on assessments (e.g., 360, performance appraisal results)
• Development of talent pools rather than specific position replacements
• Use of well-developed competencies
• Greater emphasis on development, including the use of projects and other “action learning” assignments

These trends are exciting and bring much value to succession planning, but the exact process for integrating them all is a bit unclear and somewhat daunting.  Furthermore, because succession planning involves a combination of elements related to both development and selection/promotion, there are important considerations to ensure that decisions resulting from the process are fair, job related and defensible.

Next week’s post will share a process for succession planning that successfully  “walks the tightrope” between development and selection that has been used successfully by the authors with other organizations.

References

Berke, D. (2005).  Succession Planning and management: A guide to organizational systems and practices.  Greensboro, NC: Center for Creative Leadership.

Groves, K. S. (2006).  Integrating leadership development and succession planning best practices.  Journal of Management Development, 26(3), 239 – 260.

Karaevli, A. & Hall, D. T. (2003).  Growing leaders for turbulent times: Is succession planning up to the challenge? Organizational Dynamics, 1, 62-79.

Top 5 HR Protections against Compensation Litigation: Part 5 of 5

Authors: Liz Roling, Randy Lucius.

Our last recommendation in this series addresses the importance of standardizing compensation processes to ensure equity and consistency across the organization.

5. Decrease Discretion in Compensation Process: In many organizations, managers are given the discretion to make pay decisions, without formal standards or training on appropriate factors to consider. By establishing and providing training on clear and objective standards (which can be identified in a job analysis) for determining initial pay and pay raises, you can be more confident that pay decisions are based on job related factors, as required by the Paycheck Fairness Act.

While implementing these protections can be difficult, all the recommendations have all been shown to have a positive impact on company performance, independent of legal compliance. For instance, a recent SHRM (Society of Human Resource Management) poll indicates that the majority of HR managers believe that using behavioral competencies, which are the outcome of a formal job analysis, enabled the hiring of more qualified candidates. HR managers also believe that using behavioral competencies helps increase employee job satisfaction, decrease turnover, and increase productivity. Moreover, evaluating and addressing fairness perceptions, increasing objectivity in performance appraisal systems, and decreasing discretion in the compensation process are likely to increase employees’ perceptions of justice, which are related to increased commitment to the organization, decreased turnover (e.g., Ambrose & Schminke, 2009; Simons & Roberson, 2003), and even improved customer service (Masterson, 2001).

Disclaimer:   Turknett Leadership Group is not a law firm, and the information in this paper is meant to provide general information to explain the legal implications of recent and future legislation for HR. We strongly recommend that you consult legal counsel to completely understand how the legislation will affect your organization.

Top 5 HR Protections against Compensation Litigation: Part 4 of 5

Authors: Liz Roling, Randy Lucius.

The last post discussed the importance of job analysis as the foundation for your pay decisions, and an important outcome of job analysis – job descriptions. This next post is about another potential “product” of job analysis that is also pertinent to compensation: performance evaluations.

4. Facilitate Valid and Legally Defensible Performance Evaluations: Performance appraisal processes, when not well-managed, are often riddled with bias, lacking in variance (i.e., everyone is a 4 or 5), and unrelated to the job. As such, pay decisions based on such a system will have difficulty standing up in court as the basis for job-related pay differentials (as will be required by the Paycheck Fairness Act). When developed with proper validation methods, a performance management system can provide valid and job-related information to differentiate employees from one another.

Top 5 HR Protections against Compensation Litigation: Part 3 of 5

Authors: Liz Roling, Randy Lucius.

The last post discussed the importance of fairness regarding perceptions of how compensation decisions are made. This next post is about a topic near and dear to the authors and the “bread and butter” of Industrial psychology.

3. Conduct a Formal Job Analysis and Create Valid Job Descriptions: Federal guidelines recommend that a formal job analysis be conducted for identifying job relatedness. A job analysis identifies work behaviors in a scientific manner, and without a job analysis, it is very difficult to develop valid job descriptions. In order to be in compliance with the Paycheck Fairness Act, effective documentation such as Job Analysis results and validated Job Descriptions will be more important than ever before, as they will be required for determining the job relatedness of pay differentials.

Top 5 HR Protections against Compensation Litigation: Part 2 of 5

Authors: Liz Roling, Randy Lucius

Last week we discussed conducting a pay equity analysis to identify potential issues in your compensation.  This week we would like to share with you the importance of perception.  Remember, for many people, perception is reality.  Thus our second recommendation is:

2. Evaluate and Respond to Perceptions of Fairness:  Managing employees’ perceptions of the compensation system is also necessary for preventing law suits. By administering a climate assessment that allows employees to anonymously provide their opinions about the fairness of the compensation system, the organization will be better able to address areas of misinformation, in addition to actual inequities identified in the Pay Equity Analysis. Climate assessments also often separate responses according to location, department, and even work group (as long as this can be done while ensuring anonymity), which can help organizations isolate where problems might exist. In sum, evaluating employees’ perceptions of the system is just as important as evaluating actual inequities through the Pay Equity Analysis.

Top 5 HR Protections against Compensation Litigation: Part 1 of 5

Authors: Liz Roling, Randy Lucius

Discrimination claims are on the rise, and with the passing of the Lilly Ledbetter Fair Pay Act in January of 2009, and the possible passage of the Paycheck Fairness Act this year, employment attorneys warn that employers’ responsibilities to ensure fair pay practices could increase dramatically (Weirich, Mollen, & Pulman, 2009). There are several actions worth considering to possibly help protect organizations from compensation litigation. Fortunately, the majority of these protective actions have been shown to improve workforce productivity as well!

In this 5 part series, we will be sharing our views and those of others on what employers should be doing to prepare for this legislation, and in general to sharpen their compensation and related HR processes.

Our first recommendation is:
1. Conduct a Pay Equity Analysis: Based on both pieces of legislation, taking a proactive approach to ensuring pay equity will help to protect your organization from possible litigation. A Pay Equity Analysis allows for the evaluation of employee pay to identify current pay differences based on race, color, religion, sex, national origin, age, or disability. In large organizations, a statistical method called regression is used to weigh different factors such as tenure, pay grade, and job function, in addition to demographic group, to identify and understand pay differences. Because the Lilly Ledbetter Act only applies to current pay differentials, identifying these differentials allows for employers to quickly rectify the impact of past discriminatory decisions. The analysis also allows employers to identify if there are job-related factors that account for the differences in pay, helping organizations protect themselves against Paycheck Fairness litigation. This process is also used in an OFCCP audit.

Stay tuned for additional recommendations in the coming weeks.  Please feel free to leave your comments or contact us directly for additional information.

Disclaimer:   Turknett Leadership Group is not a law firm, and the information in this paper is meant to provide general information to explain the legal implications of recent and future legislation for HR. We strongly recommend that you consult legal counsel to completely understand how the legislation will affect your organization.

Hello world!

Hello World!  This is a blog to share the thoughts, views and opinions of Turknett Associates on a variety of subjects that center around the world of Leadership and Human Performance within organizations.  We have a rather eclectic background that has given us a unique view on some matters, and rather mundane on others!  Topics we plan on covering include such areas as:

*Leadership Development * Executive Coaching * Succession Planning * Character * Job Analysis * Competency Modeling * Selection tests (e.g., job knowledge, situational judgment, physical ability, personality) * Litigation support (e.g., adverse impact, job relatedness, pay equity) * Behavioral based interviewing * Performance Management systems (e.g., performance appraisal, promotion) * Career Development systems * Assessment centers * Assessment and feedback (e.g., personality, 360) * Climate surveys

Or anything else that sounds interesting.  I’m not sure yet how often we will write – probably 2x/month.  Maybe weekly if the mood strikes!

What I’d like to know is: what would you like to know more about?  Write back and I’ll center my first real “post” on what interests you!  So let me know!  Thanks!

-Randy Lucius