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Lovely Professional


Human Resource Management

Succession Planning in the Government Sector

Submitted to: Submitted by:

Mr. Sunil Budhiraja Pramod Ku. Tiwari
Lecturer, LSM Roll no. - B44
LPU Reg.No-
Sec. -

1. Declaration Page no: 3

2. Acknowledgement Page no: 4

3. Introduction Page no: 5

4. Why succession planning Page no: 6

5. Executive summary Page no: 8

6. Models of succession planning Page no: 9

7. Literature review Page no: 11

8. Succession planning methodology Page no: 13

9. Advantages of Succession Planning Page no: 14

10. Results Page no: 15

11. Conclusion Page no: 16

12. References Page no: 17

13. Bibliography Page no: 17


I, Pramod Kumar Tiwari student of Lovely Professional University have completed the
Project on:


The information given in this project is true to the best of my knowledge.



First of all I would like to thank the Lovely Professional University and take the opportunity
to do this project as a part of the MBA-IT.

Many people have influenced the shape and content of this project, and many supported me
through it. I express my sincere gratitude to Mr. Sunil Budhiraja for assigning me a project
on HRM, which is an interesting and exhaustive subject.

He has been an inspiration and role model for this topic. His guidance and active support has
made it possible to complete the assignment.

Last but not the least I would like to thank the Almighty for always helping me.

What is Succession Planning?

Succession planning is a process of determining critical roles within the company, identifying
and assessing possible successors, and providing them with the appropriate skills and
experience for present and future

In other words succession planning

comprises of these important steps -

 Recruitment and staffing - you

recruit superior and right
 Training and development -
you train the employees to
develop their knowledge, skills
and abilities
 Performance and
Compensation management -
prepare them for advancement
or promotion into ever more
challenging roles
 Other (in which talent
management plays a role) - you are prepared to retain or replace superior

Typical activities covered by succession planning include -

• Determine what roles and skills are critical for the growth of the company.
• Analyze and address the gaps revealed by the planning process.
• Identify and understand the developmental needs of employees to fill those positions.
• Ensure that all key employees understand their career paths and the roles they are
being developed to fill.
• Train people for skills and positions that are not presently existing in the company
• Understand the time needed to backfill key roles.
• Enrich succession plans through regular executive discussion of people and posts.
• Identify top performers in all departments and make sure that they are engaged and
satisfied to stay with you for a long period.
• Continually review and check the process of succession and whether planned
individual development has taken place.

Succession planning is a process by which successors are identified for key

positions throughout an organization including vital roles in each department of the
organization. It should take into account the strategic vision and objectives of the
organization. With good succession planning in place, employees are ready for new
leadership roles so when someone leaves the company, another is skilled and ready to
step-up to that position. Succession planning can also help develop a diverse workforce,
by enabling senior management to look at the future goals of the organization as a whole.
So the key issues the HR professionals should consider while developing a succession
plan are –

 Strategic plans and future goals

 Workforce requirement
 Knowledge retention and critical roles
 Talent management strategies

Why Succession Planning?

Are you ready to continue business without interruption after losing a strong and effective
leader in your organization? Leadership is and has always been a relatively scarce commodity
within companies. First, you need to analyze what has made the business successful. Does
that success rely on skills or knowledge of the leader that could leave? Next, you need to look
at the future of the company. Where are you going and what skills do you need to get there
and once you are there? Is that talent currently in your leadership team?
Other important questions to consider are - existing and future market competition, required
technology know-how, talent pool of existing employees, and management hierarchy and
reporting structure.

Answers to these questions can provide the basis for decisions on whether the business can
continue without the leader, how it would continue without the leader, who would lead and
how ready they are.

The recruitment of top talent is too expensive due to the rising executive search costs and
increased hiring contract requirements, not to mention the lack of knowledge about company
culture and inner workings. Recent research has shown that company find more effective
leaders by developing from their internal talent.

A careful and considered plan of succession ensures the least possible disruption to the
successor’s responsibilities and therefore the organization’s business and efficiency.

Succession planning plays a vital role and is necessary when a key executive or employee is:

 unwilling to continue the role within the organization

 accepting an offer from another organization which will terminate or lessen their
value to the current organization
 Indicating the completion of a short-term project or task assigned or moving to
different position and different set of responsibilities within the organization

A succession plan clearly sets out the factors to be taken into account and the process to be
followed in relation to retaining or replacing the person. Succession management systems
provide an enabling solution for the planning and process – going through all possible
scenarios and providing the best solutions and shortest paths to succession.

Having a decision making body and succession planning process is critical. However,
software can help make this process consistent, automated and fair. Succession planning
teams can play “what if” scenarios to ensure that they are thinking of all possibilities. They
can search for talent throughout the organization – in different organizations and countries.
They can also ensure a continual and full pipeline of talent.

Overview of issue: Government sector needs a effective succession planning


Government sector is effected most by “baby-boomer” retirement wave than any other
organizations. For example , BHEL, government organization has faced a recent problem
when his chairman has resigned from the post but the organization has noone to feel the post .
organization was running for 3 months without chairman and they encurred loss of crores. So
this ensuring retirement wave and the goal of achieving greater organizational efficiency ,
makes succession planning a top priority for government organizations.

Finding and Solving barriers to success………

Many government organization does not know how to approach the succession planning
process. Most of the senior executive is influenced by the political leader and challenges in
implementing an effective successor selection process that abides by the merit system
principles. Government can learn from their peers in private sector can apply the same
technique in government agency.

Government can be transformed by the succession planning………

This report discusses the bodies and structures responsible for succession planning at profiled
organizations and how these ensure leaders’ involvement in and support of succession
planning. Leadership talent identification and selection, leadership development programs,
and methods for measuring and improving succession planning process effectiveness are also
discussed, as summarized below.

I- Succession Planning II- Leadership Talent

Structure Identification

Succession Planning Structure Identifying Candidates’ Interest in

& Responsibilities Participation

Succession planning is a component of Identifying employees’ interest in

larger strategic human capital management participating in succession planning-
initiatives. Therefore, profiled organizations focused development programs is the
task different groups within HR with first step in candidate identification,
succession planning responsibilities such as gleaned via the following
the following: strategies:
- HR department as a whole - Mandatory performance review
- Specific HR functions, such as leadership component, stating or denying
development interest in positions of greater
- One central succession planning team leadership.
within HR - Voluntary application process.
- HR staff on corporate HCM Project

Ensuring Leaders’ Involvement Succession Planning


Ensuring leaders’ involvement and support Succession planning program

is vital to succession planning program participants are assessed and
success. Profiled organizations use the selected by such methods
following tactics to ensure their leaders’ as the following:
involvement in succession planning:
• Open enrollment
• Indirect or direct succession planning • Supervisors’ selections
accountability via performance appraisal • Leadership development
• Succession planning training for professionals’ selections
organization’s leaders. • Cross-departmental group of

III- Leadership Development IV- Succession Planning


Leadership Development Programs Tracking Program Results

After interested and qualified succession Continuous evaluation and
planning candidates are selected, they are improvement is vital to succession
enrolled in development programs planning effectiveness. Profiled
appropriate to their job level. organizations commonly
Leadership programs developed by profiled track the quantitative and qualitative
companies target wide array of employee succession planning program
populations, including the following: measures including:

• Non-supervisory employees • Program participation rate

• Middle management • Participants’, mentors’ and
• Senior managers and executives feedback.
• Participants’ post-program progress.
• Post-program participant promotion

There are three main models that companies use to implement succession planning:

 Short-term planning or emergency replacements

 Long-term planning or managing talent
 Combination of above plans

Organizations should take a close look at their goals and levels of commitment before
choosing a model that best suits their needs.

 Short-term or emergency replacements:

This is the most common model of succession planning and serves as a crucial point for all
types of businesses. Short-term replacement planning is focused on an urgent need caused by
a sudden development within the organization –skilled employee leaving the company,
expansion or contraction of business. Sometimes, emergency replacement planning must
work to retain knowledge that is about to be lost. Emergency knowledge retention is an option
to consider if the organization is about to lose specialized knowledge and does not have a
successor to take the knowledge.
Emergency succession planning can come into play any time the organization expands in a
new direction or discovers the talent gaps to fill the required managerial position. Generally,
human resources will try to fill the role from within the organization, but often go outside, if
no one has been trained for the job in the organization.

 Long-term planning or managing talent :

Talent management focuses on the future needs of the organization. Working within the
strategic framework for the company’s future goals, senior management identifies the
positions necessary for growth and the best candidates to fill those roles. Some organizations
invite all employees to take part in an assessment process, while others have managers
identify leadership candidates.
If companies wish to grow leaders from within their existing talent pool and have the time and
resources to develop a useful program, effective talent management will become a key
component of its long-term human capital strategy.

The advantages of this model include:

 Identifies a specialized talent pool.

 Defines and builds future skills required for the success of the organization
 Motivates and retains employees by involvement in their career growth

Some of the disadvantages of this type of model include:

 Expensive and time consuming
 Existing employee-base may not have required skills and experience for key
posts and outside hiring can lead to resentment
 Managers may be frustrated by not being allowed to choose a successor

 Combination of both the plans :

This model allows senior management to plan for the long-term growth of both the
organization and employees within the organization and prepare for emergency replacements
to ensure that business is not affected by knowledge loss or lack of skilled employees.
HR professionals will find that the advantages of succession planning greatly outweigh the
disadvantages, which can be overcome by proper planning and communication within the
employees and senior management.

1. John Beeson (2000), of Beeson Consulting, acknowledges that specific succession
practices and plans differ from one organization to another, yet he identifies two emerging
themes. The first is that priorities have been placed on retaining top talent, and second, is a
desire to allow for succession planning to become more “flexible” and “action-oriented”
(Beeson, 2000). Beeson identifies a correlation between succession planning and retention
of highly valued talent, and describes how this has caused these efforts to “be pushed down
to lower levels within the organization” (Beeson, 2000). To address the desire for
succession planning to become more flexible and action-oriented organizations are
emphasizing that these plans contain simplicity; focus; open communication; be driven by
line managers; require executive involvement; consist of leadership success profiles; utilize
rigorous assessment and talent pools; involve individual development planning; create
linkages to staffing, diversity, and reward systems; and finally, established measurement of
effectiveness of these efforts.

2. James Caudron ( 1999) These similarities are: forecast business and leadership needs;
create a list of necessary competencies; assess the internal talent and identify gaps; provide
developmental opportunities; hold employees accountable for their own development; and
make succession planning an integral part of business planning (Caudron, 1999). Caudron
(1999) offers these six similarities of succession planning efforts of successful
organizations; however, it is important to note from other works that measuring the
effectiveness of the plan should be included as a seventh step .

3. Randall R. Richards(1997) As stated, it is important to forecast or assess future

business, organizational, and leadership needs. Randall R. Richards, speaker, board
governance facilitator, and author of How to Build and Effective Board, indicates that an
organization may begin to identify future leaders by assessing future agency needs before
selection occurs (Richards, 1997). Organizations should decide if they desire a ‘fresh
thinker,’ ‘generalist,’ ‘specialist,’ ‘leadership qualities and experience specific to key
areas,’ or ‘ a leader with prestige or significant contacts valuable for opening doors to
advancement (Richards, 1997). Motorola’s method of assessing organizational needs is a
three-phase annual strategic planning process. Motorola assesses a long-range planning
effort, conducts a technology review, and conducts an organization and management
development review . Once completed, Motorola ensures that the organizational structure,
and the current and future leadership needs are aligned.

4. Stephen L. Guinn (2000) , of PSP Human Resource Development, describes creating a

list of necessary competencies by developing a competency model that defines specific,
observable behaviors that illustrate each identified competency (Guinn, 2000). American
Express Financial Services uses three kinds of competencies to create leadership profiles .
These three kinds of competencies are leadership competencies such as the ability to lead
change, functional competencies that include technical knowledge about concepts such as
recruitment and marketing, and personal competencies like resilience and achievement
drive . Beeson reports that Dell identified characteristics of its own most successful
managers, and factors that cause people to fail within the organization (Beeson, 2000).
From this research Dell listed critical management competencies like priority setting,
customer focus, problem solving, drive for results, and effective team building .

5. Sidney kess(2006),Two recent court decisions (Estate of True and Estate of Blount)
involving buy-sell agreements highlight the importance of informed succession planning.
This article focuses on recent developments and practical tips for family and non-family
business planning. For example, it is not a good idea for a client to have the buy-sell
agreement drawn up by his real estate lawyer. Asking a client for a copy of the buy-sell
agreement (assuming one exists) and all the insurance policies is a great way to start the
engagement. A buy-sell/insurance check-up often uncovers costly errors that can be

6. Deborah B.Balser(2009),Leadership succession, and the associated changes that new

leaders make, can have profound impacts on nonprofit organizations. Despite its
importance, there is limited research that examines succession from the point of view of
employees and considers how their interpretations of organizational identity and proposed
change shape their responses to leadership transitions. In this article, we examine the
dynamics that ensued when the founder of Friends of the Earth, a nonprofit environmental
organization, stepped down. The case shows how the succession process can expose latent
disagreement about an organization's identity and give rise to internal conflict. These
patterns suggest that leaders must be attentive to different and often conflicting
interpretations of an organization's identity.

7. Paul Byham (1999) , Use of talent pools or acceleration pools are common methods in
success planning. These are described as pools of employees that are highly talented and
possess the leadership competencies identified by the organization (Byham, 1999). Those
candidates can then be placed in ‘stretch’ positions for accelerated development. Stretch
positions are described as those offering the best learning and highest-visibility
opportunities (Byham, 2000). Colgate-Palmolive describe stretch assignments as those
“that build new skills and abilities by taking the individual out of his ‘comfort zone’”.

8. Joseph S.Bower(2007) ,In his analysis of 1,800 successions, Harvard Business School
professor Bower found that companies performed significantly better when they appointed
insiders to the job of CEO. Yet Bower finds far too many companies have no succession
plans; as a result, when the time comes to name a new chief executive, more firms turn to
outsiders. Both insider and outsider CEOs have strengths and weaknesses at the start.
What companies must do is find a way to nurture what Bower calls inside-outsiders -
internal candidates who have outside perspective. Often such executives have spent much
of their time away from the mainstream of the organization, and away from headquarters,
living with new opportunities and threats. Nascent inside-outsiders should enter the CEO-
training process by the time they are 30 and be given the opportunity to manage a whole
business, so that they become good insiders. But they also need to be mentored with an
eye toward preserving their outsider perspective, so they learn how to turn their new ideas
into great businesses and are protected from old-timers who might be inclined to teach
them a lesson.

9. Mark Angott(2009), It is estimated that 60 percent of today's CEOs in the banking

industry will be retired by the year 2016, and there aren't enough candidates in the
leadership pipeline to handle the demand. The competitive advantage in the years ahead
will go to those banking institutions that have the foresight to plan for their future talent
needs. In order to avert a crisis in leadership, management must seriously consider their
current mission plans - one year out, five years out, ten years out - and determine whether
they have the people in place to achieve those goals and objectives. A formal evaluation
process should reveal areas in the organization that require bolstering. The benefits of
thoughtful succession planning are many, and they go beyond finding replacements for
departing management. It reduces the likelihood of crisis if a key employee leaves and
keeps the mission of the bank on track. Perhaps just as importantly, it forces accountability
and talent assessment at least once or twice a year.

10. Marshall Goldsmith(2009)There are many reasons, both personal and professional, to
invest in developing successors from internal candidates. Many executives say that
succession planning "feels like a waste of time" and yet they acknowledge a lack of bench
strength. As a result, the continuity and performance of the business are at risk. When the
author discussed these challenges with his friend Jim Moore, former CLO of three
companies, they came up with four ways for making leadership succession more effective.
These are: 1. Change the name of the process from Succession Planning to Succession
Development. 2. Measure outcomes, not process. 3. Keep it simple. 4. Stay realistic. These
four suggestions help shift your focus from planning to development -- and achieve bench
Succession planning starts when you can accurately measure the performance of the
employees assess skills and career growth information. Succession planning tools need to
have extensive integration and customization options to support all of your talent management

To identify a correct succession planning and talent management system you need to have a
software that –

 Has a performance management system that delivers accurate data.

 Self-service online resumes for employees.
 Has a recruiting system that enables to transfer information on new hires.
directly to your succession planning analysis and data.
 Integrates with your HRIS position/job management data with links to .
competencies and other qualifications.
 Is a powerful bench strength assessment tool that can share, review and .
analyze data to provide latest and updated information.
 Uses easy interactive tools or matrices for assessing employee potential, flight
risk and impact of loss.
 Provides the needed framework for effective gap analysis.
 Has a search capability based on multiple filters and employee characteristics.
 Provides a view of your succession plan in any format, including
organizational charts with concern areas highlighted.
 Provides with a complete career inventory data for each employee readily at
hand, managers can specify targeted future jobs for colleagues and indicate a
readiness timeframe.
 Customizable email reminders.
 Informative visual reports and dashboard.


We are currently witnessing the impact of an emerging and dire necessity of the new trend of
succession planning and talent management systems. HR professionals no longer think just
about the replacement of talent, but also focus on development of skills sets and knowledge of
employees within the organization and how they can cope-up to the wider roles and
responsibilities which are in-line with the company’s goals.
Succession planning helps you take a more strategic approach to leadership development,
employee skill assessment and perhaps even more important as baby boomers retire –
preserving critical organizational knowledge. With incumbents ready to go any time an
expected or unexpected change occurs in your organization, you can ensure business
continuity at all levels of the organization.
Organizations use succession planning to achieve a number of objectives like:

1. Improve recruitment process for key positions

2. Active development of longer-term prospective successors by ensuring their
career growth and analyzing work, responsibilities, skills and knowledge
required for the future
3. Audit the ‘talent pool’ of the organization and that helps in allocation of
responsibilities and development strategies and fill the identified talent gaps
4. Build a ‘key talent resource’ of employees who share key skills, knowledge,
experiences and values seen as important to the future of the organization

To summarize, the main advantage of succession planning in an organization is the active

development of a strong ‘talent resource’ for the future which is vital to attract and retain the
best and key people which will help in present and more for the future growth of the
organization. Have the right people with right skills in the right jobs doing the right things. If
they people are doing wrong things then you are right back where you started.
The key is to match the needs of the organization to the goals of the individual. Keeping
talented people in place by providing them with opportunities they may not receive elsewhere
will create a stronger and more loyal group of future managers and executives thus saving the
company’s recruiting and hiring costs over the long-term.

From the above discussion we can say that Effective succession planning plays an important
role in organization growth. Every organization should have succession planning programme
so that they can remove future contingency . It is good to have succession planning than
depending on the outside source. Because depending on the outside source can cost you much
more than succession planning cost. That is the same happened in case of BHEL a public
sector organization.
From the above discussion we come to conclusion that the government sector needs an
effective succession planning. Otherwise they can suffer the problem same faced by BHEL
during last year 2009, mainly the NAVRATNA companies of INDIA needs to have
succession planning. Because most of the companies in NAVRATNA are the core sector of
INDIA which effects GDP of INDIA, and can effect the economy of INDIA. So effective
succession planning will be very helpful to INDIA SUCCESS.

 Ray Blunt, "Organizations Growing Leaders," IBM Center for the Business of
Government (2001).

 General Accounting Office, "Succession Planning and Management Is Critical

Driver of Organizational Transformation."

 Corporate Leadership Council, Hallmarks of Leadership Success, Washington:

Corporate Executive Board (November 2003).

 Ray Blunt, "Organizations Growing Leaders."

 Corporate Leadership Council, Hallmarks of Leadership Success (Presentation

Materials), Washington: Corporate Executive Board (November 2003).