Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in an organization. Succession planning increases the availability of experienced and capable employees prepared to assume these roles as and when they become available. The process involves the following steps:
1. As a first step, management staffing plans should be developed. These plans should be prepared on an individual basis for all anticipated needs in the immediate year ahead and key positions, the intermediate and long-range future. The potential forecasts and overall human resources market forecasts should be reviewed and considered. The business plans should be examined to determine their effect on managerial needs. As business plans for both the near and the long-term are developed, the organizational plans and human resources forecasts should be formulated. Both of them can then be dovetailed into the staffing plans.
2. The second step concerns staffing and development. Staffing includes recruitment, selection, and placement of candidates from outside, as well as selection and movement of present employees through transfer and promotion. Development of managerial personnel should be ensured through approaches, such as formal training, both within the organization and outside, performance planning, planned job rotation, and appraisal, counseling and coaching.
3. The third step concerns creation of a friendly environment, where people give their best. The organizational environment should ensure the retention of the most desirable employees. In case the nominated successor quits, the whole exercise will have to be repeated. This will be a costly exercise.
4. The fourth step consists of doing appraisals. Appraisal and analysis should provide essential feedback on the performance of managers with the results achieved. Potential appraisal done separately will give feedback on the potential of these directors.
5. The last step in the succession planning exercise is the preparation of management resource inventory consisting of Personal data, Performance, Potential, Skills, Career goals, Career plans.
planning should help identify the best-qualified employees for filling present and future managerial vacancies.