Establishing a strong, effective, and scalable leadership pipeline is complicated, but organizations that achieve this are better able to stay steady in a rapidly changing economy. According to one survey, more than half of the respondents said their company uses a succession management process for only the most senior executive positions. What’s more, only 12 percent said these programs were integrated with other talent management initiatives such as performance management and employee development.
If the cliché that employees are a company’s greatest asset is true, then talent review and succession planning must be considered critical activities for any organization. Senior-level executives use these sessions as a high-level analysis of both business and employee performance with the focus being on the growth of the organization and current or future positions that individuals within the company may be ready to fill.
Sounds simple, but companies that get this process right not only have a strategic advantage over their competitors but also have employees who are more engaged and productive.
Improving the Effectiveness of Talent Reviews
While individual performance reviews should inform the talent review process, every company needs to have a specific model for defining and recognizing the potential that is distinct from performance. For example, high-potential individuals should have a record of high performance across many different challenges rather than just high levels of competency in some areas as you’re looking for people who are smart, resilient, and ambitious along with technically competent.
Key identifiers of an individual’s overall fit should be defined as well. An individual’s personality and capability should match the company’s unique requirements and goals. Ability matters, but when the person is also a good fit for the company, a higher degree of satisfaction and commitment is often achieved which leads to better retention rates overall.
Employee reviews are an activity that should be done frequently so the person feels continuously informed on his or her growth. Talent Reviews and succession planning do not necessarily need to happen as often or as consistently. In many cases, an annual process is sufficient, as long as the action plans developed from such meetings are regularly reviewed to make sure progress is being made.
Performance Calibration is Key
Taking steps to ensure that managers are consistent and fair when evaluating performance is critical. If the objective is to differentiate high performers and high potential individuals from those who are average or poor, then the process of assessing and rating employees must be calibrated so your organization is using accurate data during talent reviews and succession planning activities.
Performance calibration also helps to standardize the definition of high performance for the entire management team. By creating a set of common guidelines and language with which to evaluate employees, managers will be better able to justify their ratings as well as identify development plans for the future.
Calibration also helps improve the overall fairness of the process. Employees should feel as if they have been evaluated using a standard set of criteria, so they are more satisfied with compensation scales, promotions, and succession decisions. When employees feel they are being treated fairly, greater satisfaction and retention can be achieved, and complex legal challenges stemming from potentially inequitable decisions can be avoided.
The Importance of Aligning Succession & Development
Ideally, an integrated succession management process that includes leadership development and emerging talent development would be present for all management positions–not just executives. Succession management should also be aligned with the business strategy and in line with talent management goals and activities.
When viewed from this broader perspective, it becomes clear that aligning development with succession planning is the only way to proceed. Once high potential individuals are identified, action plans can be put in place to be sure the employee improves his or her skills and experience to be ready to fill future positions as well as remain aligned with the future plans for the company.
Measuring the Impact
Being able to quantify the results of talent development and succession planning is more than just being able to recognize improvements or results. These activities use important company resources and therefore a measurable ROI is necessary.
Choose which metrics mean the most to your organization. Factors such as tenure, readiness for promotion, and employee engagement levels can help quantify more abstract ideas, and production rates and revenue will put dollar values in perspective. A big-picture evaluation is often necessary, but it can also be helpful to take a micro view and evaluate the impact that development activities for an individual manager or that manager’s group have had for the company overall in terms of production or revenue.
Leveraging Outside Facilitation
It is human nature to make connections with the people we work with and organizational politics are an inevitable part of every company, even those that work hard to achieve neutral environments. Internal human resources departments may struggle to overcome some of these factors; bringing in a neutral third-party facilitator can have clear benefits.
For example, a neutral facilitator isn’t going to be worried about challenging the ideas of senior leadership if it will benefit the long-term outcome of the company while managers may back down from such confrontations. Others may have difficulty maintaining calibration standards or may lean toward including people on a succession list even if that person does not honestly have the potential to advance in the company.
A fresh, data-informed approach from a third party will ensure that your high standards are being met, that decisions are being made based on achieving business goals, and that the right individuals are selected for development opportunities and succession plans.
Finding Success with Better Talent Reviews
Integrating talent management systems such as performance, assessment, development, and succession planning is what leads to the greatest success in achieving high-impact talent management. The significance is clear for employees who have higher job satisfaction and upward mobility, and for the organization that can meet or exceed its goals through increased retention and productivity. Contact LAK Group to learn more about how we can help improve your succession planning process and help anchor a diverse and sustainable internal talent pipeline.