MHA 702 exam 3
Succession planning - ANS-useful for managerial positions (CEO, COO etc)
-prepares single designated successor
-proactive approach to ensuring continuity of leadership
Career planning - ANS-succession plans for middle managers
-focuses on many particular individuals
-prepares several candidates for a position
Senior organization leaders - ANSExpected to retire over 5 to 10 years
Organizations without succession plans - ANSUneasiness is intensified and negatively affect
performance
Leaving development of future leaders to chance
CEO is responsible for - ANSInitiating succession planning
Organizations with succession plans - ANSMore likely to have smoother leadership transition
Board of directors is responsible for - ANSAppointing a successor
Succession planning should begin - ANS4 years prior to CEO leaving
HR responsibility - ANSManaging succession planning process
Succession planning saves organizations - ANS-Money
-Executive search fees eliminated
-Maintains leadership continuity when inside person is promoted
Grooming an internal person - ANS-key element of for-profit succession planning
Hiring outside of an organization - ANS-requires 6-12 months before financial performance
regains the level that existed prior to replacement
5 principles to succession planning - ANS-board driven, collaborative process
-governing boards 2 or 3 most important task*
-communicate openly between board and ceo
-agreements made must be communicated to succeeding board leadership and must be
honored
-governing board has final say
,A continuous process - ANS-succession planning must be continuous
-successor should always be available
-significant development assignments can be arranged to ensure appropriate experiences are
encountered
Feedback loops - ANSAre critical in succession planning
Goals and timelines - ANS-created and monitored
-important for transition
-a clear exit strategy prepared for outgoing CEO
-post succession assessment to evaluate process
-HR should review effectiveness to improve process
Succession planning should begin early - ANS-for developmental assessments
-provide insight and allow skills to be acquired
-developmental tasks should be diverse to expose to departments/operations
-institutional memory preserved
-CEO personally experienced being groomed support process
Potential pitfalls - ANS-connections to social network and psychological ties to organization that
complicate effort to change
-inappropriate or limited experience
CEO/ Management team damaged - ANS-only bringing in an entire new regime can sweep
organization clean
-organization will be taking a fall anyway
-comes out of scandal, mismanagement, failed takeover
Organizations May inventory potential employees - ANSOften called assessing their inside
bench strength
If no suitable candidates - ANS-based on skills and ability
-consider hiring outside person at least 18months and up to 5years in advance
Succession planning can become costly - ANS-Due to expense of maintaining 2 individuals with
high salaries over time
CEO must be mature - ANS-May feel threatened by trained successor standing in wings, poised
to takeover at a misstep at the whim of board of directors
Why organizations have not created succession plans - ANS-require time and thought
-not a daunting task
-governing boards often lack experience with planning
-Fail to see how it benefits organization
,Organizations without plans - ANSComplain of being swamped by more immediate and
pressing issues
Leadership is - ANSCritical for long term effectiveness of contemporary organizations
CEO and governing Boards - ANSMust understand succession plans are essential strategic
goal important for continuous success of organization
Myths - ANS-boards believe succession planning hastens CEO departure.
-CEOs fear they will lose power and become lameduck leaders.
-perception could be strengthened if succession plan names next leader.
-CEOs fear if they talk about leadership change, the board will think they are planning to leave.
-boards don't want to talk about planning to imply they lost confidence in CEO
Outside hiring if CEO - ANS-risky and expensive
-excessive reliance on recruiting outside can stifle promising inside candidates
Barriers to succession planning - ANS-Composed of self imposed fears and concerns
-HR can mitigate fears by providing more knowledge about the practice of succession planning
Survey of 2,500 largest public companies - ANSThose that found themselves scrambling to find
replacement for departing CEO lost on average 1.8 billion in share holder value during the year
following CEO departure
Statistics show 15% of large companies - ANSWill be in search of a ceo this year and only half
have designated successors/succession plans
Statistics show 30% to 50% of new CEOs - ANSFail within first 15 months of the job
These CEOs are not prepared or groomed to succeed
New employees - ANSJustified and approved by senior manager coo cfo etc
Provides approved personnel requisition to hr
After approval, HR will - ANSReview position description
Check references
Verify education
Procure candidates (about 5)
Managers interview candidates - ANS-Use standardized list of questions
-Discussion of position organization and benefits
-Avoid discussing compensation(range is okay)
-Create list of acceptable candidates
, HR is familiar with - ANSAll applicable laws
Responding to references - ANS-by hr
-should not contain any subjective statements
-answered impersonally and directly from records
Information that is not in an employee file - ANSDoes not exist. Nothing is off employee record
Legal policies - ANSResponding to references many do not respond at all or limited answers to
verify titles and dates of employment
Organizations fear - ANSLegal repercussions resulting from reference requests
Possible undesirable outcomes (a conundrum) - ANS-if an employee causes harm while
working, the organization that failed to do a reference check, organization at risk of being
charged negligent hiring
-If past employer has relevant documented knowledge, but does not reveal information upon
request, former employer at risk for legal action brought by new organization or injured party
Charges of defamation - ANSRelatively common
Against hr
Responding to references requests - ANS-Must be factual from personal record
-should not attempt to interpret record
Negligent hiring cases - ANSLess common but more serious/expensive
Frequently is defined as - ANS3 times a month or more
No formal HR Department - ANS-reference requests centrally addressed uniformity
-person responsible for maintaining personnel files responds
Reference requests should be documented - ANS-added to personnel record
-date, info provided, name of organization requesting, contact info, person spoken to, and
person giving out info.
-can resolve legal claims
Supervisors should observe the rule - ANSOffer no negative judgments and convey nothing that
cannot be verified in personnel file
Weighing the risk of defamation - ANSGiver of reference must weigh risk of defamation lawsuit
by ex employee against the risk of a bad hire lawsuit by requestor or victim
Succession planning - ANS-useful for managerial positions (CEO, COO etc)
-prepares single designated successor
-proactive approach to ensuring continuity of leadership
Career planning - ANS-succession plans for middle managers
-focuses on many particular individuals
-prepares several candidates for a position
Senior organization leaders - ANSExpected to retire over 5 to 10 years
Organizations without succession plans - ANSUneasiness is intensified and negatively affect
performance
Leaving development of future leaders to chance
CEO is responsible for - ANSInitiating succession planning
Organizations with succession plans - ANSMore likely to have smoother leadership transition
Board of directors is responsible for - ANSAppointing a successor
Succession planning should begin - ANS4 years prior to CEO leaving
HR responsibility - ANSManaging succession planning process
Succession planning saves organizations - ANS-Money
-Executive search fees eliminated
-Maintains leadership continuity when inside person is promoted
Grooming an internal person - ANS-key element of for-profit succession planning
Hiring outside of an organization - ANS-requires 6-12 months before financial performance
regains the level that existed prior to replacement
5 principles to succession planning - ANS-board driven, collaborative process
-governing boards 2 or 3 most important task*
-communicate openly between board and ceo
-agreements made must be communicated to succeeding board leadership and must be
honored
-governing board has final say
,A continuous process - ANS-succession planning must be continuous
-successor should always be available
-significant development assignments can be arranged to ensure appropriate experiences are
encountered
Feedback loops - ANSAre critical in succession planning
Goals and timelines - ANS-created and monitored
-important for transition
-a clear exit strategy prepared for outgoing CEO
-post succession assessment to evaluate process
-HR should review effectiveness to improve process
Succession planning should begin early - ANS-for developmental assessments
-provide insight and allow skills to be acquired
-developmental tasks should be diverse to expose to departments/operations
-institutional memory preserved
-CEO personally experienced being groomed support process
Potential pitfalls - ANS-connections to social network and psychological ties to organization that
complicate effort to change
-inappropriate or limited experience
CEO/ Management team damaged - ANS-only bringing in an entire new regime can sweep
organization clean
-organization will be taking a fall anyway
-comes out of scandal, mismanagement, failed takeover
Organizations May inventory potential employees - ANSOften called assessing their inside
bench strength
If no suitable candidates - ANS-based on skills and ability
-consider hiring outside person at least 18months and up to 5years in advance
Succession planning can become costly - ANS-Due to expense of maintaining 2 individuals with
high salaries over time
CEO must be mature - ANS-May feel threatened by trained successor standing in wings, poised
to takeover at a misstep at the whim of board of directors
Why organizations have not created succession plans - ANS-require time and thought
-not a daunting task
-governing boards often lack experience with planning
-Fail to see how it benefits organization
,Organizations without plans - ANSComplain of being swamped by more immediate and
pressing issues
Leadership is - ANSCritical for long term effectiveness of contemporary organizations
CEO and governing Boards - ANSMust understand succession plans are essential strategic
goal important for continuous success of organization
Myths - ANS-boards believe succession planning hastens CEO departure.
-CEOs fear they will lose power and become lameduck leaders.
-perception could be strengthened if succession plan names next leader.
-CEOs fear if they talk about leadership change, the board will think they are planning to leave.
-boards don't want to talk about planning to imply they lost confidence in CEO
Outside hiring if CEO - ANS-risky and expensive
-excessive reliance on recruiting outside can stifle promising inside candidates
Barriers to succession planning - ANS-Composed of self imposed fears and concerns
-HR can mitigate fears by providing more knowledge about the practice of succession planning
Survey of 2,500 largest public companies - ANSThose that found themselves scrambling to find
replacement for departing CEO lost on average 1.8 billion in share holder value during the year
following CEO departure
Statistics show 15% of large companies - ANSWill be in search of a ceo this year and only half
have designated successors/succession plans
Statistics show 30% to 50% of new CEOs - ANSFail within first 15 months of the job
These CEOs are not prepared or groomed to succeed
New employees - ANSJustified and approved by senior manager coo cfo etc
Provides approved personnel requisition to hr
After approval, HR will - ANSReview position description
Check references
Verify education
Procure candidates (about 5)
Managers interview candidates - ANS-Use standardized list of questions
-Discussion of position organization and benefits
-Avoid discussing compensation(range is okay)
-Create list of acceptable candidates
, HR is familiar with - ANSAll applicable laws
Responding to references - ANS-by hr
-should not contain any subjective statements
-answered impersonally and directly from records
Information that is not in an employee file - ANSDoes not exist. Nothing is off employee record
Legal policies - ANSResponding to references many do not respond at all or limited answers to
verify titles and dates of employment
Organizations fear - ANSLegal repercussions resulting from reference requests
Possible undesirable outcomes (a conundrum) - ANS-if an employee causes harm while
working, the organization that failed to do a reference check, organization at risk of being
charged negligent hiring
-If past employer has relevant documented knowledge, but does not reveal information upon
request, former employer at risk for legal action brought by new organization or injured party
Charges of defamation - ANSRelatively common
Against hr
Responding to references requests - ANS-Must be factual from personal record
-should not attempt to interpret record
Negligent hiring cases - ANSLess common but more serious/expensive
Frequently is defined as - ANS3 times a month or more
No formal HR Department - ANS-reference requests centrally addressed uniformity
-person responsible for maintaining personnel files responds
Reference requests should be documented - ANS-added to personnel record
-date, info provided, name of organization requesting, contact info, person spoken to, and
person giving out info.
-can resolve legal claims
Supervisors should observe the rule - ANSOffer no negative judgments and convey nothing that
cannot be verified in personnel file
Weighing the risk of defamation - ANSGiver of reference must weigh risk of defamation lawsuit
by ex employee against the risk of a bad hire lawsuit by requestor or victim
