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    T.Y.BMS

    V

    Semester

    HUMAN RESOURCEMANAGEMENT

    Pro ect on-

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    Succession Planning

    Professor in charge

    Prof. Arshi Siddiqui

    Compiled by:-

    Kinjal Kareliya (11)

    Neha Mhatre (20)

    Sanya Tole(32)

    Afreen Virani

    (34)

    Shafqat Shaikh

    (50)

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    Succession Planning

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    ACKNOWLEDGEMENT

    We would like to give our sincere Thanks to

    Prof. Arshi Siddiqui for assigning such a

    valuable and wonderful project, and giving us

    an opportunity to explore a full-fledged

    industry to carry out our analytical study for

    this project.

    This project will help us to curve our

    personality in the best manner, which is

    needed for professional career as well as for

    our personal life & in fact this project is the

    mirror of our aspiration.It is only through this

    project we came across the essence of the

    subject.

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    Succession Planning

    INDEXSr. No Topic Page

    No

    1.

    2.

    3.

    What is Succession planning?

    Why is Succession Planning Important?

    Ways to Implement

    5

    6

    7

    4.

    5.

    6.

    7.

    8.

    9.

    10.

    11.

    12.

    13.

    Key Factors to be considered

    Models of Succession Planning

    Succession Planning Tools

    Advantages

    Disadvantages

    Why Succession Plan Fails?

    Case study- Ranbaxy

    Suggestions

    Conclusion

    Bibliography

    15

    17

    19

    20

    22

    24

    25

    27

    28

    29

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    Succession Planning

    What is Succession planning?

    Succession planning is a process of determining critical roles withinthe company, identifying and assessing possible successors, andproviding them with the appropriate skills and experience forpresent and future opportunities.

    It involves having senior executives periodically review their topexecutives and those in the next lower level to determine severalbackups for each senior position. This is important because it oftentakes years of grooming to develop effective senior managers.

    There is a critical shortage in companies of middle and top leadersfor the next five years. Organizations will need to create pools ofcandidates with high leadership potential.

    A careful and considered plan of action ensures the least possibledisruption to the persons responsibilities and therefore theorganizations effectiveness. A succession plan clearly sets out thefactors to be taken into account and the process to be followed inrelation to retaining or replacing the person.

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    Succession Planning

    Why is Succession PlanningImportant?

    1.ASSESSING FUTURE NEEDSHaving this process in place is vital to the success of theorganization because the individuals identified in the plan willeventually be responsible for ensuring the company is able to

    tackle future challenges.Examples include such a person who is

    Suddenly and unexpectedly unable or unwilling to continuetheir role within the organization;

    Accepting an approach from another organization or externalopportunity which will terminate or lessen their value to thecurrent organization;

    Indicating the conclusion of a contract or time-limited project;

    Moving to another position and different set of responsibilities

    within the organization.

    2.INDIVIDUAL DEVELOPMENT NEEDSThe 'high potential' candidates must be carefully selected andthen provided training and development that gives them skillsand competencies needed for tomorrow's business environment.

    These high potentials will one day become the leaders of theCompany. This is why their development needs to incorporate abroad range of learning opportunities in your organization. Theindividuals should also be exposed to as much of the working

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    environment as possible so that they gain a good understandingof what the company requires to remain successful.

    3. COMPETITIONOrganizations that understand the need to manage thedevelopment of their high performers are a step ahead of theircompetitors! The effort required to establish a developmentprogram for future leaders is worthwhile because it creates amotivated and capable group of employees that are ready tomove forward in the organization when the need arises.

    4.AN AID TO PLANNING PROCESSA succession plan clearly sets out the factors to be taken intoaccount and the process to be followed in relation to retaining orreplacing the person. Succession management systems providean enabling solution for the planning and process going throughall possible scenarios and providing the best solutions andshortest paths to succession. Having a decision making body andsuccession planning process is critical. However, software can

    help make this process consistent, automated and fair.Succession planning teams can play what if scenarios to ensurethat they are thinking of all possibilities. They can search fortalent throughout the organization in different organizations andcountries. They can also ensure a continual and full pipeline oftalent.

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    Succession Planning

    Ways to Implement

    1.REVIEWING TALENT One of the challenges in all organizations is planning for HR

    needs. It is essential to adopt a disciplined approach to match HRresources with the anticipated needs of an organization. Thisincludes aligning the succession planning process with businessstrategy. The purpose of the talent review is to figure out thetalent required to implement the business strategy and constantlystrengthen the talent pool. The talent review and planning processhelps us identify talent for emerging roles in the organization,

    says Bijay Sahoo, vice-president (talent engagement anddevelopment) and head of HR, Wipro Technologies. Commitmentfrom the top management is another key factor for ensuring thesuccess of succession planning. Sahoo reveals that in Wipro, thechairman (Azim Premji) and vice-chairman and CEO (Vivek Paul)give enormous importance and their personal time for talentreview and planning, and personally supervise the developmentand implementation of the talent plan for key roles.According to Sahoo, the other essential factors are:

    (a) Accountability, as the succession planning program requiresownership at all levels in the organization. Each manager shouldbe responsible for assessing and developing the talent in his orher team.(b) Constant attention, as it can be tempting to overlook the need

    for succession planning in the face of more immediate needs.

    2.PLANNING THE PROCESS

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    The bench strength of current and future leaders gives acompetitive edge to every Organization. At Wipro, the successionplanning programme is called Talent Review and Planning (TRP),

    and it is the most critical part of the organizations leadershipbuilding and talent management process. Once our businessstrategy for the year is finalized, we identify the critical roles toexecute it. We review the talent available for those rolesinternally as well as externally. We plan for the succession ofexisting critical roles, including that of the CEO, and identifyemployees who are ready to take over the roles immediately andover the next 1-2 or 2-3 years, informs

    Sahoo. He adds that the company does developmental planning

    for each identified internal candidate in terms of job rotation,training, coaching and performance counseling. They also keeptrack of potential external candidates, and establish touch pointsfor attracting them at the appropriate time.

    The respective SBU heads and the SBU HR heads do the TRP forthe top three levels of their business. This contributes to the TRPat the Wipro Technologies level, where the chairman and vice-chairman, along with the HR head, get involved in talent planningfor the top three levels. Next is the implementation of the talent

    strategies by developing and reviewing the action plan.Infinite Computer Solutions (ICS), which has a global headcount

    of 1,800, employees have also taken up higher roles without achange in designation, with support from functional heads andsenior management teams. A skill-gap analysis is done of thecandidates, and requisite training provided to make them ablesuccessors.

    3.CLEAR FOCUS

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    It is a known fact that while most managements are interestedin developing a pool of successors for key positions, they find it adifficult task to ensure the success of their efforts. Successionplanning can get very complicated. Organizations must thereforehave a clear focus.

    Wipro has quarterly talent engagement and development (TED)reviews, and action points of each SBU and vertical are tracked.We also track the number of senior positions that are filledinternally, which gives an indication of the success of theprogramme. At the macro level, the retention figure also reflectsthe effectiveness of the succession planning programme, sinceone of the objectives of the programme is to help employees

    realize their career aspirations and thus retain them in theorganisation. Systematic succession planning does generateleadership talent, and an organisation can measure itseffectiveness by looking at the leadership talent it has createdand provided to the industry.

    PERFORMANCE/POTENTIAL GRID

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    4.THE TRAINING DIFFERENCE

    Training plays a key role in succession planning. It is imperative tostrategize, design and implement programmes to train futureleaders.Wipro has its lifecycle leadership development programmes, whichare synchronized with the roles employees play at different stagesof their corporate life. These include the New Leaders Programme,

    Wipro Leaders Programme, Business Leaders Programme andStrategic Leaders Programme for different leadership positions thatan employee will assume in the organisation.Most organizations do skill-gap analysis of the selected candidates.A schedule is drawn for the prospective individual to acquire theknowledge, skills and competencies within a time-frame, saysSunder Rajan, general manager, HR & administration, ICS. He addsthat the training could be through internal programmes or on-the-

    job (local as well as global) to gain cross-functional or cross-

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    geographical exposure for better maturity of the expertise thatwould enhance the confidence level of the person.

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    5.JUST-IN-TIME SUCCESSION

    Then theres just-in-time succession, which maps existingcompetencies of the staff to fill an important position. Successionplanning software uses competency analysis which letscompanies understand the demand side of the equation withwhat their staff has to offer. Succession planning is not an issueof a position; you can plan for two or three years, but by thattime the to-be-successor may have already left the organisation;consequently it is not relevant. Instead of looking at a job to fill,organizations should profile it in terms of competencies, go tothe data bank, and find whose competency profile matches the

    job, advises Stephen Martin, president of ITAP Europe. The keyto this is competency development across the organisation; ITAPhas done succession planning for many global organizationsthrough competency development.

    In other words succession planning comprises of theseimportant steps -

    Recruitment and staffing - you recruit superior and rightemployees

    Training and development -you train the employees todevelop their knowledge, skillsand abilities

    Performance andCompensation management -

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    prepare them for advancement or promotion into ever morechallenging roles

    Other (in which talent management plays a role) - you are

    prepared to retain or replace superior employees

    Typical activities covered by successionplanning include - Determine what roles and skills are critical for the growth of

    the company

    analyze and address the gaps revealed by the planningprocess

    identify and understand the developmental needs ofemployees to fill those positions

    ensure that all key employees understand their career pathsand the roles they are being developed to fill

    train people for skills and positions that are not presentlyexisting in the company

    understand the time needed to backfill key roles

    enrich succession plans through regular executive discussionof people and posts

    identify top performers in all departments and make sure thatthey 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 placeSuccession planning is a process by which successors are identifiedfor key positions throughout an organization including vital roles ineach department of the organization. It should take into account thestrategic vision and objectives of the organization. With goodsuccession planning in place, employees are ready for newleadership roles so when someone leaves the company, another isskilled and ready to step-up to that position. Succession planning

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    can also help develop a diverse workforce, by enabling seniormanagement to look at the future goals of the organization as awhole.

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    Succession Planning

    A Sample Succession chart

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    Succession Planning

    Key Factors to be considered

    The key factors HR professionals should consider whiledeveloping a succession plan are

    Strategic plans and future goals

    Workforce requirement

    Knowledge retention and critical roles

    Talent management strategies

    Models of Succession Planning

    There are three main models that companies use to implementsuccession 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 levelsof commitment

    Short-term or emergency replacements

    For any succession plan to be effective, it should havethese salient features:-

    The succession planning program must have the support andbacking of the company's senior level management

    Succession planning must be part of an integrated HR processthat includes training, development and performance appraisal

    Succession planning must be part of an integrated HR processthat includes training, development and performance appraisal

    Identify what skills the organization will need in 5, 10 or 15years

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    Critical positions must be identified and included in theCompany's succession planning program

    Identify high-performers that are almost ready to step into

    those critical positions Analyze the workforce and identify who will be eligible for

    retirement within the next five years

    Managers need to identify the responsibilities, skills andcompetencies that will be needed by their replacements

    A system for communicating succession planning informationto managers must be established

    A systematic approach for identifying, nominating andselecting potential successors must be established

    Background information on potential successors, such aseducation, experience, skills, appraisals and potential shouldbe reviewed

    The training and development requirements of potential successorsneeds to be determined

    The skills of potential successors must be developed through workexperiences, job rotation, projects and other challenging assignments

    A system for monitoring candidates development plan progress by seniormanagement should be established

    Succession planning must include a system for providing feedback and

    encouragement to potential successors Succession planning is basically a numbers game that requires good

    organizational skills and the ability to pay attention to details

    Finally, the succession plan must belong to the organization and not tothe HR department in order to make sure it has the attention it deserves

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    Succession Planning

    Models of Succession

    PlanningThere are three main models that companies use toimplement succession planning:

    1. Short-term or emergency replacements

    This is the most common model of succession planning andserves as a crucial point for all types of businesses. Short-termreplacement planning is focused on an urgent need caused by a

    sudden development within the organization skilled employeeleaving the company, expansion or contraction of business.Sometimes, emergency replacement planning must work toretain knowledge that is about to be lost. Emergency knowledgeretention is an option to consider if the organization is about tolose specialized knowledge and does not have a successor totake the knowledge. Emergency succession planning can comeinto play any time the organization expands in a new direction ordiscovers the talent gaps to fill the required managerial position.

    Generally, human resources will try to fill the role from within theorganization, but often go outside, if no one has been trained forthe job in the organization.

    Long-term planning or managing talent

    Talent management focuses on the future needs of theorganization. Working within the strategic framework for thecompanys future goals, senior management identifies thepositions necessary for growth and the best candidates to fill

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    those roles. Some organizations invite all employees to take partin an assessment process, while others have managers identifyleadership candidates. If companies wish to grow leaders from

    within their existing talent pool and have the time and resourcesto develop a useful program, effective talent management willbecome a key component of its long-term human capitalstrategy.

    Advantages Disadvantages Identifies a specialized

    talent pool

    Defines and builds futureskills required for thesuccess of the organization

    Motivates and retainsemployees by involvementin their career growth

    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

    2. Combination of both the plans

    This model allows senior management to plan for the long-term

    growth of both the organization and employees within theorganization and prepare for emergency replacements to ensurethat business is not affected by knowledge loss or lack of skilledemployees.

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    Succession Planning

    Succession Planning ToolsSuccession planning starts when you can accurately measure theperformance of the employees assess skills and career growthinformation. Succession planning tools need to have extensiveintegration and customization options to support all of your talentmanagement efforts.

    To identify a correct succession planning and talent managementsystem you need to have a software that -

    o Has a performance management system that delivers accurate

    datao Self-service online resumes for employees

    o Has a recruiting system that enables to transfer information onnew hires directly to your succession planning analysis and datao Integrates with your HRIS position/job management data with

    links to competencies and other qualificationso Is a powerful bench strength assessment tool that can share,

    review and analyze data to provide latest and updatedinformationo Uses easy interactive tools or matrices for assessing employee

    potential, flight risk and impact of loss

    o Provides the needed framework for effective gap analysiso Has a search capability based on multiple filters and employee

    characteristicso Provides a view of your succession plan in any format,

    including organizational charts with concern areas highlightedo Provides with a complete career inventory data for each

    employee readily at hand, managers can specify targeted futurejobs for colleagues and indicate a readiness timeframeo Customizable email reminders

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    o Informative visual reports and dashboard

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    ADVANTAGES

    Succession planning helps you take a more strategic approach toleadership development, employee skill assessment and perhapseven more important as baby boomers retire preserving criticalorganizational knowledge. With incumbents ready to go any time anexpected or unexpected change occurs in your organization, youcan ensure business continuity at all levels of the organization. themain advantage of succession planning in an organization is theactive development of a strong talent resource for the future whichis vital to attract and retain the best and key people which will help

    in present and more for the future growth of the organization.The key is to match the needs of the organization to the goals of theindividual. Keeping talented people in place by providing them withopportunities they may not receive elsewhere will create a strongerand more loyal group of future managers and executives thussaving the companys recruiting and hiring costs over the long-term

    Organizations use succession planning to achieve a number

    of objectives like: Improve recruitment process for key positions Active development of longer-term prospective successors by

    ensuring their career growth and analyzing work,responsibilities, skills and knowledge required for the future

    Audit the talent pool of the organization and that helps inallocation of responsibilities and development strategies andfill the identified talent gaps

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    Build a key talent resource of employees who share key skills,knowledge, experiences and values seen as important to thefuture of the organization

    It helps having the right people with right skills in the right jobsdoing the right things. If they people are doing wrong thingsthen you are right back where you started.

    It provides An ongoing supply of well trained, broadly experienced, well-

    motivated people who are ready and able to step into keypositions as needed.

    A cadre of desirable candidates who are being integrated into

    the company with positive goals established for themindividually.

    A flow of these capable people through various departmentswith the goals of educating them into the culture andprocesses of the company.

    Alignment of the future needs of the company with theavailability of appropriate resources within the company.

    Positive goals for key personnel, which will help keep themwith the company and will help assure the continuing supply of

    capable successors for each of the important positionsincluded in the succession plan.

    Defined career paths, which will help the company recruit andretain better people.

    Very likely, the continuous input of ideas to improve theinternal processes and procedures of the company, as well asthe opportunities to improve the offerings and services of thecompany in the marketplace.

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    DISADVANTAGES

    Succession planning suffers from pitfalls like:- Focusing only on the 'technical competencies' and failing toconsider the team-building and leadership developmentrequirements

    Underestimating people within the organization or overlookingemployees that don't appear to fit your standard 'companytemplate'

    Implementing a program that is designed for upward mobilityonly - lateral succession moves should also be included in theplan

    Failing to offer the appropriate training and developmentalopportunities

    Creating a development program that only offers generic'leadership' training programs

    And the two biggest errors made regarding successionplanning efforts:Not holding managers & leaders accountable for succession

    planning

    Not sharing the data with employees - you run the risk oflosing promising employees if they don't feel the company hasa plan for their development

    Lack of a formal written plan for each key person or position.

    A rigid, inflexible plan NOT tailored to the needs and abilities ofthe personnel involved.

    Too long a wait for real movement/promotion, potentiallyresulting in the best people leaving due to apparent inertia inthe system.

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    Too superficial an approach, with the corresponding lack of realunderstanding of the procedures, processes and requirementsof each area the individual is exposed to during the process.

    Selection of unqualified or unmotivated people for inclusion inthe succession plan. Quality of the individuals selected isparamount to the success of the process.

    The succession planning process needs to be considered aspart of the company's strategic planning process because itdeals with projecting future changes by anticipatingmanagement vacancies and then determining how to meetthese challenges.

    This is why succession planning must be a coordinated effortbetween HR and line and senior executives must ensure theline managers get involved with their own division successionplanning efforts.

    Finally, don't make the mistake of thinking succession planningis only concerned with 'upward' succession. Lateralassignments may also be used because there are feweropportunities as you progress upward in the organization.

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    WHY SUCCESSION PLAN

    FAILS? Lack of a formal written plan for the person or position(s). A rigid, inflexible plan NOT tailored to the needs and abilities of

    the personnel involved.

    Complex program, requiring considerable paper work, follow-up,

    reporting.

    Lack of availability of human and financial resources; lack of

    budgetary commitment.

    Lack of understanding how it works and how it benefits the

    organization.

    Individuals, other than the Champion, do not support the

    program.

    Superficial approach; lack of real understanding of the

    procedures, processes and requirements of each area theindividual is exposed to during the process.

    Too long a wait for real movement/promotion, disillusionment,

    may result in some people leaving due to apparent inertia in the

    system.

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    Selection of unqualified or unmotivated people for inclusion in the

    Succession Plan. Quality of the individuals selected is paramount

    to the success of the process.

    The requirements of the Managers/ Executives are not fulfilled in

    providing dedicated instructions, guidance regarding skills,

    knowledge and abilities needed for the candidates to be

    successful.

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    Case study- Ranbaxy

    In 1952, an entrepreneur Bhai Mohan Singh founded Ranbaxyas a manufacturer of pharmaceuticals in Mohali in Haryana.Like most other small pharmaceutical companies, Ranbaxy toowas mainly engaged in producing drugs by reverseengineering the molecules of established drug brands.

    In 1967, Dr Parvinder Singh (Dr Singh), Bhai Mohan Singh'sson, joined the company after completing his doctorate inpharmacy at the University of Michigan (USA). Dr Singh was avery ambitious person and worked hard to take the company

    to greater heights. In 1982, he became the company'sManaging Director .

    Brar had joined Ranbaxy in 1977 as a business developmentmanager. A thorough professional and hard worker, he soonrose through the company's ranks to become one of Dr Singh'smost important and trusted men

    In 1993, Brar became the President and a whole time Director.From the very beginning of his career at Ranbaxy, Brar was aclose confidant of Dr Singh.

    Company watchers felt that it was 'Parvinder's vision andBrar's execution which helped Ranbaxy turn into a group withmany manufacturing facilities outside India with more than2,000 overseas employees

    In the early 1990s, differences cropped up between Dr Singhand Bhai Mohan Singh over the growth route the former wascharting for the company. Dr Singh wanted to take the risk ofinvesting huge amounts into basic R&D and in expandingoperations to other countries.

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    Brar supported Dr Singh's vision of internationalizing thecompany by setting up operations in various countries likeChina, US, Ireland, and others in Europe. In the late 1990s, Brar

    chalked out a strategy to shift half the company's business tothe US, a decision which was staunchly opposed by membersof the Singh family

    Brar as Ranbaxy CEO and MD.

    When Brar took over as Ranbaxy's MD & CEO, the company didnot have any family representation on the board. It was truly acompany managed by professionals. However, by thebeginning of the 2000s, the Singh family reportedly decided totake control of the firm.

    Reportedly, he had revealed his retirement plans in 1997 itself.Brar had said that he would retire in 2002, after completing 25years with Ranbaxy

    Tempest takes over. Tempest is expected to continue tillMalvinder Singh is groomed to done the mantle

    Under the leadership of Tempest, Ranbaxy planned to focus onHR planning

    About the case

    The case discusses the CEO succession planning controversyat Ranbaxy Laboratories Limited (Ranbaxy), India's largestpharmaceutical company.

    The case describes how and why Parvinder Singh (Ranbaxy'spromoter, also CEO) believed in running the businessprofessionally and handed over the company's management toD S Brar (Brar), a professional (and a non-family member),

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    amidst stiff opposition from family members. The case thendetails how Brar transformed Ranbaxy from a small Indianpharmaceutical company into a research based global

    pharmaceutical major

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    Suggestions

    Market pressure is increasing day by day and in order to facethe market pressure the succession planning should be done in sucha way that different players of top management can handledifferent roles or one man should be able to do all work and handleall roles.The man for all seasons

    The top management is the one who heads all thedepartments and prepares rules regulations and does planning forthe organization. Thus this top management should not be inpressure so that the other employee who is being promoted to top

    management should feel comfortable at his place as the new personwill not be able to handle the pressure at the beginning.

    Every organization requires special talent for its topmanagement so the organization should fulfill all the needs andrequirements of the deserving and talented people whom they feelcan be recruited to the top management. This will ultimately help intalent retention.

    We suggest that every organization should follow successionplanning so that the top management of the organization is with

    talented people and also during emergency they have a propersubstitute for the same.

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    ConclusionBy the end of our project we come over to a conclusion related

    to succession planning that most of the companies still feel thattheir growth was limited because they did not have the right talent

    and many companies lack the right leadership talent.

    Most companies and executives do not have confidence on

    their top level executives as it is agreed to the fact by the

    employees that company leadership is key contributor to job

    satisfaction, commitment and interest to stay. Most employees

    always value leadership qualities of honesty and integrity.

    It has been seen that only 1% of companies only rate their

    succession planning as excellent and rest as fair or worse.

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    Bibliography

    Websites

    www.wikipedia.comwww.ranbaxy.comwww.managemennt.com

    Google Search Engine

    Books

    Ashwathapa- Human Resource Management

    http://www.wikipedia.com/http://www.ranbaxy.com/http://www.managemennt.com/http://www.wikipedia.com/http://www.ranbaxy.com/http://www.managemennt.com/