Impact of Succession Planning on Employee Retention
MASTER THESIS WITHIN: General Management NUMBER OF CREDITS: 15
PROGRAMME OF STUDY: Engineering Management AUTHOR: Basit Javed & Muhammad Jaffar
Master Thesis in General Management
Title: Impact of Succession Planning on Employee Retention Authors: Basit Javed & Muhammad Jaffar
Tutor: Tommaso Minola, Ph.D. Date: 2019-05-20
______________________________________________________________________________ Abstract
The rise in the employee turnover rates is increasing the concerns amongst the organizations in retaining the employees in the workplace. The higher turnover rates are threatening the business capability in earning higher profits. Grounded by the leadership and motivational theories, the following study aims explore that how the succession planning strategies could help in retaining the employees in the organization. Swedish organizations are chosen as the area of the study. In order to fulfill the purpose of the research, the data has been gathered from primary and secondary tools. The secondary tools used in the study are past papers related to succession planning and employee retention as well as information collected through SHRM/Globoforce employee recognition survey and OECD statistical data. The primary tools used in the study are semi-structured questionnaire and face to face interviews. The data analysis involved the evaluation of the secondary data, face to face interview and classification of themes on the basis of semi-structured questionnaire. By means of the thematic analysis, four main themes were emerged. The findings showed that in order to retain the employees fruitfully, Swedish organizations should work on planning career development programs, identify and develop the talent pool and offer non-monetary rewards to the employees. This will enable them to be committed with the company and stay with it for a longer time. The implications for the study is that it will bring a positive social change by adapting the effective succession planning practices which will as a result help to increase the morale of employee and enhance the business profits by retaining the talented employees in the organization. The study has some limitations on the basis of which, it is suggested to the future scholars to conduct a quantitative study by taking a longitudinal approach in order to validate the findings on the statistical grounds as well. Key Terms: Succession Planning, Employee Retention, Leadership, Reward Management, Career Development
Acknowledgment
We would like to express our sincere gratitude to everyone who is involved in completing this
study. Firstly, we would like to express our appreciation to our supervisor, Tommaso Minola, who was
providing us valuable guidance and feedback through the study. Secondly, we would like to thank our peer
group for demonstrating constructive criticism and giving valuable input during the seminars. Thirdly, we
would like to thank all the respondents who participated in the data collection process which eventually led to
complete our findings
.
Jönköping International Business School
Basit Javed & Muhammad Jaffar
May 2019, Jönköping, Sweden
Table of Contents
Abstract ... 1
1. Introduction ... 6
1.1 Background... 6
1.2 Problem Statement ... 7
1.3 Significance of the Study ... 8
1.4 Operational Definitions of the Constructs ... 8
1.4.1 Talent Management ... 8
1.4.2 Career Management ... 8
1.4.3 Reward Management ... 9
2. LITERATURE REVIEW ... 9
2.1 INTRODUCTION ... 9
2.2 Theoretical Foundation of the Study ... 9
2.3 Succession Planning ... 10
2.4 Succession Planning Practices... 10
2.5 Main Components of Succession Planning ... 11
2.6 Employee Retention ... 12
2.7 Talent Management ... 13
2.8 Career Management ... 14
2.9 Performance Management ... 15
2.10 Training and Development ... 16
2.11 Rewards Management ... 16
2.12 Career Development ... 17
2.13 Employee Recognition ... 18
4
2.15 Purpose of the Study ... 19
2.16 Final Aim of Thesis ... 20
2.17 Research Objectives ... 20 2.18 Research Questions ... 20 2.19 Theoretical Framework ... 21 2.19.1 Explanation ... 22 2.19.1.1 Talent Management ... 22 2.19.1.2 Career Management ... 22 2.19.1.3 Reward Management ... 22 3. Research Methodology ... 23 3.1 Introduction ... 23 3.2 Research Design ... 25 3.2.1 Philosophy ... 25 3.2.2 Approach ... 26 3.2.3 Strategy ... 27 3.2.4 Choices ... 27 3.2.5 Time Horizon ... 29 3.2.6 Data Collection ... 29 3.2.6.1 Questionnaire ... 29 3.2.6.2 Semi-Structured Interviews ... 30 3.2.6.3 Face-to-Face Interviews ... 31 Interview Questions ... 31
3.2.7 Sample Population and Sampling Method... 31
3.2.8 Data Analysis and Presentation ... 32
5
3.2.10 Ethical Consideration ... 34
4. Data Analysis ... 36
4.1 Thematic Analysis of Semi-Structured Questionnaire ... 36
4.1.1 Theme One: Meeting Organizational Needs ... 36
4.1.2 Theme Two: Sourcing Strategies for Internal Candidates ... 37
4.1.3 Theme Three: Career Development Leads to Retain Employees ... 38
4.1.4 Theme Four: Non-Monetary Incentives Attracts More ... 40
4.2 Face to Face Interview Analysis ... 41
4.2.1 Interview Questions ... 41
4.2.2 Interpretation ... 41
5. Discussion ... 47
6. Conclusion and Recommendation ... 52
6.1 Conclusion... 52
6.2 Recommendation in Action ... 54
6.3 Research Implication ... 56
6.4 Implications for Social Change ... 56
6.5 Suggestions for Future Research ... 57
1. Introduction
The aim of this chapter is to offer an overview about the topic of thesis.
1.1 Background
Staff turnover in the business environment which is varying day by day and is getting highly competitive is increasing in most of the companies in the world. This results in changing the demographics of the workers, rise in the global competition and technology that calls for the development of the talent pool to take the leadership responsibilities and pull the businesses towards the next level. There are some of the managers that feel that there is an issue of high attrition rate which seems to be threatening for the growth of the firms according to Pattanayak (2005). There are about 47% of the companies that are going through shrinking or closing up due to the absence of competent managers and as a result, there is no one there to encourage the employees and retain them (Nzuve, 2008). The issue of worker’s turnover also gets costly for the firms. Apart from recruitment and selection process, the cost linked with making new workers records in the human resource department and in making the payroll records and providing the safety materials while the employee leaves the job is very high that is why it gets expensive for the companies to bear the turnover cost (Woods, 1997).
Succession planning and employee retention besides HR planning are related to staffing and both the terms have a direct impact on eliminating the staff turnover (Ruthwell, 2005). The major motive of succession planning is to make sure that there is the presence of preferred managers to fill the job vacancies made by promotions, retirement etc. makes sure that a corps of manager is present to fill the jobs that might be created in future (Armstrong, 2003).
It sometimes takes years to groom the managers; however, a succession plan is present mainly for the aim to assure the constancy in leadership (John, 2007). Moreover, succession planning assists the companies in planning for any disasters brought by losses of workers particularly due to death and early retirements. Incorporating succession planning is linked with the actual practices conducted in the firm. One fruitful implementation of succession planning enables firms to develop strong leadership and healthy relations to reach organizational goals.
While employee retention is referred to all the efforts of the management required to make sure that employees do not quit the company (Nzuve, 2010).
1.2 Problem Statement
Succession planning implementation is limited in an era of flexible and rapidly changing organizations where the concept of succession planning has got outdated. Majority of the companies give a lot of central focus on the talent management and development processes by forgetting the fact that talented and ambitious workers do not prefer to stay for longer times to save their management positions (Armstrong, 2012). Presently, most of the firms are not implementing succession practices that are must to create high potential workers in the management position. This results into making the employees struggle to fill the job post especially at the level of management and they are left dissatisfied among the workers which also impact their performance badly (Eshiteti et al., 2013). The talent war has posed a bigger challenge for organizations in today's era.
There have been a number of studies on the topic of succession planning and employee retention (Chepkwony 2012). Those researches have however not reported the specific findings; instead, they have observed the mixed findings. Such as Eshiteti et al (2013) investigated the impact of succession planning on the retention of staff members among the sugar companies in Kenya. The study found that the majority of the workers have a higher job contention as there was proper succession planning done for them by their organization. This showed a positive impact on staff retention among sugar firms. Another study investigated the relationship between talent management, succession planning and organizational strategy among the commercial banks (Chepkwony, 2012). It was found that there is a direct impact on talent management practices and succession planning.
It was also researched by a study where succession strategy and performance of small and medium companies were investigated (K' Obonvo et al., 2013). The findings showed that there is a significant relationship among succession planning and performance. Thus, no such study was seen locally that has investigated the impact of succession planning practices on employee retention in Sweden. The present study, therefore, aims to fill this gap and seeks to answer the critical research question: how succession planning influences employee retention in Swedish firms?
Gap and its Relevance
Employee retention has been one of the top workforce management challenge highlighted by 47% of the HR leaders in the survey done by Society for Human Resource Management (SHRM)/Globoforce employee recognition report (SIA, 2018). The employee retention challenge has been consecutively coming on the top of the list for the last three years. According to the survey done, one of the major challenges that came across was employee turnover and succession planning. Given the survey, it can be demonstrated that succession planning needs to be looked upon by the companies under every industry and the issue needs to be solved as soon as possible.
1.3 Significance of the Study
The study will be significant for the senior managers and higher authority managers as it will help them to give insights on the fact that how can they make sure that their implemented succession planning is geared towards employee retention. Moreover, the study may also be productive for the government of Sweden to modify their policies that upholds professionalism particularly at the time of implementing succession planning. Apart from this, scholars and academic researchers will be benefitted from the study as they will get interesting insights that can create a foundation for the future researches. Besides all of this, the study will also benefit the public and private institutions of Sweden, by creating practical cognizance about effective management of succession planning in order to enhance the employee retention.
1.4 Operational Definitions of the Constructs 1.4.1 Talent Management
Talent management is defined as the unified strategy which is formulated to assist the organizations in order to make the possible use of human capital in the present time and in future as well (Lewis & Heckman, 2006). This is done to ensure the maximum return from their talent by offering an attractive organizational culture that motivates happiness and commitment.
1.4.2 Career Management
Career management is defined as the process that plans and modifies the advancement of individuals within the company as per the organizational needs and objectives (Greenhaus et al., 2010).
1.4.3 Rewards Management
Rewards management is linked with the formulation and incorporation of strategies and policies aiming to give rewards to the people in an equal manner and according to the organizational value. (Armstrong & Murlis, 2007).
2. LITERATURE REVIEW
This chapter aims to provide the reader with the frame of reference by explaining the previous studies and putting light into what previous scholars have to say about the topic.
2.1 INTRODUCTION
This chapter will present the literature review and highlight the theoretical foundation of the study by giving a glimpse of the previous studies done on succession planning and employee retention. The following literature has been reviewed from authentic journal articles, papers, and reports.
2.2 Theoretical Foundation of the Study
The present study will use the leadership theories and motivational theories as the theoretical foundation to enhance the literature review. This is due to the fact that succession planning is related to develop the leaders at all levels and motivate the employees while managing the retention of the managers in the organization. Leadership is defined as the process of influencing people to do their best and attain the desired result (Armstrong, 2009).
There are a number of leadership theories that have not covered the deeper aspects (Lord & Hall, 2005). From this perspective, emergence theory of leadership development was recognized which is based on the experience of ministry leaders over the lifetime. It was also explored by Stadler (2008) that this theory is also applicable to the development of leaders who work in the business environment as it extends their corporate leadership progress and also boosts their executive coaching programs by augmenting succession strategies.
On the other hand, motivation theories can be categorized into two different perspectives; one is from the content and the other is process theories. Under this perspective, content theories
deal with the fact that what motivates the people and what are the individual needs and goals just as proposed by Maslow (Lee & Hanna, 2015), Herzberg and two-factor theory. On the contrary, process theories are related to the process of motivation which is related to the fact that how motivation will occur as proposed in expectancy theory, goal theory, and equity theory. Apart from this, contemporary theory on motivation involves self-worth theory that illustrates that individuals should be encouraged primarily by the need to see themselves as competent.
2.3 Succession Planning
Succession planning is defined as a process whereby the companies make sure that employees are being recruited and continuously developed to fill the competent key roles in the organization (Armstrong, 2003). It is also defined as the process of identifying successors for key posts and planning of career moves further for the probable successors. Hence, career management is corresponding to the management of succession planning (Armstrong, 2012).
In a study, succession planning was defined as the process under which companies recognize and establish internal individuals with the objective to fill the key job positions within the workplace (Casceo, 2006). It is the process where the company makes sure to supply future key job successors in order to manage the career of the workers to cater for the organizational needs and inspirations (Dessler, 2000). Another study defined the process of succession planning management as the process of evaluating the right talent in the workplace with the objective to seek answers for the three main questions relating to need for potential successor to cater organizational prolong needs, need for successor’s efficiency and need for the successor’s right skills and competency for future necessities of the organization (Armstron, 2012). Two types of succession planning were cited in one of the studies including formal and informal succession plans where the previous manager recognizes his own replacement and the company then assess that individual by means of examining strategic plans and incorporation of promotion from within policy (Baum, 1999).
2.4 Succession Planning Practices
According to Berthal (1999), succession planning practices involves having a support system with senior management and involving the line managers in recognizing potential candidate and integrating the succession management plans with the business strategies (Stadler, 2008). In another study, it was identified that succession planning practices must be implemented
after recognizing the individual needs and then incorporating it (Aswathappa, 2013). Some of the most common practices identified by previous studies under succession planning include self- development, talent development, diversity management, and job rotation.
It has been founded by one of the scholars that seeking for the preferred replacements comes under the procedure which needs a complex design along with an accurate strategy (Mathur & Agarwal, 2013). It has been further suggested that there must be the three stage model for the companies in terms of categorizing their succession planning and development practices. The first phase over here is recognizing the primary roles for the succession and replacement planning and then identifies the skills and competencies needed to fulfill that role. The second phase involves the evaluation of people under the criterion. The last stage is addressing the talent pool that will help to fill those roles and establish the employees to get into the advance stage of their career. In view of these stages, it has been asserted by other scholars that some other practice scan also be adapted in attaining the succession planning that are adequate enough for the firm (Ramthun & Matkins, 2014). These practices include making the aims clear and demonstrating the needs of the present performance of the employees.
2.5 Main Components of Succession Planning
It has been claimed by one of the previous researchers that succession planning and management must be linked with the strategic vision and goals of the company. A study has suggested four main important factors of succession planning (Stadler, 2011). The first factor is addressing the probable successor. Under this process, a preferred employee is selected on the basis of skills in order to take the future post of the leader or upper management. This process involves recognizing one or multiple employees with whom the company should start its succession planning practices. The next component is the rapidly changing management style. The succession planning needs the employees to be taught and managed. The antecedent should at the first place forgo the personal management style and act like the teacher while giving the mentorship to the employees. The subsequent component is the training and development of the successor. Under this stage, the success of the potential descendant relies on attaining the proper training and development. The final factor is the act of choosing the successor. At this phase there are multiple factors to consider while choosing. Among them some of the essential factors include knowledge, skills, competencies and experience of the employee.
It has been further stated that workers having the higher level of satisfaction in their jobs are usually committed with the company as they have this belief that the company has a good future for them and the company is going to take good care about the contributions done by them (Stadler, 2011). Employees that seemed to be committed with their jobs are more likely to get successful in their jobs and stay in the employment for a longer time. This also raises their retention possibilities and their productivity. In view of this, another study added that the fruitful succession strategies initiated with the effective practice of hiring. This is due to the fact that employees that are competent enough are proven to stay longer in the firm (Singh & Gupta, 2015). It was also added that inefficient hiring practices raises the turnover rates in two main ways (Papay & Kraft, 2016). The first one is the new recruiting that is not compatible enough will leave the company instantly and the second way is that the staff could turn into becoming frustrated at a higher level as they feel that a good burden have been placed on their performance.
2.6 Employee Retention
Employee retention is the ability of the company to retain its employees and the practice which is undertaken by the companies to reduce the turnover rate of the workers (Ramlall, 2004). The four different types of employee turnover include involuntary turnover, voluntary turnover, avoidable and unavoidable turnover. In a study, it was stated that factors of retention are recognized by the outcome of labor turnover and risk assessment that must be conducted timely. Employee retention requires closer attention to efficiency and equity (Mikovich & Boundreau, 1988). It needs a proper definition as per the culture of the organization and its efficient implementation.
It has been noted by the previous scholars that by means of loyalty strategies, the companies have the essentially higher employee efficiency and lower employee retention (Liao & Chuang, 2004). The employee retention strategies are taking a rise as being the most important workforce organizational challenge in the contemporary world. From the early nineteenth century, the previous scholars have been demonstrating not just about the findings based on why the employees are leaving the organization, but also they have highlighted that how the employees should be made engaged with the company and in what way they would stay with the company. This can be done through the well-implemented employee retention practices that as a result raise the tenure of employee more as compared to the remuneration for themselves by
reducing the turnover costs and raising the productivity of employees.
The most essential retention strategies are the ones linked with the monetary and non- monetary rewards. There have been many studies that have focused on the impact of employee compensation rewards and recognition on the turnover of employees. With regards to salary, a study has found that the employees that are not paid sufficiently usually end up leaving the job as this is quite important for them to be paid adequately (Bacon & Hoque, 2005). Along with this, there was another survey done for the employees in the hospitality sector, the study found that the annual pay is quiet less among the employees and this was again leading the employees to leave the company (Caraher, 2011). Employees are going to stay in the company as long as they are satisfied with the pay. Though, many of the studies have identified that compensation highly impacts the staff turnover and compensation given in the form of base might not attract the staff or retain them (Rynes et al., 2004).
The most essential predictors of retention involve the intrinsic fulfillment and the working conditions instead of focusing on the financial rewards as noted by the previous scholars. Moreover, the lack of professional growth and development often impacts the turnover rate rather than creating a balance among the life and work. The past studies based on the concept of employee retention have explained that employees that are giving the central focus to their jobs and more towards looking at doing the good add in improving the satisfaction level of clients in the workplace (Iqbal & Hashmi, 2015). Linking to this, it has been added by other scholars that a business is needed to encourage its employees in terms of retaining them. This can be done by means of various strategies (Mendes & Standler, 2011).
It has also been studied by Hong et al (2012) that employees in regards to giving importance to the career development, skills attainment and effective performance management are looking forward for their career progression from their company. The study found that training and development followed with performance management and compensation is very important for retaining the employees. However, it can be observed that multiple studies have explained the importance of higher participation of the workers and the way it could enhance in retaining them. While summing it up, it can be stated that the previous studies have described the concept of retention as a constant relation amongst the workers and the workplace.
2.7 Talent Management
People who are aware of recognizing, developing and retaining the talent. Talent is referred to those people who have the ability to create a difference in organizational performance (Kotler, 1973). The difference can be created either by serving instantly or in the longer term by determining the highest level of potentials. Talent management is defined as the process of recognizing, establishing and recruiting capable individuals in the workplace (Armstrong, 2009). While talent relationship management is defined as the process of making strong relations with the people in their role. It is done with the objective to engage talent where talented individuals‟ stay committed and dedicated to the workplace. The concept of talent management has various meanings under a theoretical and practical perspective. Taking the broader perspective of the term, it is related to recognition, establishment, engagement, and deployment of talent within the organizational context.
Talent management is seen as a newer way of handling people's succession planning and predicting their career opportunities. Talented management is important to engage employees within the organization (Cole, 1997). In order to do so, the company is entitled to do some activities which involve attracting and retaining talent. Establishing and managing the talent and planning for their career to retain them fruitfully. While the organizations are attracting the talent, they should keep in mind that the word talent is now viewed as a key differentiating point in human capital management in order to leverage the competitive advantage (Bratnagar, 2003). Employer branding has also become an essential strategy these days as it helps to attract the right talent as people who are looking forward to working with great brands. Networking, on the other hand, is also great to assist in getting the right talent to the company (D‟Souza, 2008). It was suggested by Dell and Hickey (2002) while establishing the talent, developing the employees' talent is crucial factor to be added in the company‟s strategy and in succession planning that cannot be avoided.
Talent management preserves a systematic view by looking at the risks and challenges that are being presently faced by the organizations (Katiake, 2013). These challenges involve, lack of job security and opportunities for promotion, inadequate working conditions, and inflexible working hours, no concern for employees' health and safety and absence in the engagement of employees which results into poor work-life balance (Greenberg, 2004).
2.8 Career Management
individuals are moved in an orderly and less predicted sequence (Taylor, 2011). The concept of career management encompasses staffing, personal development, special assignments either at home or abroad (Armstrong, 2009). Career development, on the other hand, acts as a bridge for the workers pursuing to develop. Armstrong in his studies has listed down a number of practices related to career management in the form of formal mentoring, career counseling, performance appraisal and assessment centers for the employees to enable them to develop their career. It was argued by a study that the thinking of an individual regarding his/her career is impacted by aging (Walker, 1985). As the individual gets mature, the career progression of that individual is impacted by his psychological needs which include identity, growth opportunities, and self- actualization.
This argument was also backed up by another study where it was mentioned that attitude and psychological factors have a greater influence on career progression (Tom, 1997). Apart from this, some other career interventions in the workplace involve notifications for the vacancy, career paths being clear and career planning followed with training and development of the personnel in the organization (Wather, 1981). The researcher further stated that development centers and mentoring programs followed by coaching and counseling are some important aspects of career management of the employees. The career path should be established in a way that it must have four main elements including real progression, flexible job, organizational structure and management needs which must involve particular skills and knowledge and other attributes required.
2.9 Performance Management
Performance is referred to as efficiency in working and a way in which an individual performs a job and is judged by their effectiveness (Cascio, 2006). Armstrong (2009) also defined in his study that one of the main features of performance management is that it integrates the aims and objectives of the organization to the systematic work target for every employee. Effective performance management can significantly contribute to the achievement of business objectives while maximizing the participation of employees. It was also stated in one of the studies that performance appraisal offers a record of every worker‟s performance against the set of objectives (Tom, 1997). The employees should also be allowed to reflect their passion and ideas with regards to how they are progressing in their careers.
middle age in order to make sure that there is stability within the organization (Sony, 2013). An effective performance appraisal system can enable to improve the employee performance by turning a system into the objective one and relevantly liked to the job which is equally fair for all the employees. As per the recent development in the performance appraisal, it has been seen that performance appraisal entails upward appraisal involving employees rating their managers' performance in the majority of the cases by using the questionnaire. This is primarily done to improve the managerial effectiveness and leadership by means of feedback and helps to raise the voice of employees and boosts their empowerment as well. In this regard, it was argued by Raymond (2011) that the process of appraisal should be culturally neutral to the best possible way.
2.10 Training and Development
Companies having the practice of training for its employees, find it quite easier to get highly talented staff members (Redman & Wikinson, 2001). This is due to the fact that the workers who are trained enough have the possibility to be more flexible and take multiple jobs in the workplace. Employees that are trained enough are proved to be more committed and dedicated to their work and have less probability to leave the job. Therefore, companies are responsible to conduct the sessions of learning among the staff members during which the workers will be allowed to share ideas and information with each other and their view with regards to how their beliefs vary. This will enable the company to shape the employees‟ personal and professional lives. Analyzing the training needs is very important for the design of effective training and the companies should establish training programs to equip the workers and managers with the sufficient skills in order to make them more effective in working with them and turning them into a diverse team (Roger & Graham, 1998). It was explored in one of the studies that most of the approaches related to employee development falls into the four categories that involve formal education, evaluation, job experience, and interpersonal relations. Evaluation in the form of development initiative needs gathering of data and offering the feedback to the workers with respect to their behavior and communication. There are also some of the workplaces that have well-organized assessment centers where the worker's performance is evaluated by using multiple tools whole offsite.
2.11 Rewards Management
policies which is related to reward the workers fairly and constantly as per their value to the companies and to support the workplaces to reach their strategic objectives and goals (Thomas, 1990). A company gets its equity only when it is successfully able to reward its employees in relation to others within the workplace. A constant approach for rewards management means the decision making in regards to offer pay must not vary randomly and without any cause among the people. The pay decision should not differentiate on the basis of discrimination and must be fair enough for everyone. The term transparency means that people should know how the reward process functions and what is affected by the employees. Workers must be given a voice while developing reward policies and they should also be given this right to offer explanations of every decision made for them. Moreover, they should also be given a place where they must be listening carefully about what is affecting them.
Reward management has a major role in staff retention. From this perspective, if the employees are not seeing that they are being rewarded, this will result in them to look for other opportunities (Armstrong, 2009). Managers have higher accountability over here by making sure that they are rewarding their workers to retain them. This will help them to compete with their rivals successfully as having talented employees in their own place can give good competition, while losing them can make their survival difficult in the market. An effective reward needs a package which is attractive to make people satisfied and will stop them to look for other career development opportunities (D’Souza, 2008). In some of the companies, a seniority reward policy is made to offer an incentive to the staff when they prefer some alternative work.
2.12 Career Development
Career development is defined as an incentive that helps to motivate the employees and enables the employees to excel in their career. Career development is one of the effective ways through which the companies could retain the employees. The concept is composed of different efforts which are bound to assess the skills and competencies of the employees (Sharf, 2016). This helps in recognizing the probable career development for the employees and making them develop in different areas by offering them training programs and other offers such as enlargement in job and job enrichment (Brwon, 2002). It is mostly the case in the businesses that the programs related to career development are cost effective which means that each of the program under the career development serves in enhancing the deployment of workers which makes it worth the investment. The importance of career development is that it helps the workers
in matching their career paths with the challenges and opportunities that is experienced by them in the workplace.
The significance of career development includes a fruitful appointment of the employees in the position that would enable the organization to meet the business needs and the wants of employees as well (Oplatka & Eizenberg, 2007). The career planning of the worker is linked with the development where the organization gives a core focus in developing its employee by offering training programs and career tool kits, adopting such kind of planning strategies related to career helps the companies to have dedicated employees that are also committed to work for their company for a longer time. Additionally, it was stated that the phase of stagnation in the career takes place when one employee is staying at the same position for a long time. This also impacts the loyalty of the workers and the willingness to stay with the particular workplace (Byars-Winston, 2010). This can be dealt with by offering the distinct training programs that will help in improving the engagement of the employees and will enable them to stay committed with the company. A training mainly provided in the workplace will enhance the views of the employees towards the company successfully in a positive manner (Gray, 2014).
2.13 Employee Recognition
There are number of studies that are addressing the effect of compensating the workers in the form of rewards and by recognizing them among the teams and among the entire workplace (Bradler et al., 2016). One of the studies showed that employee engagement has today become the largest concern among the employees and the companies. There have been various studies pinpointing that how the recognition and rewards are influencing employee engagement and in what ways are they serving in retaining the employees at the workplace. In this view, a study conducted by Luthans (2000) showed that recognitions done in the form of appreciations and by offering autonomy to the employees enables the companies to engage the employees with the workplace and keep them motivated. Though, the concept of recognition is not new, but in the present business environment, it is turning into a more strategic approach in aligning the business objectives with the desired behaviors of employees (Arthur, 2018).
2.14 Job Promotion Under Maslow’s Needs Hierarchy Theory
With respect to the job promotion, the Maslow’s hierarchy of needs recommends that the motivation of the employee relies on the needs that are different at different levels of life (Armstrong, 2009). The Maslow hierarchy of needs relates to the idea that individuals are being
encouraged by means of the five kinds of needs that are not satisfied. The first need begins with the most basic need which is also defined as the physiological needs. These needs are then progressed with the higher level of needs that are known as self-actualization needs. This need is never satisfied. After the needs of an individual are met in the initial stage, it then helps to motivate the employees to look for the higher level needs. This pyramid of need defined by Maslow is shown in a hierarchical form due to which it is termed as vertical scale of needs or hierarchy of needs (Jonas, 2016). Linking this to the employee level of satisfaction, it can be demonstrated that employees also go with the organization by following the same level. Firstly, they look for the basic needs to be fulfilled from the company’s side and then upon the satisfaction of those needs, employees then look for the esteem needs that they expect should be given to them in the form of recognition and non-monetary rewards.
Linking to this, one of the scholars has enforced the need for continuous reassessment of the people in the organization. This is due to the fact that people often change over the time. It has been further added that translating the Maslow’s hierarchy of needs in organizational practice, it can be demonstrated that the organizations could apply the lower level needs by providing the rest breaks and refreshment breaks and by offering the physical comfort on the job. (De Vito et al., 2018) This can be done by offering flexibility in work and giving the reasonable working hours to the employees. Maslow’s theory is therefore relevant to the concept of job promotion in a way that the employees are being shifted on the basis of the vertical scale at the time of their employment experience. This also restores loyalty and helps the workers in staying in their respective organization for a longer time as per the fact that the employees feel self- actualized.
2.15 Purpose of the Study
The purpose of the study is to see the impact of succession planning on employee retention. In order to critically answer the research question, the study has further chosen three main sub-factors of succession planning that are career management, talent management, and rewards management. Given the previous literature, it has been found that previous studies have shown the impact; however, very few studies have talked about what to do next. Therefore, this study aims to do so by choosing Sweden as a reference country. Choosing Sweden as the primary country of research will give ease to the researchers while collecting the data within
one's own country. One more reason behind this is that very minimal study has been done on Sweden context with respect to the area of study (Hyter, 2007). Keeping this in view, this study has prompted to choose Sweden context and adding value to the literature and assisting Swedish companies by introducing strategies to be implemented by them to retain their top and talented employees.
2.16 Final Aim of Thesis
The aim of the study is to see the impact of succession planning on employee retention. In order to critically answer the research question, the study has further chosen three main sub- factors of succession planning that are career management, talent management, and rewards management.
2.17 Research Objectives
The major research objectives of the study are as follows:
To investigate the impact of succession planning on employee retention
To investigate the impact of talent management on employee retention
To assess the impact of career management on employee retention
To examine the impact of rewards management on employee retention
2.18 Research Questions
The critical research question of the study is as follows:
How succession planning works on employee retention?
The sub-research questions of the study are as follows:
How talent management works on employee retention?
How career management works on employee retention?
How rewards management works on employee retention?
2.19 Theoretical Framework
The theoretical framework seeks to analyze the relation between the dependent and independent variable. In the present research, the dependent variable is employee retention and the independent variable is succession planning for which the sub-variables are talent management, career management, and reward management. The aim of the theoretical framework is to assess the impact of sub-variables of succession planning for successful employee retention. The core focus of the study is assessing the relationship which will be reflected by the framework below. The following framework is reflecting the mutual connection as both the variables are affecting one another.
Figure 3.1: Framework design
Talent Management
Career Management
Rewards Management
Emp
lo
y
ee
Re
ten
ti
o
n
S
u
cc
ess
io
n
P
la
n
n
in
g
2.19.1 Explanation
Below is the explanation of independent and dependent variables:
2.19.1.1 Talent Management
Talent management is defined as the process of recognizing, establishing, recruiting and organizing the talented people in the organization (Armstrong, 2009).
2.19.1.2 Career Management
Career management covers recruitment, personal development and growth programs that will help to bridge the career of the employees who seek to progress further.
2.19.1.3 Rewards Management
Rewards management is related to the formulation and implementation of strategies and policies related to reward the employees equally and fairly with the objective to give value to the employees and help the firm to reach its strategic goals (Thompson, 2002).
3. Research Methodology
The following chapter aims to explain about the methods by which the entire research has been conducted. This chapter will offer an overview about the rational preference of the researchers by justifying each of the approach taken in the thesis.
3.1 Introduction
Research is defined as the systematic search for the relevant facts and data on a particular topic (Kothari, 2004). A research method is on the other hand defined as the method and principle for doing something such as to conduct the research on the specific research issue. The objective of the methodology is to portray about the methods being used while carrying out the study and analyzing the techniques used by recognizing what has worked for the researchers and what is needed to be altered to make it better. This chapter will look on to address that in what way a researcher has completed the data collection process by justifying all the methods chosen over the other methods (Robbins, 2014). This section will also reflect on the data collection process and the resources used. The study will also include research design, target population, and ethical considerations, in the end, to justify that the research has been conducted within the ethical boundaries.
The above literature review depicts the impact of succession planning on employee retention. Succession planning is considered as the process of shaping the forthcoming managerial needs of the organization and also developing skill pool of employees to effectively meet the needs of the organization (Tracy Taylor, 2004). Moreover, the literature review also explains that it is necessary to have succession planning, since; it helps in running the business smoothly. In addition, succession planning assists to identify, retain and train the individual to acquire the key positions that play an essential role in achieving projected and existing business objectives (Omur Hakan Kuzua, 2013). According to Voslobana (2012), succession planning not only helps to fulfill the expected positions but also encourage innovation (Pennell, 2009). He further added that the systematic process of developing employee should be proactive so that it does not affect the process of the organization.
Moreover, succession planning can be considered as a controlling tool for dynamic organizations, so that they can effectively match with human capital and can fulfill the goal of the organization (Beardwell & Claydon, 2007). This study has further added three main sub- factors of succession planning that includes talent management, career management, and rewards management to conduct the research in depth. On the other hand, it is also necessary for the researchers to access the concept from a different perspective. Since the methodology is used to conduct research successfully; this chapter will shed light on a methodology that has been used to conduct this research.
It is considered important for researchers to implement an appropriate methodology to obtain flawless, accurate and required results in accordance with the specified objectives. Further, the chapter in research paper discussing methodology clearly demonstrates the technique and strategy used in the research, research choice, philosophy, approaches, and the techniques regarding the collection of data, which supports researcher in exploring the study in a detailed manner. This study is based on an analytical research choice, which means that this study is based on critical analysis and in-depth research. In addition, there are two choices that can be applied to conduct the study in an effective manner, the researchers can use a qualitative or a quantitative technique, or even can use multi-method approach. However, there is no restriction on using any technique, but the researchers decide the techniques on the basis of the nature of the study. This study is based on purely qualitative research technique, in which the researchers have conducted semi-structured open-ended interviews as well as secondary tools to collect the data. Since it is qualitative research; the respondents have shared their practical experiences for succession planning and its impact on them. Their experiences have significantly helped the researchers in conducting the study. The techniques used in this research also support to assess the validity and reliability of the research. In addition, this chapter provides a clear demonstration regarding the technique and tool used to evaluate findings and results.
The primary objective of this study is to identify the impact of succession planning on employee retention; therefore, the researchers have used qualitative data, which has been collected from respondents. Further, this chapter also assists in illustrating the philosophy, time horizon, and data collection method, whether it was non-probability convenient sampling or simple random sampling. In addition, it also depicts the conceptual framework, ethical considerations, and limitations to ensure the validity and reliability of the research.
3.2 Research Design
It has been suggested by Yin (2013) that formulating a research design is not only related to writing but it is also concerned with the composure of work. The topic chosen for the study is evaluating the impact of succession planning on employee retention and to assess succession planning, the study has divided into career management, talent management, and rewards management. The following study will adapt the research design founded by Saunders et al., (2015). The research founded by Saunders has multiple layers that are identified by peeling off the research onion. The onion has the inner and outer layers which give the reader an in-depth understanding how the research has been conducted by the researchers by covering all the essential points including philosophy, choice, strategy, approach, time horizon and data collection.
Figure 3.2: Research Design
3.2.1 Philosophy
Research philosophy is defined as the belief under which the data is gathered and used for analysis. The research philosophy is the foremost layer of the research onion. It demonstrates the perception of the researcher related to philosophy. There are three types of research philosophy; positivism, realism, and interpretivism (Biesta and William, 2003). The positivism approach believes that the reality is stable and is seen from the objective view (Lewin et al.,
2005), While the interpretive has the belief that there should be a subjective interpretation. It is related to study a subject in the natural environment and with all the acknowledgments that cannot be ignored as it has an impact on the phenomenon of the study. The present research is relying on the interpretive approach as the research is a qualitative one and the data collected in the study will be secondary data which will be collected from the other authentic articles. This approach is preferable as it will allow examining the micro approaches of the subject in a detailed manner and will help to see how social reality is constructed through meanings (Lin, 1998).
The interpretive approach has some disadvantages also which are related to the subjective nature of the approach and the fact that this approach has a bigger room for biases on behalf of the researcher. The primary data yielded from the interpretive approach cannot be generalized as the data is highly impacted by personal views and values. Hence, the reliability and representativeness of the data are damaged to a specific extent as well (Williams, 2000). Apart from this, the positive side of the approach is that under the approach, qualitative research areas including such as cross-cultural differences in the organization, issues of the ethics, leadership, and analysis of the factors affecting the leadership could be studied in a greater level of depth. The secondary data is linked with the high level of validity and under the interpretive approach; data in such studies tend to be trustworthy and honest. Normally, while following the interpretive approach, research philosophy in the thesis depends on the level of the analysis and particularly in the expanded analysis, the approach helps to justify the choice and analysis.
3.2.2 Approach
The second layer is known as the research approach. The research approach is considered as procedure and plan that consists of the steps of broad assumption to the detailed method of collection of data, interpretation, and analysis. It is defined as the plan and the process that comprise of the broad assumptions to an in-depth method of gathering the data, analyzing it and then interpreting in the end. It is based on the characteristics of the research problem. It can either be deductive or inductive. Deductive approach is defined as the approach that is usually started with a hypothesis (Hyde, 2000) while the inductive approach would normally use the research questions to narrow the scope of the study (Thomas, 2006). In the present study, the researcher is considering the inductive approach. Inductive approach is also defined as inductive reasoning. This normally begins with the observation and theories and it involves the search for
pattern from the observations and explanations being developed by the researcher (Duibhir et al., 2016). Under the inductive approach, the researcher has first made the direction of the study on the basis of the previous literature and by identifying the gap from the previous papers, purpose of the study and research questions are formulated.
Under the inductive reasoning, the study has begun with the detailed observations that have further moved to more abstract generalization of ideas. The research has at first tended to establish empirical generalizations and then develop the research questions to be investigated in the study (Hamilton et al., 2017). The benefit of taking inductive reasoning is that it fuels more exploration in order to see that whether the judgment done or the observation done is right or wrong. By using the inductive approach, the researcher gets the benefit to explore the given context more and to turn the investigation into a more accurate one.
The method helps to offer the adaption of a mathematical approach for reaching the adequate conclusion so it could explore the inconsistencies in the social phenomena. The approach is preferred as a powerful technique for assessing the phenomena (Galleria et al., 1989). While doing a study in social sciences, it is difficult to prove certain generalizat ions by the controlled experiments. This is as per the reason that economic phenomena are related to human behavior that varies constantly. Under such a situation, the method seems to get more reliable for drawing generalized conclusions.
3.2.3 Strategy
The third layer which is research strategy illustrates the foundation of the study. The research strategy can be normally based on experiments, case studies, grounded theories, and action researches. In this present study, the researchers will take experimental analysis where it will see the causal relationships among the variables and will collect the data by an open-ended questionnaire. The questionnaire will comprise of three main sections including the background information, section, planning practices questions, and employee retention questions. The questionnaire will be administered in two ways, firstly by drop and pick and secondly by electronic mail for the ones who are far.
3.2.4 Choices
The research choice is the fourth layer of the study which shows the method preferred by the researchers. The research choice can either be a mono, mixed or multi method. The research choice in the present study is mono-method as the researchers have taken a single method that is
qualitative analysis. The reason behind choosing the qualitative analysis is that it focuses on the metrics of data that is gathered more on the flexibilities of what can be discovered in that information collected. This enables the data to have a boosted level of detail to it that can offer more opportunities to collect insights from it while examining, many of the research opportunities should follow a particular pattern of questioning, data gathering and information reporting.
Qualitative analysis at this provides a distinct approach. It could adapt to the quality of information that is being collected. If the accessed data would not seem to provide any results, the research can quickly shift things and pursue to collect data in a new direction (Marrying, 2004). This, as a result, provides more chances to collect important clues about any subject rather than being confined to a limited and self-fulfilling view. Humans have two distinct operating systems among which one is a subconscious method which is quick and primitive observations made on the existing data while the other is slow and more technical, willing to assess all the sources of data before deciding. Most of the forms of research depend on the second operating system while ignoring the instinctual nature of the human mind (Patton, 1990). Qualitative research doesn't avoid this gut feeling, instead, it holds the data that can be gathered and is often better for it. The study is an open-ended process and when a researcher is prepared properly, the open-ended structure of the qualitative study makes it possible to obtain shallow responses and balanced thoughts to collect the information from individual's response. This is essentially important as it is an emotional response that often fuels a researcher’s decision or influences its behavior.
It can be a complex task to assess data that is attained from individual sources as many of the respondents answer in a subconscious way and in a way where they seek to answer in the manner the other person is seeking for. They want to please someone with the answer minimizes the accuracy of the data and overpowers someone’s creativity (Mcnamara, 2005). By accepting the qualitative research method, it gets possible to encourage the respondent creativity by enabling individuals to reflect more appropriately along with legitimacy. This culminates to make the data more appropriate and leads to make predictable outcomes. Consumer patterns can often alter the dimes by leaving the brand out in the cold as to what happened. The qualitative analysis enables for a greater understanding of the consumer attitudes offering an explanation for the events that take place outside of the extrapolative matrix that has been developed by the
previous research. This enables the optimal brand-consumer relationship to be sustained.
One disadvantage is the amount of trust that is placed on the researchers to collect the data and then draw the conclusion as the invisible data under the qualitative study is huge. The study is purely relying on the skills of the researchers being able to connect all the dots (Cassel & Symon, 2004). If the researchers are capable of connecting the dots adequately, then this can make the data meaningful and assist the researchers to follow their research goal, but if the researchers could not find the way to connect the dots, then it gets very difficult to draw fruitful conclusions. In order to cope up with this, there must be alternative ways to attain the results such as along with taking the open-ended questionnaire tool, the researcher is also taking the previous literature to see the consistency of the results and compare them in the end.
3.2.5 Time Horizon
The time horizon is defined as a time frame taken to complete the study. It can be cross- sectional or longitudinal. The following study will take the cross-sectional approach under which the researcher will gather the data at the specific time frame. Under the cross-sectional study, the researcher will get the benefit to either approve or disapprove assumptions. The cross-sectional approach is also not costly and gives a cost advantage to the researcher. The data gathered under the cross-sectional approach will be helpful for future researchers as well as it can be used for other researches also. The findings from the cross-sectional data will also enable the researchers to develop new theories and studies out of the present study.
3.2.6 Data Collection
This data collection method is used to analyze and record the opinion of the respondents. It is not only their opinion, but their beliefs, ideas, and experiences on the topic also help in conducting research. In addition, the respondents are asked to provide the researcher with detailed information. Moreover, this provides the researcher with more in-depth insight into the social phenomenon. In comparison with the qualitative method such as questionnaire and survey, interviews are considered as a convenient method to collect the data. Furthermore, when the researcher is dealing with a sensitive topic, interview technique is considered as more significant. The data will be collected in the following ways:
3.2.6.1 Questionnaire
The researchers have made a self-administered semi-structured questionnaire. This technique is used to collect data from respondents through a series of questions. In addition, in
the case of the questionnaire, the respondents have heterogeneous and are widely scattered groups of respondents. Hence, questions are designed keeping in view the element the respondents have to fill the questionnaire. Further, the responses from the participants can be collected by mailing them the questionnaire; the questionnaire can also be provided to the respondents by hands and can be collected after a few hours.
Considering this research, primary data collection technique will be used, since, it is primary qualitative research. The researcher will use the open-ended questionnaire. For the collection of primary data, the researcher will use the open-ended questionnaire. The questionnaire will comprise of three main sections including the background information, section, planning practices questions, and employee retention questions. The questionnaire will be administered in two ways, firstly by drop and pick and secondly by electronic mail for the ones who are far. The interview will be taken in two ways, firstly by letting the employees fill the questionnaire and secondly by asking questions to those employees by face to face interview who are not willing to fill the questionnaire. Taking questionnaire helps to increase the authenticity of the study as this kind of examination is a more flexible and cost-effective approach and produces richer data as compared to other techniques. Moreover, it also allows the respondents to do not get exposed to any invasive techniques and withhold treatment which makes this method more ethical (Mathers et al., 2007).
3.2.6.2 Semi-Structured Interviews
Interviews can either be structured, semi-structured or unstructured. Under the qualitative study, the interviews are seemed to be subtler, allowing the conversations to take place that further leads to the collection of more sufficient and authentic data (Quinlan, 2011). In this study, semi-structured interviews have been chosen by using open-ended questions. The benefit of taking the open-ended questions is that it enables the thoughts of the respondents to be reflected in an in-depth manner and motivate greater communication among the respondents and researcher (Noel, 2009). A semi-structured interview is the one where the researcher has the number of questions in mind and it does not follow any specific sequence of asking the questions. This enables the respondents to freely respond in the manner they want to (Bryman & Bell, 2011). This also allows the researchers to introduce new points where the researchers can take advantage and ask new questions as well.
3.2.6.3 Face-to-Face Interviews
By means of the face-to-face interviews, the study has the chance to detect the responses of the respondents at hand (Quinlan, 2011). With respect to this, it seems to be justifiable that attempting to ask questions face to face might be more accurate and would offer unbiased answers by the employees without thinking for a while and stating what they actually feel that might not have happened while writing the answers. Below are the interview questions asked from the respondents.
Interview Questions
How does you organization currently measure up to employee development initiatives?
How do you, as the top manager, ensure that you have put the processes and programs in
the right places to create a room for the future talent and leadership?
What are some of the internal aspects that affect the implementation of succession
planning successful?
What are your views regarding the succession planning?
How will organizations leverage their human resources to provide the competitive
advantage to succeed?
Why and how should an organization create a system that recognizes individual and
organizational growth planning?
Why and how can we integrate and coordinate career planning and succession programs?
Are there some challenges that usually affect the ability of company in recruitment and
selection?
How do you think, training and development can be characterized as healthy and
productive for the organization?
For employee development, your company mainly focuses on what kind of training
programs and at what frequency?
Discuss some of the retention challenges with regards to the current managers
Do you believe that encouragement of diverse team work and career development is
effective for workforce in place? If yes, how?
How rewards (monetary/ non-monetary) management is being conducted at your
3.2.7 Sample Population and Sampling Method
The sample population of the study will be employees from different companies in Sweden. The accurate findings highly rely on the way the selection has been done for the sample (Kumar, 2011). Sampling can either be probability or non-probability. Probability sampling relates to the random sampling where everyone has an equal opportunity to respond, whereas non-probability refers to the idea that equal chance is not given (Bryman & Bell, 2009). In this study, Non-probability sampling has been chosen for data collection. The departments from which the employees are taken include human resource, research and development (R&D), training department and finance department. A total of 25 participants were chosen for the study. This is an accurate sample size as defined by Saunders et al (2012). 15 participants (mostly employees) were asked to fill the questionnaire and 10 participants (mostly senior managers) took part in the face to face interviews. For the interview questions, the participants were chosen from the employees at the top level management in order to know both the sides of study (management’s view and employees’ view). The ten participants taken for the face to face interviews are R&D Manager, HR Manager, Training Manager, Production Manager and Finance Manager.
3.2.8 Data Analysis and Presentation
In order to do the data analysis, the data gathered was first evaluated for comprehensibility. For the interviews, the data gathered was recorded and then transcribed later. Notes were also taken whilst the conductions and whilst the observation of respondents‟ behavioral responses. The data gathered was analyzed by using the coding method. The data was categorized by classifying the codes and labeling them. Coding technique is defined as a word or short phrase that symbolizes the essence and attribute of the response in a visual form (Saldana, 2009). Taking it in a simpler form, a code represents a summarized form of data by eliminating the meaning of data. Later. After coding of qualitative data, thematic analysis was done to identify the common themes out of the codes and ensuing interrelations of these themes had been derived from the literature review.
3.2.9 Limitations
Despite fulfilling the aim of the study, the researchers were bound to have some limitations. The first limitation was the time constraint. As the research had minimal time, it
