Impact of Effective Succession Planning Practices on Employee Retention: Exploring the Mediating Roles

SYED NAJAM UL HASSAN, DANISH AHMED SIDDIQUI

Abstract


Succession planning (SP) and employee retention (ER) are mutually reinforcing. Meaning ineffective succession planning leads to turnover, and that would, in turn, make the succession plan ineffective. Hence the big challenge is to find how SP affects ER. For this, we proposed a model explaining the mediation effect of various factors on SP-ER nexus. We hypothesize that proper Succession planning produces a positive effect on Performance Goal Orientation, Supervisor Support, Working Environment, Rewards, Work-life Policies, Career Development, and Job Security. And these factors, in turn, lead to employee retention. We further assumed that the ER would lead to Organizational Effectiveness. To establish its empirical validity, we conducted a survey using a close-ended questionnaire. Data was gathered from 300 respondents who are serving in the middle and lower level of management in the private organizations in Pakistan. Data analysis was done through the descriptive statistics, partial least square (PLS), and Structural Equation Modeling (SEM) with the help of SmartPLS3. The findings indicated that effective succession planning practices had a meaningful, favorable connection with employee retention and out of seven mediators, only three mediators i.e. job security, rewards, and supervisor support significantly mediated the association between effective succession planning practices and employee retention. Succession planning also seems to significantly affect the working environment, work-life policies, and career development. Results also exhibited that there’s an insignificant link between effective succession planning practices and organizational effectiveness and also there is no positive relationship between employee retention and organizational effectiveness.


Full Text:

PDF

References


Abbasi, S. M., & Hollman, K. W. (2000). Turnover: The real bottom line. Public personnel management, 29(3), 333-342. https://doi.org/10.1177/009102600002900303

Adebola, S. (2019). Why do organisations run talent programmes? Insights from UK organisations. In Managing Talent (pp. 187-213). Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-95201-7_9

Agarwal, N. C. (1998). Reward systems: Emerging trends and issues. Canadian Psychology/Psychologie canadienne, 39(1-2), 60. https://doi.org/10.1037/h0086795

Ahmad, R. B., Mohamed, A. M. B., & Manaf, H. B. A. (2017). The relationship between transformational leadership characteristic and succession planning program in the Malaysian public sector. International Journal of Asian Social Science, 7(1), 19-30. https://doi.org/10.18488/journal.1/2017.7.1/1.1.19.30

Ali, Z., & Mehreen, A. (2019). Understanding succession planning as a combating strategy for turnover intentions. Journal of Advances in Management Research. https://doi.org/10.1108/JAMR-09-2018-0076

Ali, Z., & Mehreen, A. (2019). Understanding succession planning as a combating strategy for turnover intentions. Journal of Advances in Management Research. https://doi.org/10.1108/JAMR-09-2018-0076

Ali, Z., Mahmood, B., & Mehreen, A. (2019). Linking succession planning to employee performance: The mediating roles of career development and performance appraisal. Australian Journal of Career Development, 28(2), 112-121. https://doi.org/10.1177/1038416219830419

Ali, Z., Mehmood, B., Ejaz, S., & Ashraf, S. F. (2014). Impact of succession planning on employees performance: evidence from commercial banks of Pakistan. European Journal of Social Sciences, 44(2), 213-220.

Armstrong, M. (2012). A Handbook of Human Resource Management Practice: (12th Edition), Ashford for Colour Press, UK.

Bamberger, P., & Meshoulam, I. (2000). Human resource strategy: Formulation, implementation, and impact. Thousand Oaks, CA: Sage.

Bolander, P., Werr, A., & Asplund, K. (2017). The practice of talent management: a framework and typology. Personnel Review. https://doi.org/10.1108/PR-02-2016-0037

Borland, J. (1992). Job security in Australia. Journal of Economic Perspectives, 22(1), 115-136.

Brooks, V., & Henderson, T. (2005). Georgia’s flexible succession planning model: growing tomorrow’s leaders today. Georgia merit system, 17.

Carmines, E. G., & Zeller, R. A. (1979). Reliability and validity assessment (Vol. 17). Sage publications. https://doi.org/10.4135/9781412985642

Cheng, G. H. L., & Chan, D. K. S. (2008). Who suffers more from job insecurity? A meta‐analytic review. Applied Psychology, 57(2), 272-303. https://doi.org/10.1111/j.1464-0597.2007.00312.x

Chepkwony, N. K. (2012). The Link between Talent Management Practices, Succession Planning and Corporate Strategy among Commercial Banks in Kenya.

Chew, J. C. L. (2004). The influence of human resource management practices on the retention of core employees of Australian organisations: An empirical study (Doctoral dissertation, Murdoch University).

Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Modern methods for business research, 295(2), 295-336.

Chitsaz-Isfahani, A., & Boustani, H. R. (2014). Effects of talent management on employees retention: The mediate effect of organizational trust. International Journal of Academic Research in Economics and Management Sciences, 3(5), 114. https://doi.org/10.6007/IJAREMS/v3-i5/1196

Colquitt, J. A., & Simmering, M. J. (1998). Conscientiousness, goal orientation, and motivation to learn during the learning process: A longitudinal study. Journal of applied psychology, 83(4), 654. https://doi.org/10.1037/0021-9010.83.4.654

Cumming, D., Siegel, D. S., & Wright, M. (2007). Private equity, leveraged buyouts and governance. Journal of Corporate Finance, 13(4), 439-460. https://doi.org/10.1016/j.jcorpfin.2007.04.008

Eisenberger, R., Fasolo, P., & Davis-LaMastro, V. (1990). Perceived organizational support and employee diligence, commitment, and innovation. Journal of applied psychology, 75(1), 51. https://doi.org/10.1037/0021-9010.75.1.51

Eisenberger, R., Stinglhamber, F., Vandenberghe, C., Sucharski, I. L., & Rhoades, L. (2002). Perceived supervisor support: contributions to perceived organizational support and employee retention. Journal of applied psychology, 87(3), 565. https://doi.org/10.1037/0021-9010.87.3.565

Eshiteti, S. N., Okaka, O., Maragia, S. N., Odera, O., & Akerele, E. K. (2013). Effects of succession planning programs on staff retention. Mediterranean Journal of Social Sciences, 4(6), 157. https://doi.org/10.5901/mjss.2013.v4n6p157

Farashah, A. D., Nasehifar, V., & Karahrudi, A. S. (2011). Succession planning and its effects on employee career attitudes: Study of Iranian governmental organizations. African journal of business management, 5(9), 3605-3613. https://doi.org/10.2753/IMO0020-8825400101

Forza, C. (2002). Survey research in operations management: a process‐based perspective. International journal of operations & production management. https://doi.org/10.1108/01443570210414310

Garg, A., & Weele, E. (2012). Succession Planning and Its Impact on the Performance of Small Micro Medium Enterprises within the Manufacturing Sector in Johannesburg. International Journal of Business and Management. https://doi.org/10.5539/ijbm.v7n9p96

Ghayyur, M., & Jamal, W. (2012). Work-family conflicts: A case of employees' turnover intention. International Journal of Social Science and Humanity, 2(3), 168. https://doi.org/10.7763/IJSSH.2012.V2.90

Greenhalgh, L., & Rosenblatt, Z. (1984). Job insecurity: Toward conceptual clarity. Academy of Management review, 9(3), 438-448. https://doi.org/10.5465/amr.1984.4279673

Greenhalgh, L., & Rosenblatt, Z. (2010). Evolution of research on job insecurity. International Studies of Management & Organization, 40(1), 6-19. https://doi.org/10.2753/IMO0020-8825400101

Greenhaus, J. H. (1999). The role of goal setting in career management. Management Development Review, 10(4/5), 168-170. https://doi.org/10.1108/EUM0000000004392

Groves, K. S. (2007). Integrating leadership development and succession planning best practices. Journal of management development. https://doi.org/10.1108/02621710710732146

Gulzar, S., & Durrani, A. (2014). Impact of succession planning on employee engagement in telecommunication sector in Rawalpindi, Pakistan. European Journal of Business and Management, 6(37), 274-281.

Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (1998). Multivariate data analysis (Vol. 5, No. 3, pp. 207-219). Upper Saddle River, NJ: Prentice hall.

Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long range planning, 46(1-2), 1-12. https://doi.org/10.1016/j.lrp.2013.01.001

Hall-Ellis, S. D. (2015). Succession planning and staff development—A winning combination. The Bottom Line, 28(3), 95-98. https://doi.org/10.1108/BL-05-2015-0007

Hayes, A. F., & Preacher, K. J. (2010). Quantifying and testing indirect effects in simple mediation models when the constituent paths are nonlinear. Multivariate Behavioral Research, 45(4), 627–660. https://doi.org/10.1080/00273171.2010.498290

Hee, O. C., Ying, Y. H., Kowang, T. O., Rizal, A. M., & Ping, L. L. Succession Management Practices And Employee Retention In The Property Industry: Evidence From Malaysia.

Hiltrop, J. M. (1999). The quest for the best: human resource practices to attract and retain talent. European Management Journal, 17(4), 422-430. https://doi.org/10.1016/S0263-2373(99)00022-5

Human Capital Index Report (2005).

Human Resource Development Council, HRDC. (2012).

Hytter, A. (2008). Dark Side Leaders, Work Environment and Employee Health. Retrieved from Växjö University. Studies in Leadership, Entrepreneurship, and Organization Website: hvxu. se/ehv/forskning/hofreseminarier/2008/080514% 20DarkSide% 20Final% 20version. pdf.

Johnson, R. D., Pepper, D., Adkins, J., & Emejom, A. A. (2018). Succession planning for large and small organizations: A practical review of professional business corporations. In Succession planning (pp. 23-40). Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-72532-1_3

Joseph Jr, F. (2010). Hair Jr, William C. Black, Barry J. Babin, and Rolph E. Anderson, Multivariate data analysis.

Khumalo, F., & Harris, M. (2008). TOP LEVEL MANAGEMENT SUCCESSION PLAN STRATEGIES. Journal of International Business Strategy, 8(3).

Kraimer, M. L., Seibert, S. E., Wayne, S. J., Liden, R. C., & Bravo, J. (2011). Antecedents and outcomes of organizational support for development: The critical role of career opportunities. Journal of Applied Psychology, 96(3), 485. https://doi.org/10.1037/a0021452

Locke, E. A., & Latham, G. P. (1990). A theory of goal setting & task performance. Prentice-Hall, Inc.

Lucky, E. O. L., Minai, M. S., & Rahman, H. A. (2013). Impact of job security on the organizational performance in a multiethnic environment. Research journal of business management, 7(1), 64-70. https://doi.org/10.3923/rjbm.2013.64.70

Luna, G. (2012). Planning for an American higher education leadership crisis: The succession issue for administrators. International Leadership Journal.

Maragia, S. (2013). Effects of Succession Planning Programs on Staff Retention. Mediterranean Journal of Social Sciences.

Mehrabani, S. E., & Mohamad, N. A. (2011). Identifying the important factors influencing the implementation of succession planning. International Conference on Information and Finance, 21, 37-41.

Mhlongo, S. B., & Harunavamwe, M. (2017). Exploring management’s perceptions of succession planning and its impact on staff retention at an agricultural company. International Journal of Research, 7.

Nasir, S. Z., & Mahmood, N. (2016). Determinants of employee retention: An evidence from Pakistan. International Journal of Academic Research in Business and Social Sciences, 6(9), 182-194. https://doi.org/10.6007/IJARBSS/v6-i9/2304

Nyamekye, F. (2012). Impact of motivation on employee retention: a case study of Standard Chartered Bank Ghana Limited (Doctoral dissertation).

Nyanjom, C. R. (2013). Factors influencing employee retention in the state corporations in Kenya. Unpublished thesis Nairobi: University of Nairobi.

Nzuve, S. N. M. (2010). Management of Human Resources-A Kenya Perspective:(2nd and 4th ed.). Kenya: Basic Management Consultants, Nairobi-Kenya.

Odengo, R. A., & Bett, S. (2016). Influence of Succession Planning Practices on Performance of Kenya Power Limited Company.

Okwakpam, J. A. (2019). EFFECTIVE SUCCESSION PLANNING: A ROADMAP TO EMPLOYEE RETENTION. Kuwait Chapter of the Arabian Journal of Business and Management Review, 8(2), 1-10.

Ontario, (2004). Ministry of Health and Long-Term Care (Report No. Learning series; booklet 4). Long-term care facility worker retention. Ministry of Health and Long-Term Care, recruitment & retention tactics for the long-term care facility sector, Recruitment & retention tactics for the long-term care (127.3K).

Pennell, K. (2010). The role of flexible job descriptions in succession management. Library management. https://doi.org/10.1108/01435121011046344

Pillay, R. (2009). Work satisfaction of professional nurses in South Africa: a comparative analysis of the public and private sectors. Human resources for Health, 7(1), 15. https://doi.org/10.1186/1478-4491-7-15

Poornima, W. A. D. N., Sutha, J., & Perera, K. T. (2018). A Study on the Impact of Effective Succession Planning Practices on Employee Retention of Private Business Organizations in Sri Lanka.

Prabhakar, N. P., & Gowthami, C. (2013). Succession planning-ready, willing but not able: A global perspective.

Prince, B.J. (2005). Career-focused employee transfer processes. Career Development International, 10(4), 293-309. https://doi.org/10.1108/13620430510609136

Qaisar Danish, R., Shahid, F., Bano, S., Fawad Ali, H., & Afzal Humayon, A. (2019). Supervision Support and Turnover Intension: Impact of Employee’s Training in Banking Sector of Pakistan. European Online Journal of Natural and Social Sciences: Proceedings, 8(1 (s)), pp-121.

Rothwell, W. J. (2001). Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within (2nd ed.). AMACOM, New York, NY.

Rothwell, W. J. (2010). Effective succession planning: Ensuring leadership continuity and building talent from within (4th Ed.). New York, NY: AMACON.

Salaman, G. (2014). Relationship between succession planning practices and employee retention in large media houses in Kenya. Unpublished Dissertation. University Of Nairobi: Kenya.

Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations Management in the Supply Chain: Decision and Cases. Sixth Edition. United States of America: McGraw-Hill.

Shoaib, M., Noor, A., Tirmizi, S. R., & Bashir, S. (2009). Determinants of employee retention in telecom sector of Pakistan. Proceedings of the 2nd CBRC, Lahore, Pakistan, 14, 1-18.

Shrout, P. E., & Bolger, N. (2002). Mediation in experimental and nonexperimental studies: new procedures and recommendations. Psychological methods, 7(4), 422. https://doi.org/10.1037/1082-989X.7.4.422

SIA. (2018). "Employee Retention Remains Top Workforce Challenge, SHRM Survey Finds". Www2.Staffingindustry.Com.

Silbert, L. (2005). The effect of tangible rewards on perceived organizational support (Master's thesis, University of Waterloo).

Stadler, K. (2011). Talent reviews: the key to effective succession management. Business Strategy Series. https://doi.org/10.1108/17515631111166906

Staufenbiel, T., & König, C. J. (2010). A model for the effects of job insecurity on performance, turnover intention, and absenteeism. Journal of Occupational and Organizational Psychology, 83(1), 101-117. https://doi.org/10.1348/096317908X401912

Tetteh, J. O. N. A. T. H. A. N. (2015). Succession Planning, Employee Retention and Organisational Effectiveness among Some Selected Organisations in Ghana (Doctoral dissertation, University of Ghana).

van der Hejden, S. (86). R. & van Veldhoven, JPM (2008). Ageing and careers: European research on long-tem career development and early retirement. Career Development International, 13(2), 85-94. https://doi.org/10.1108/13620430810860512

Van der Sluis, L. E., & Poell, R. F. (2003). The impact on career development of learning opportunities and learning behavior at work. Human Resource Development Quarterly, 14(2), 159-179. https://doi.org/10.1002/hrdq.1058

VandeWalle, D., Brown, S. P., Cron, W. L., & Slocum Jr, J. W. (1999). The influence of goal orientation and self-regulation tactics on sales performance: A longitudinal field test. Journal of Applied Psychology, 84(2), 249. https://doi.org/10.1037/0021-9010.84.2.249




DOI: https://doi.org/10.5296/ijhrs.v10i2.16339

To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.

Copyright © Macrothink Institute   ISSN 2162-3058

'Macrothink Institute' is a trademark of Macrothink Institute, Inc.