ABSTRACT
This study was undertaken to find out the Succession Planning on Organizational Performance: A Study of First Bank Nigeria Ltd, Aba, Abia State with the aim of examining the effect of succession planning (strategic working plan) on customer satisfaction in First Bank Nigeria Ltd. Aba, Abia State. The Cross-sectional survey design approach was adopted for this study. Primary and secondary data was extensively used. Primary data were generated by the use of a structured questionnaire which was administered to 153 respondents, drawn from the management staff of the selected branches of First Bank Ltd in Nigeria. The population of the study comprised of 247 management staff drawn from the First Bank branches in Aba, Abia State. The sample size was determined using the Taro Yamane formula, and the proportional allocation formula was used in the distribution of the copies of the questionnaire to the respondents. The statistical tool employed in testing the hypotheses were the Ordinary Least Square (OLS) involving the simple regression analysis using SPSS version 20. From the statistical analysis of the hypothesis, it was discovered that strategic working plan has a significant effect on customer satisfaction in First Bank Nigeria Ltd, Aba, Abia State, it was also revealed that top management support significantly effect of leadership continuity in First Bank Nigeria Ltd, Aba, Abia State. The study equally revealed that to a very large extent, employee values significantly affect talent retention in First Bank Nigeria Ltd, Aba, Abia State . The study concluded that for Nigerian banks to effectively implement good succession plan, they need to employ various methods to carryout the employees along. The study therefore recommended that managers of Nigeria banks should ensure that the various components of succession planning (strategic working plan, top management support and employee values) are carried out transparently with the involvement of the employees as it has resulted in improved performance, reduced employees turnover, improved quality service, hence customers satisfaction, leadership continuity, adequate motivation, as well as enhanced talent retention.
TABLE OF CONTENTS
Title page i
Declaration page ii
Approval/Certification iii
Dedication iv
Acknowledgments v
Table of contents vi
Abstract x
CHAPTER
1: INTRODUCTION
1.1
Background to the Study 1
1.2
Statement of the Problem 4
1.3
Aims and Objectives of the Study 5
1.4
Research Questions 6
1.5
Research Hypotheses 6
1.6.
Significance of the Study 7
1.7. Scope and
Limitation of the Study 8
1.7.1
Scope of the Study 8
1.7.2 Limitations
of the Study 9
1.8. Operational Definition of Terms 9
CHAPTER
2: REVIEW OF RELATED LITERATURE
2.1 Conceptual Review 11
2.1.1. Definition of succession planning 12
2.1.2.
Succession management 13
2.1.3
Banking industry 13
2.1.4
Bank continuity 14
2.1.5. What succession planning entails 14
2.1.6
Types of succession planning 15
2.1.7. Succession planning process 16
2.1.8 Organisational factors and succession planning 16
2.1.9. Good practice in succession planning
development 17
2.1.10. Executive transition management and
succession planning 18
2.1.11. Staff management during succession planning 19
2.1.12. Communication strategy and succession
planning 20
2.1.13. Factors influencing succession planning 20
2.1.13.1.Training 21
2.1.13.2.Management
support: 21
2.1.13.3.Clarifying
the career path 21
2.1.13.4.Positive
insights 21
2.1.13.5.Organisational
culture 21
2.1.13.6.Technological
advancement 22
2.1.13.7.Flat
structure 22
2.1.13.8.Financial
condition 22
2.1.13.9.Government
regulations 22
2.1.14. Importance of succession planning 23
2.1.15. Problems of succession planning 25
2.1.16. Obstacles to implementing a succession
plan 25
2.1.17. Role of transitioning committees on
succession planning 26
2.1.17.1. Roles of the board and executive director
in succession planning 28
2.1.17.2. Role of interim executive director in
succession planning 28
2.1.17.3. Roles performed by executive director in
organisations 28
2.1.17.4 Strategic leadership roles 29
2.1.17.5 Management roles 29
2.1.17.6 Human resource management roles 30
2.1.17.7. Financial management roles 30
2.1.18. Creating and maintaining organisational
culture roles 31
2.1.19 Board relationships roles 32
2.1.20 Symbolic and ceremonial roles 32
2.1.21 Benefits for succession planning programme in
organisation 33
2.1.21.1. Organisational benefits 34
2.1.22. Job rotation and succession planning 35
2.1.23 Replacement
planning 36
2.1.24. Talent retention in succession planning reality. A coaching and
mentoring approach 38
2.1.24.1. Recruitment 38
2.1.24.2.
Talent mapping 38
2.1.24.3. Work force planning & development 39
2.1.24.4. Performance and planning evaluation 39
2.1.24.5 Retention 39
2.1.24.6 Coaching and mentoring 39
2.1.27. Performance management 40
2.1.28. Management
succession planning and customer satisfaction 42
2.1.29. Leadership
continuity 45
2.1.29.1.
Succession planning and leadership continuity 46
2.1.30. Succession planning and organisational performance 47
2.2 Theoretical
Framework 49
2.2.1.
Leadership model succession theory 49
2.2.2. Behavioural theory 50
2.2.3.
Resource-based theory 50
2.2.4
Application of the Theory 51
2.3
Empirical Review 52
2.4 Gap in
Literature 60
2.5
Summary of Literature 60
CHAPTER 3: RESEARCH METHODOLOGY
3.1 Research
Design 62
3.2 Sources of Data 62
3.3
Population of the Study 63
3.4
Sample Size Determination 64
3.5.
Sampling Technique 66
3.6 Validity
of the Instrument 67
3.7 Reliability
of the Instrument 67
3.8 Operational
Measures of Variables 68
3.9 Method
of Data Analysis 69
3.10
Model Specification 69
3.10
Decision Rule 70
CHAPTER
4: DATA
PRESENTATION AND ANALYSIS
4.1
Data Analysis 71
4.3. Analysis
of Data 76
4.6 Discussion of Findings 81
CHAPTER
5: CONCLUSION, SUMMARY AND RECOMMENDATIONS
5.0. Summary of Findings 84
5.1. Conclusion 84
5.2.
Recommendations 85
5.3.
Suggestions
for Further Studies 85
5.4.
Contribution to Knowledge 85
REFERENCES
APPENDIX
CHAPTER
1
INTRODUCTION
1.1 BACKGROUND
TO THE STUDY
Succession planning has
become an important talent management initiative in organisations around the
world. For some organisations, succession planning is a strategic process that
minimizes leadership gaps for critical positions and provides opportunities for
top talent to develop the skills necessary for future roles with other
organisations, succession planning is a constant non academic struggle, viewed
as an administrative exercise rather than as a competitive advantage (Tierney,
2016). It is easier to ignore deficiencies in the succession planning process
but in the current economic downturn, the need to identify and develop top
talent for critical roles has never been more important. Whether restructuring,
or engaging in a merger, acquisition, divestiture or bankruptcy, organisations,
including Banks, must rethink how they structure, source, manage and develop
talents (Schein, 2019). This change in leadership (generally in the CEO
suite) has an impact on business plans and growth initiatives. Given the
high unemployment rate, hundreds of candidates may apply for a single position,
which can be costly (Huang, 2001). Thus, to avoid the expense of recruiting
external talent, organisations turn inward to fill vacancies. As such, building
bench strength has never been more important. Organisations now look at
succession planning for both professional and management roles in addition to
new ways of moving talent across their organisations, not just from bottom to
top.
The future
of management is a concern
to most people
simply because people will
not be able
to tolerate as
a country, as
a society, as
a government, the
danger that any one
of the major
organisations will decline
or collapse because
it has not
made adequate provisions for
management succession. ‘human resources are the
most important asset’
is a common
phrase in the corporate
environment. Every organisation
cherishes its employees especially its think tank. It is
generally agreed that
the biggest contributors
to organisational success
and performance are the
employees. However, organisations
don’t permanently own
employees hence they
are free to leave
at any given
time. Having a
workforce, that is human capital
alone, is not
sufficient for a firm
to earn a
competitive advantage. Rather
an organisation must utilize
the workforce as
a strategic resource to
sustain a competitive
advantage (Kutcher, Jones
and Widener, 2019).
For
succession planning to be effective, it is expected that top management
participate and support the programme. It is expected that CEOs
hold the line management accountable for developing future simultaneously model
or her to become what the organisation wants. Other ways that top management
can partake in this process is by allocating sufficient resources and
management attention to sustain the programme. Therefore to implement the
process, plans for implementation will need to be disseminated to all programme
executives within the organisation and there should be regular review to
evaluate the succession planning results.
Strategic
working plan is also an important factor to be considered for any organisation
that seeks to survive after the founders are no more. Rothwell and Poduch,
(2014) considered managerial talent
to be the
most crucial component
in her characterisation of
a firm or organisation as a
collection of resources.
Although physical resources
are important, the
services that resources will
yield depend on
the capacities of
the men using
them in satisfying their teeming customers (Dym, Egmont, and Watkins,
2011). Succession planning needs to
be focused on
senior management positions,
starting at the
top of the organisation (with
particular attention paid
to CEO and/or
managing director) and
going at least six
or seven levels
down, so as
to include middle
management positions (Bleakley,
2006). Every organisation strives to do all they can to have the
right people in
the right jobs
at the right
time (Hills, 2009). In addition,
effective succession planning enables organisations to react quickly to change
and endure difficult times. At its best, succession planning allows an
organisation to seamlessly merge its employees’ capabilities and career
aspirations with the organisation’s business strategy and talent needs.
Employee’s values and attitudes are important factors for employee’s retention
in any organisation. It believed that people serve as the most vital resource
for many organisations and the bank is no exception (Yankov and Kleiner, 2011).
Decentralisation requires the employment of trained personnel to accept
authority, it involves more financial burden and a small enterprise cannot
afford to appoint experts in various fields.
Banks
rely on individuals from the bottom up but none are more important than the
executives that establish and guide their organisations (Yankov and Kleiner,
2011). These critical individual leaders are a scarce resource in today’s
banks, including First Bank of Nigeria Ltd. However, the development of these
leadership skills requires time, planning, and preparation (Toor and Ofori,
2008). Human resources such as potential leaders are even limited more in new
generational banks in Nigeria that make up the majority of many banks
(Schrader, 2016).
Many of these banks today
have an aging generation on the brink of retirement that has various levels of
leadership responsibilities (Chavez, 2011). The succession of these leaders is
an inevitable change that will impact many banks in the near future (Miller,
2010), proper succession planning is critical for their performance and
survival. To this end therefore, the researcher seeks to investigate the effect
of succession planning on organisational performance with specific reference to
First Bank Nigeria Ltd, Aba Branch, Abia State
1.2 STATEMENT OF THE PROBLEM
Succession planning perhaps is an
activity that most
organisations would be
quick to say
is in place. Unfortunately, it
is widely known
that succession planning
efforts are all
too often underdeveloped, unevenly
executed, and sometimes
simply ignored. Though
organisations are increasingly acknowledging the critical role of succession
planning prior to exit of executives, few have plans in place to guide them
through the process and as a result decline in organisational performance. This
has often been observed during transition. Succession planning
has the potential
to be one
of the major
business issues of
the coming decades. The
demographic reality is
that organisations will
have a shrinking
pool of labour
from which to draw
on, which will
impact operations at
all levels, from
the receptionist to
the Chief Executive Officer. It is
this reality that
has pushed succession
planning - an important issue
in normal times
to the forefront (Miller, 2010).
Banking
industry is perceived to have lagged behind in institutionalizing succession
plans part of their strategies to deal with the aforementioned transition and
therefore risk losing experience, information and identity in the long
run. Although research has established
the importance of proper succession planning but banking industry continues to
operate without a formal succession plan. Despite this urgent need for
succession planning, it has not been fully embraced especially by banking
sector. One of the challenges of
succession planning is
the unwillingness of top
managers to train
the junior staff (McDonald and Hite, 2008).
This is
because; those trained
pose a threat
to the very existence of
the senior management.
Also, the general
staff must support
the efforts and
the activities of succession
planning. Staff who
are unwilling to
be trained to
take up new
and superior tasks may
jeopardize the efforts
and spirit of
succession planning in the organisation (Schein, 2009).
Some of
the other factors
that may influence
succession planning are;
Strategic working plan, top management support, Employee’s values and
attitudes, performance measurement,
determining the performance
which is needed
for the future, assessing
the potential, establishing a way to
narrow the gaps,
following up, documenting
competence, making and maintaining
rewards for developing
people, evaluating results
and leading from
the front (Wolfe, 2016).
This is a clear indication that succession plans are unavoidable as
organisations keep to struggle with creating a formal process aimed at
identifying, developing and retaining a high potential pool of workforce within
the organisation to maintain organisation performance that allow smooth
transmission of responsibilities. For organizational planning to be a success,
the resource person in question must not come from the area where we except he
must come from a neutral ground where he is fixed to do the job. Again, the person
must be choosed not selected from among the resource persons.
1.3 OBJECTIVES OF THE STUDY
The
main objective of this study is to examine the effect of succession planning on
organisational performance in First Bank Nigeria Ltd, Aba, Abia State. The specific
objectives are to:
i.
Determine the effect of mentoring on cost
saving (project) of First Bank Nigeria Ltd. Aba, Abia State.
ii.
examine the effect of management training
on the adaptation to change (effectiveness) of First Bank Ltd. Plc Aba, Abia
State.
iii.
ascertain the effect of multiple
management task on customer’s satisfaction (efficiency) of First Bank Nigeria
Ltd, Aba, Abia State.
1.4 RESEARCH QUESTIONS
To
achieve the aim of this study, the following questions were asked
i.
What is the effect of mentoring on cost
saving (project) of First Bank Nigeria Ltd. Aba, Abia State.
ii.
Does Top management support training on
the adaptation to change (effectiveness) of First Bank Ltd. Plc Aba, Abia
State.
iii.
What is the effect of multiple management
task on customer’s satisfaction (efficiency) of First Bank Nigeria Ltd, Aba,
Abia State.
1.5 RESEARCH HYPOTHESES
The
following hypotheses were formulated in line with the objectives of the study.
i.
Mentoring does not have any effect on cost
saving (project) of First Bank Nigeria Ltd. Aba, Abia State.
ii.
Top management does not support training
on the adaptation to change (effectiveness) of First Bank Ltd. Plc Aba, Abia
State.
iv.
Multiple management task does not has any
significant effect on customer’s satisfaction (efficiency) of First Bank
Nigeria Ltd, Aba, Abia State.
1.6. SIGNIFICANCE OF THE STUDY
Although
various studies have been carried out and significant development made in this
area of succession planning and organisational performance, but today‘s global
business world is not fixed. It changes rapidly and constantly: as a result of
this, businesses
require managers who are informed on succession planning, so as to be able to
compete in the global market. By addressing the above, this study will
contribute to the body of literature and providing new information regarding
succession planning and organisational performance in the banking industry in
South East Nigeria as it focuses on the different branches of the selected bank
in Aba, Abia State. The potential value of the study will be relevant to
banking business leaders, especially at this point in time when the environment
of business in Nigeria is unstable.
Empirically,
the significance of this study is embedded within the potential impact the
findings from the study may have on management researchers and practitioners of
business management. An example of potential impact on organisational
management could be the development of succession planning strategies and
increased awareness in the area of human resource planning. Consideration could
also be given to the importance of formulating and implementing sound
succession planning policies in order to enhancing the organisation’s
performance.
Customers
– A customer is a person who is coming to buy our product
Theoretically,
the study identify which dimension of succession planning has a more
significant effect on organisational performance in the banking industry in
Abia State, Nigeria. In the light of this, it is envisaged that the result of
this study will fill some gaps and at the same time, make modest contributions
to knowledge as this is a descriptive study that will define other areas of
research for further investigation.
1.7. SCOPE AND LIMITATION OF THE STUDY
1.7.1 Scope of the study
The
review of literature of this study was restricted to the literature
on succession planning and organisation performance in various areas. However,
the scope of the study covered the following areas:
i.
Geographical scope- The target is
restricted to all the ten (10) different branches of First Bank Ltd, Aba, Abia
State.
ii.
Unit scope- The unit scope of this study
was restricted to all the senior, middle and lower level management staff of the
selected bank. Information on succession planning and employee performance in
banking industry was elicited from the employees using questionnaire.
The
study was restricted from 2012 to 2018.
More
so, the reason behind the choice of the organisation is because it is a first
generational bank and must have witnessed succession in her leadership
position.
1.7.2 Limitations of the Study
This study focused on the assessment
of succession planning on organisational performance using selected first bank branches
in Aba, Abia State. In the course of carrying out the study, the following
constraints were encountered.
i)
Lack of adequate time in covering some
other banks and branches of the bank that would have made up the descriptive
data and further comparison.
ii)
Although it was explained to the
respondents that the study was merely for academic purposes, some of them were
unhelpful and secretive in responding to the questionnaire. This became the
most time consuming part of the study.
1.8. OPERATIONAL
DEFINITION OF TERMS
Human
resource planning - The ongoing process of
systematic planning to achieve optimum use of an organisation’s most valuable asset
- its human resources. It’s the process of anticipating and making provision
for the movement of people into, within and out of the organisation.
Customer
satisfaction- This refers to how happy customers are
with the bank’s products, services, and capabilities.
Leadership continuity-
This relates to the development of a leadership pipeline to allow for orderly
succession of leaders at all levels in the organisation.
Organisational
performance- The actual output or
results of an organisation as
measured against its intended outputs (or goals and objectives).
Organisational
structure- Organisational structure refers to
the way in which organisation’s activities are divided, organized, and
coordinated.
Performance
appraisal -A performance appraisal
is an evaluation and grading exercise undertaken by an organisation on all its
employees either at times or annually, on the outcomes of performances based on
the job content, job requirement, and personal behaviour in the position so as
to determine who needs what training, and who will be promoted, demoted,
retained, or fired.
Succession
planning- Succession planning is the process
of identifying the key leadership positions within each department and
developing employees within public as well as private organisations to assume
these positions. It is a comprehensive plan to address both current and future
leadership needs while maintaining the existing merit principles. The right leadership
at the right place at the right time with the right skills.
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