5 Module Succession Planning_cphcm_yogya

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Succession Planning Based on Talent Management ; Performance Management System & Competency Based HR Management

By Pungki

Purnadi

www.pungkipurnadi.com or www.pungkipurnadiassociates.com

Yogyakarta, 23rd July 2016 & 12th May 2018 Duta Wacana Christian University (UKDW) Yogyakarta as part of Certified Talent Management (CTM) Program Certified Professional Human Capital Management (CPHCM) - Indonesia

2

Personnel Mgt

HRM

HCM

Unclear Succession Plan

Succession Plan based on Top management view with HR as administrator

Succession Plan is everybody business, open, transparent with committee system

Boomers

Gen X

Gen Y

Certified Professional Human Capital Management (CPHCM) - Indonesia

Module Objectives To provide an in-depth understanding and application on how to design & implement succession planning program using talent management system as in line with company vision mission values & target business objectives. Certified Professional Human Capital Management (CPHCM) - Indonesia

JMU R2-16/3/05

OUTLINE • Objectives of Succession Planning • People & Talent Development Committee • Bench Strength • Candidate Pools Certified Professional Human Capital Management (CPHCM) - Indonesia

OBJECTIVES of SUCCESSION PLANNING • To ensure that proper candidates are available when critical positions become open due to transfer, promotion or departure. • To maintain the talent pool or high potential employees. • To have structured development plan. • To establish Learning Organization and Mentoring culture. Certified Professional Human Capital Management (CPHCM) - Indonesia

Succession Plan vs Replacement Plan • Succession Plan is based on the Key Position within the organization • Succession Plan is based on talent pool population in the 1-3 boxes of 9 box matrix. • Succession Plan is based on Integrated Talent Management System • Every Key Position should have the position competencies profile • Profile match-up process can be set-up based on the percentage matching of key position competencies profile with individual talent competencies profile.

Certified Professional Human Capital Management (CPHCM) - Indonesia

What is the difference with Replacement Plan • Replacement Plan is apply for all staff employees and all positions within the organization • Replacement plan is based on employee competencies profile • Replacement Plan, can be immediate and any time as per organization needs • Replacement Plan is based on talent pool population in the 4-6 boxes of 9-box matrix. • Profile match-up process can be set-up based on the percentage matching of employee competencies profile with selected position competencies profile

Certified Professional Human Capital Management (CPHCM) - Indonesia

Replacement Planning vs Succession Planning Replacement Planning is used to find a position within the organization that is suitable for a specific employee.

Succession Planning is used to find a suitable successor (talent) for a key position within the organization. Certified Professional Human Capital Management (CPHCM) - Indonesia

Talent & Career Strategy Matrix Low Performance

5.

High Potential

Average Performance High Potential

2.

High Performance High Potential

1.

Misfits – attitudinal or job fit issues

Prince-in-waiting – more time needed

Stars – ready to fly

▪ Close monitoring and regular counseling

▪ Stress-test with more challenging assignments

▪ Promote

▪ Urgently reassign or redesign job scope

▪ Increase scope of experience

▪ Constantly expand job scope & provide greater challenge

▪ Manage expectations

▪ Specialized training for gaps in job skills

Low Performance

7.

Average Potential

Average Performance Average Potential

4.

High Performance Average Potential

Critical List – Needs salvaging

Cadre – the typical employee

Eagles – delivers consistently

▪ Close monitoring and regular counseling

▪ Set challenges to sieve out this group

▪ Manage expectations

▪ Re-look at skills and job scope

▪ Mentor and train

▪ Consider for promotion for related areas

3.

▪ Test for capability outside core competence

Low Performance

Average Performance

9.

Low Potential

Low Potential

High Performance

8.

Low Potential

No hopers – pull in the plug

Foot Soldiers – monitoring needed

Workhorses – keeps the show going

▪ Why are they still in the organization?

▪ Set clear performance targets

▪ Recognize achievements and motivate

▪ Plan exit

▪ Monitor performance closely

▪ Train to update skills

Certified Professional Human Capital Management (CPHCM) - Indonesia

6.

Develop and Manage Talent Talent Needs and Gaps Analysis

Talent Assessment

 Strategic Staffing  Succession Planning for Critical Functions – Jobs - Positions  Retention Strategies for Key Talent

 Performance Management Process  Hi-Potential Talent Assessment

Having the right people, with the right capabilities, at the right time

Talent Sourcing/Selection

Talent Development

 Global Recruiting  Selective Experienced Hiring  Diversity

 Job Assignments  Multi-Source Feedback and mentoring  Programs for New Employees, Leaders, and Competency Gaps

Certified Professional Human Capital Management (CPHCM) - Indonesia

People & Talent DEVELOPMENT TEAM or COMMITTEE

Central or Cross P&T Dev Committee Functional P&T Dev Committee Certified Professional Human Capital Management (CPHCM) - Indonesia

People & Talent Development Committee Charter, Guidelines & Process • Charter to link objectives to vision and strategy • Policy, Guidelines and System to ensure consistency • Calendar and planning Schedules • Mechanism and processes • Roles of HC/HR & Line Mgt

Certified Professional Human Capital Management (CPHCM) - Indonesia

People & Talent Development Committee (sample) • C-PTDC: ▫ Members: all direct reports of the President. ▫ Chairman: Director E&P; Secretary: Director HR ▫ Meet every second Wednesday of the month. ▫ Discuss Succession Planning in Feb, May, Aug, Oct. • F-PTDC: ▫ Members are all managers of related functions ▫ Chairman and Secretary are appointed as appropriate ▫ Each member of the C-PTDC will be the advisor of each F-PTDC ▫ Meet every first Wednesday of the month. ▫ Discuss Succession Planning in Jan, Apr, Jul, Sep Certified Professional Human Capital Management (CPHCM) - Indonesia

Succession Planning Process • Bench Strength Analysis ▫ (1 key position with at least 3 bench strength)

• Position Competencies Profile of the targeted key position • Employee Competencies Profile which explain in detail historical information about the employee prior to and during employment with the Company. ▫ Including “employee potential level”, “employee performance history” and “Employee Risk Category”

Certified Professional Human Capital Management (CPHCM) - Indonesia

BENCH STRENGTH (sample) Position & Incumbent

Ready Now

Ready In 1 – 3 Yrs

Ali Mgr Prod

Edi, Supt Maint Diah, Supt Proc

Hari, Supv Prod Joni, Supv Engr

Mulyono, Sr Engr Dakso, Supv Maint

Harto, Sr Sup Tax Sati, Head of Plg

Ari, Supv A/P Iwo, Supv Payroll

Doddy, Supv A/R Yono, Supv Bdgt

Hadi, Sr Supv RD Joko, Head of Rev

Rita, Sr Supv Mrkt Dono, Hd of A/P

Wida, Supv Prod Didi, Supv Engr

Bidin Mgr Finance Cecilia Mgr Sales

Ready In 4 Yrs & up

Certified Professional Human Capital Management (CPHCM) - Indonesia

HIGH POTENTIAL 2

1

•High Potential but performance needs to be improved

•High performance and high potential •Ready to be promoted to times in 3 years

•Well placed in the position

•High performance •Have reached the optimum of his potential

POTENTIAL

A

B

PERFORMANCE Certified Professional Human Capital Management (CPHCM) - Indonesia

TECHNICAL CAREER PATH 6. Principal

5. Consultant

* *

4. Advisor

*

3. Senior

2. Advanced 1. Discipline Certified Professional Human Capital Management (CPHCM) - Indonesia

TCP measures progress & sets expectations for performance at each level Principal Consultant Advisor

Senior

VALUE

Advanced Discipline

Results Scope & Impact

Behaviors

Knowledge

Knowledge Sharing & Interaction with others

Technical & Business

Career/Development planning is critical for professional growth.

Certified Professional Human Capital Management (CPHCM) - Indonesia

In addressing the capability gaps of the Technical Executives, there is a need to accentuate and refocus the existing framework to develop their cross functional capabilities Managerial Path

Technical Path

SALARY BAND MD/CEO

E7

ROLE LEVEL

Senior GM

E6

Custodian

L6

Principal

L5

E3

Manager

Staff

L4

E2

People Skills Business Skills

Senior Manager

IT

E4

QS

GM

HSE

E5

Senior Engineers A3

B3

C3

D3

E3

F3

L3

Engineers A2

F2 L2 Junior Engineers

E1

A1

F1

L1 Common Core Skills

Orientation Programme

Technical Induction

SGDP L1 Programme

ENTRY LEVEL PROGRAMMES

OPU Specific Orientation Programme

Cross-functional rotation within the same business Cross attachment to other businesses is not encouraged

Cross-functional rotation Minimum of 2 positions in E1 Maximum of 3 years per position Cross attachments to other businesses are allowed. Approximately 12 to 18 months

Certified Professional Human Capital Management (CPHCM) - Indonesia

HC/HR’s Role in Succession Planning Identifying development needs of the workforce

Assisting in identifying needed future job skills

Noting employees who might fill future positions

Succession Planning

Communicating the succession planning process to employees

Tracing and regularly updating succession plan efforts

Certified Professional Human Capital Management (CPHCM) - Indonesia

Succession Planning (cont’d) Succession Planning Considerations

“Make or Buy” Talent

Succession Planning Skill Areas

Electronic/WebBased Succession Planning

Certified Professional Human Capital Management (CPHCM) - Indonesia

Summary step by step 1. 2.

3. 4. 5. 6.

Identify Key / Critical position in the organization in term of number and its minimum requirement. Establish Succession and Talent Criteria with its guidelines and procedures Establish Committee (Talent Committee) Identify the talent with appropriate tools (performance, potential, etc.) Apply the Human Asset Value (HAV) Matrix Select the best from the best talent to fulfill the succession plan Certified Professional Human Capital Management (CPHCM) - Indonesia

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Step by step Succession • Establish the Talent Committee • Identify Competencies requirement for key position • Assess Competencies of Talent who might fill up the key position • Get the competencies gap • Prepare the Talent Development program Certified Professional Human Capital Management (CPHCM) - Indonesia

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Case Study Of PetroChemical Company Designing Succesion Planning Advanced Chemical India Corporation (ACI) Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study Introduction 1

• Advanced Chemical India Corporation (ACI) is founded in 1982 by current owner & president, Mr.Gupta. • Company Vision : “to become a leading global petrochemical company”. • Company Mission : “to serve all client needs with the best product, best people, best service with latest technology with the maximum gain to the shareholders and stakeholders”. • Average employee’s age is 45 years old with average service per employee is 15 years with the company ACI. • Employee movement internal company little bit difficult. • Last three years recruits youngsters with significant numbers. • ACI’s corporate philosophy is Keep High Quality in products. The culture of ACI is basically conservative. • ACI’s overall sales turnover in 2016 hit US$800 million and profit is US$30 million before tax. 60% of ACI’s are sold in domestic market although overseas sales have been growing steadily.

Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study Introduction 2

• ACI originally started producing basic chemical products that are used in clothes. Gradually other applications are developed such as for automobile, home appliances. Some products for homes are sold directly from supermarkets in India with ACI brand. • They have three plants in India and sales offices in US, UK, Hong Kong. Thailand and Malaysia. All plants produce basic chemicals and modified (specialty) products based on needs of clients. • About 2160 employees are hired. Their organization organized by functions. There are 160 employees in HQ, 1500 in production with production engineering, 400 in sales in various branches, and 100 in R&D. HQ covers marketing and corporate functions as Finance, IT, Legal, Purchasing, HR etc.. • ACI uses patents licensed by UK chemical companies. But by developing own products for specific clients, some new patents are developed by ACI and registered. • They also updated the production technology from time to time with significant number of investment. Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study Business Issues • • •

•

• •

Global competition around ACI is getting severer. Now for low cost (basic) product, ACI is competing with Chinese companies and for high end (modified/specialty) products competitors are US/European/Japanese chemical companies. As a result of severe competition, though the sales has increased by 5%, the profit has decreased by 20% last year. Both commodity and specialty (high end) chemicals divisions are reducing profits. Mr. Gupta wants to transform ACI, review its business model and lift ACI into the next era of growth. He considered that organizational issues of ACI are followings. ▫ Since many Products introduced, profit control for each product is getting difficult. And the final responsibility of each product is not clear. ▫ Functional organization becomes barrier to develop/introduce products in speedy manner. ▫ HQ seems too big. ▫ He feels difficulty to manage everything by himself Therefore he decided to transform ACI from functional to business unit base organization ( basic chemical and specialty/modified chemical units). Also he wants to reorganize HQ and R&D to more value oriented organization Currently Job based pay and incentives with profit share (for total ACI profit) are used. Mr. Gupta also feels the necessity to change these according to the organization change Certified Professional Human Capital Management (CPHCM) - Indonesia

Business Team Organization for Chemical Company - ACI

Division

(Virtual) Companies GM Corporate Service Division

Board of Directors (incl Gupta)

Manager R&D

100

50

Manager Corporate Planning

50

Manager Finance & Accounting

Research

20

Manager Purchasing & Logistic

Development

20

Manager IT

Process Engineering

15

Manager HR & Labor Relations

Manager Planning GM Basic Chemical Application

1000

Manager X Plant Manager Y Plant

Control Production

Manager Branches 300 USA - UK

GM Specialty Manager Planning Chemical Manager Z Plant Application

500

5 Manager Legal &Intellectual Property

Control Production

Manager Branches Application THA - MAL -HKG 100 Engineering

New Management *Divisions have teams of 3 management layers. *Each biz unit / team has own P/L *Corporate service cost is charged by number of people by team. *Professional staff of Corporate & R&D uses time charge system *Corporate staff shifted to company

Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study (Designing Succession Planning ) People Issues • After Re-organization, Mr Gupta is having difficulty to find the good candidates to fill up the GM Position of his two business units. • He has Mr. Subramaniam which is now as Plant Manager X. Mr. Subramaniam is a tempered person but a perfectionist guy in job. He has been respected by his subordinates due to the result of the production which always meet the target. Mr. Subramaniam is a career person, since he started his career since the beginning of ACI and develop the production technology very well. Until now he is still a single man at the mature age. • He has Mr. Kumar which is now as Plant Manager Y. Mr. Kumar is an easy going person and having a good leadership style in managing his plant. Everybody in Plant Y loves him very much. In term of competencies he has the one who always being sent for Leadership training. Mr. Kumar is just married person and still his first baby born. Kumar also quite mature on his age. • He has Mr. Sanjeev who are now as R&D Manager. Mr. Sanjeev is a keen person, patient and persistence. Not many innovative product is produced during his leadership. However his accurate calculation and good judgment on the financial (cost of product) makes him good in the eye of Mr. Gupta. Sanjeev is a family person, sometime he brings his grown children at the office while waiting his end of the working day. Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study (Designing Succession Planning ) People Issues

• He has Mr. Venkat who are now hold Planning Manager position under Specialty Chemical Product Division. He work side by side with Mr. Rajiv who are the Plant Manager Z. Venkat is a senior and mature person who has career from bottom as operator and getting higher education with scholarship from England. Before holding Planning Manager, he was the second person in charge in R&D Division. He always do some risk analysis during his career which put him good in front of Mr. Gupta. He is also family man with good children education perspective. • He has Mr. Rajiv who are now as Plant Manager Z. Mr. Rajiv is a thinker style person but having a good communication skills. It is proven that he has so many client relationship and can maintain his product sales to the big customers and industries. Rajiv is the bright young person who are having a great career jump from fresh graduate to become a capable engineer and promoted to become Plant Manager. He is in close relationship with another young bright lady engineer at the R&D department. They may be in wedding ceremony next year. • Mr. Gupta still has a strong lady of Ms. Bhindi who are now just handle head of corporate planning. Ms. Bhindi is MBA graduated from Harvard Business School. She just joint ACI 4 years ago and her last three years performance are outstanding and most of the managers agreed that she is the star lady of the company. Before handle Head of Corporate Planning, she was the brightest financial planner in the Finance & Accounting Department. Now she is learning by doing on the production operation by having good relationship with most of all engineers in those three plants. Until today she is still single and no clue that she has special relationship with somebody. Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study (Job Purpose) Job Purpose • GM Basic Chemical Business Unit is having main accountability to manage two production plants with number employees around 1000 people consisting of Production department, QA/QC, maintenance and Sales at their spreading offices. This position has an authority to set production planning, control the quality and set price on the marketing and sales up to their overseas offices. Dimension of sales target is around US$300M per year. • GM Advance or Modified Chemical Business Unit is having main accountability to manage one production plant with number employees around 500 people consisting of Production department, R&D, maintenance and Sales at their spreading offices. This position has an authority also to set production planning, produce specific product as per customer needs, control the quality and set price on the marketing and sales up to their overseas offices. Dimension of sales target is around US$ 200M per year. Certified Professional Human Capital Management (CPHCM) - Indonesia

Case Study – PetroChemical Company • Based on the above people situation, please recommend the succession planning process and scheme ▫ Establish the Talent Criteria to fill up the GM business unit position ▫ People Development Program for each person ▫ Who are the best candidate to fill up the GM Position

• Leadership Development recommended? Certified Professional Human Capital Management (CPHCM) - Indonesia

good luck & success! If you need further assistance, please contact me at 08121055000 Or visit www.pungkipurnadi.com www.pungkipurnadiassociates.com Or sending e-mail to : [email protected] [email protected]

Certified Professional Human Capital Management (CPHCM) - Indonesia

Pungki Purnadi, ST.MM.MHRM. Pungki Purnadi is certified HR practitioner, having more than 26 years experience in handling HR matter. His engineering background education and master human resources management support him to become the innovative HR Practitioner. He had various working experiences regionally and internationally such as with TOTAL Indonesie, MedcoEnergi, Petronas Carigali, WorleyParsons, Petrosea and some years with international management consultant, handling some HR matters in various industries. During his working experiences, he had been assigned to various key HR position domestically & internationally (in France, England, Scotland, Norway, Arab Emirates, Iran, Turkey, Libya, Nigeria, Sudan, Argentine, Australia, Myanmar, Thailand and Malaysia) such as Training & Development Manager, HRD Manager, Country HR Manager, South East Asia Regional HR Manager and Human Capital Director. He is also one of the founders who have an initiative to conduct HR certification in Indonesia such as Certified Human Resources Professional (CHRP); Certified Human Resource Management (CHRM) and Certified Professional Human Capital Management (CPHCM). As HR practitioners, he is very active to run and facilitating several HR program. Certified Professional Human Capital Management (CPHCM) - Indonesia