Tag: Succession Planning

Career Development or Career Development Planning refers to the process an individual may undergo to evolve their occupational status. It is the process of making decisions for long term learning, to align personal needs of physical or psychological fulfillment with career advancement opportunities. Career Development can also refer to the total encompassment of an individual’s work-related experiences, leading up to the occupational role they may hold within an organization. Career Development can occur on an individual basis or a corporate and organizational level.

One might engage in classroom training in-house or at universities, or opt for special job or task force assignments, or especially early in the career, job rotation. Lateral moves and promotions are more difficult to use for developmental purposes. Managers with vacancies have their own objectives to meet and may be reluctant to fill openings with candidates designated for career development, rather than with those who have the best skills to do the job.

It is essential that career development be fully integrated with internal staffing activities. Career development provides a supply of talents and abilities. Individuals must be committed to and accept responsibility for their career development.

• Growth Opportunities:

Individuals can expand their abilities by enrolling for training programmes, acquiring an additional degree, seeking new work assignments. When an opportunity arises in the organisation, employees with the required skills would be placed in that position.

• Resignations:

When an individual sees career opportunity elsewhere which are not available in the existing organisation, resignation may be the only alternative. When used sparingly, it results in promotion, salary increase and a new learning experience.

• Job Performance:

Career progression largely depends on the job performance; the better the performance, the higher the chances of going up the corporate ladder.

• Mentors:

Mentors can aid career development by sharing their knowledge and insights and wisdom to help junior managers.

Process

(1) Staffing and Orientation:

This phase is composed of providing career information to the job candidate (whether internal or external) and using selection techniques so as to match potential workers with the right job. The type of career information provided may include knowledge of jobs within the organization and possible career paths for the employee.

Selection techniques that are used to match employee and employment opportunity include assessment center exercises and job posting systems even for positions that are to be filled internally (a form of self-selection).

(2) Evaluation Phase:

This phase is characterized by two important aspects, namely performance review and succession planning. The purpose of performance review, from a career development perspective, is to provide feedback to employees on their skills and knowledge, both to increase job satisfaction and to help them prepare for their next job. Succession planning links information from and about individual employees to the human resource needs of the organization.

(3) Development Phase:

During the developing phase, more visible career development strategies are employed. Tools used during this phase include career discussions between employee and supervisor, career resource centers, self- assessment and career counseling, and career planning workshops.

Career Development Planning

On an individual basis, career planning encompasses a process in which the individual is self-aware of their personal needs and desires for fulfillment in their personal life, in conjunction with the career they hold. While every person’s experiences are unique, this contributes to the different careers that people will acquire over their lifespan.

• Long Term Careers

Careers that are long term commitments throughout an individual’s life are referred to as ‘Steady-State Careers.’ The person will work towards their retirement with specialized skillsets learned throughout their entire life. For example, somebody would be required to complete a steady process of graduating from medical school and then working in the medical profession until they have retired. Steady-state careers may also be referred to as holding the same occupational role in an organization for an extended period and becoming specialized in the area of expertise. A retail manager who has worked in the sales industry for an extended period of their life would have the knowledge, skills, and attributes regarding managing non-managerial staff and coordinating job tasks to be fulfilled by subordinates.

A career that requires new initiatives of growth and responsibility upon accepting new roles can be referred to as ‘Linear Careers,’ as every unique opportunity entails a more significant impact of responsibility and decision making power on an organizational environment. A linear career path involves a vertical movement in the hierarchy of management when one is promoted. For example, a higher-level management position in a company would entail more responsibility regarding decision-making and allocation of resources to effectively and efficiently run a company. Mid-level managers and top-level managers/CEOs would be referred to as having linear careers, as their vertical movement in the organizational hierarchy would also entail more responsibilities for planning, controlling, leading, and organizing managerial tasks.

• Short Term Careers

When individuals take on a short term or temporary work, these are ‘Transitory Careers’ and ‘Spiral Careers’. Transitory Careers occur when a person undergoes frequent job changes, in which each task is not similar to the preceding one. For example, a fast-food worker who leaves the food industry after a year to work as an entry-level bookkeeper or an administrative assistant in an office setting is a Transitory Career change. The worker’s skills and knowledge of their previous career will not be applicable to their new role.

A spiral career is any series of short term jobs that are non-identical to one another, but still contribute to skill-building of a specific attribute that individuals will accept over their lifetime. Many individuals can undergo slight career transitions or accept short-term contract work in the same work field, to build on different skill sets needed for them to succeed in an organizational environment. For example, an individual with a degree in Business hired to do ‘project management’ in one area of a department can be promoted or transferred to complete another task in the same department to work on ‘marketing’.

Career Development Cycle

• Know Yourself

Interest, Values, Skills, Assets, Resources, Personality

• Explore Possibilities

Research, try things out, Narrow choices, and explore new possibilities

• Make Choices

Set Goals, develop a plan, Remove Barrier

• Make it Happen

Convert plan into action, learn along the way, Achieve goals

Steps in Career Development cycle

• Step 1: Needs:

This step involves in the conducting a needs assessment as a training programme.

• Step 2: Vision:

The needs of the career system must be linked with the interventions. An ideal career development system known as the vision links the needs with the interventions.

• Step 3: Action Plan:

An action plan should be formulated in order to achieve the vision. The support of the top management should be obtained in this process.

• Step 4: Results:

Career development programme should be integrated with the organisation on-going employee training and management development programmes. The programme should be evaluated from time to time in order to revise the programme.

Career Life Cycle is a model that describes the stages of an individual’s career development. It is a useful tool for both individuals and organizations in understanding the different stages of a career and the corresponding developmental tasks that need to be accomplished at each stage. The career life cycle typically consists of four stages: exploration, establishment, maintenance, and decline.

• Exploration:

This stage usually occurs during the early years of a career. During this stage, individuals are exploring different career options and trying to identify their interests, skills, and values. The primary developmental task during this stage is to gain self-awareness and explore different career options to find a good fit.

• Establishment:

This stage occurs when individuals have found a career path that aligns with their interests, skills, and values. The primary developmental task during this stage is to establish oneself in a career and develop the necessary skills and competencies to succeed in that career.

• Maintenance:

This stage occurs when individuals have established themselves in their careers and are focused on maintaining their success. The primary developmental task during this stage is to continue to develop one’s skills and competencies, expand one’s network, and take on new challenges to continue to grow and advance in one’s career.

• Decline:

This stage occurs when individuals begin to transition out of their careers, either by choice or due to circumstances such as retirement. The primary developmental task during this stage is to plan for and manage the transition out of one’s career, including preparing for retirement or finding a new career path.

Succession Planning is a process for identifying and developing new leaders who can replace old leaders when they leave, retire or die. Here the planning is usually a close process, so that those who have been selected are not likely to know that they are on a succession list or chat. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Succession planning is a strategy for passing on leadership roles often the ownership of a company to an employee or group of employees.

Succession planning is a process that ensures an organization has a plan in place to identify and develop internal talent to fill key leadership roles when the current leaders leave their positions. A succession planning program is a formal program that helps organizations identify and develop their future leaders.

Also known as “replacement planning,” it ensures that businesses continue to run smoothly after a company’s most important people move on to new opportunities, retire, or pass away. Succession planning can also provide a liquidity event enabling the transfer of ownership in a going concern to rising employees. Taken narrowly, “replacement planning” for key roles is the heart of succession planning.

• In dictatorships, succession planning aims for continuity of leadership, preventing a chaotic power struggle by preventing a power vacuum.
• In monarchies, succession is usually settled by the order of succession.
• In business, succession planning entails developing internal people with the potential to fill key business leadership positions in the company.

Effective succession or talent-pool management concerns itself with building a series of feeder groups up and down the entire leadership pipeline or progression. In contrast, replacement planning is focused narrowly on identifying specific back-up candidates for given senior management positions. Thought should be given to the retention of key employees, and the consequences that the departure of key employees may have on the business.

Objectives of Succession Planning

• Ensure Continuity of Leadership

One major objective of succession planning is to ensure continuity of leadership in the organization. When key employees retire, resign, are promoted, or leave unexpectedly, suitable replacements should be available. Succession planning identifies and prepares employees for important positions in advance. This reduces disruption in organizational activities and ensures that important responsibilities continue smoothly. It also helps maintain stability during leadership transitions and allows the organization to remain focused on its goals without facing a sudden shortage of capable leaders.

• Identify High-Potential Employees

Succession planning aims to identify employees who have the potential to take higher responsibilities in the future. HRD evaluates employees based on their performance, competencies, leadership qualities, knowledge, experience, and ability to handle challenging situations. High-potential employees can then be included in development programmes and prepared for critical positions. Identifying talented employees early helps organizations build a strong internal talent pool. It also ensures that capable employees receive appropriate opportunities for professional growth and advancement within the organization.

• Develop Future Leaders

Another important objective is to develop future leaders who can effectively manage organizational responsibilities. Selected employees are provided with leadership training, coaching, mentoring, job rotation, challenging assignments, and decision-making opportunities. These development activities improve their managerial, communication, problem-solving, and strategic thinking abilities. Preparing future leaders reduces dependence on external recruitment for senior positions. It also creates employees who understand organizational values, culture, policies, and objectives, making them better prepared to handle leadership responsibilities when opportunities arise.

• Reduce Leadership Gaps

Succession planning helps organizations reduce the risk of leadership gaps. Important positions may become vacant because of retirement, resignation, promotion, transfer, illness, or unexpected circumstances. Without suitable replacements, organizational performance may suffer. Succession planning identifies potential successors and develops them before vacancies occur. This creates a ready pool of qualified employees who can assume responsibilities when required. Therefore, the organization can respond quickly to changes and maintain effective operations without experiencing prolonged shortages in important managerial and leadership positions.

• Support Employee Career Development

Succession planning provides employees with clear opportunities for career growth and advancement. Employees can understand what positions may be available in the future and what competencies are required to reach those positions. HRD can provide training, mentoring, coaching, job rotation, and developmental assignments to help employees prepare for advancement. This encourages employees to take responsibility for their professional development. When employees see a clear career path within the organization, they are more motivated to improve their performance and develop their capabilities.

• Improve Employee Retention and Motivation

An important objective of succession planning is to improve employee motivation and retention. Employees are more likely to remain with an organization when they believe that their contributions are recognized and opportunities for advancement are available. Succession planning demonstrates that the organization is interested in employees’ long-term development. Training and career opportunities increase employee satisfaction and commitment. Recognition as a potential successor can also motivate employees to perform better, acquire new skills, accept greater responsibilities, and contribute more effectively to organizational objectives.

• Preserve Organizational Knowledge

Succession planning aims to preserve important knowledge, skills, experience, and organizational information when experienced employees leave. Senior employees often possess valuable knowledge about organizational processes, customers, systems, and practices. Through mentoring, coaching, knowledge sharing, and job shadowing, this knowledge can be transferred to potential successors. Effective knowledge transfer reduces the possibility of losing critical organizational knowledge. It also helps new leaders understand their responsibilities more quickly and maintain consistency in organizational practices, decision-making, and performance.

• Achieve Long-Term Organizational Objectives

Succession planning ultimately aims to support the long-term success and effectiveness of the organization. By developing capable employees for future positions, organizations can build a stable leadership pipeline and strengthen their ability to respond to changing business conditions. It connects employee development with future organizational requirements and strategic objectives. A strong succession plan improves leadership readiness, reduces organizational risks, supports talent management, and strengthens competitiveness. Thus, succession planning ensures that the organization has the right people with the right capabilities for future responsibilities.

Types of Succession Planning

1. Emergency Succession Planning

Emergency succession planning is designed to deal with unexpected vacancies in important positions. It identifies employees who can immediately take over responsibilities when a key employee suddenly resigns, becomes unavailable, or leaves the organization. The main purpose is to maintain business continuity and avoid disruption. Organizations usually prepare backup candidates and define their responsibilities in advance. This type of planning is especially important for critical leadership positions.

Example: If a company’s finance manager suddenly resigns, an experienced assistant manager may temporarily take charge until a permanent replacement is appointed.

2. Strategic Succession Planning

Strategic succession planning is a long-term approach that connects succession decisions with the organization’s future goals and strategy. It identifies important positions and develops employees who can meet future leadership and business requirements. HRD provides training, coaching, mentoring, job rotation, and challenging assignments to prepare potential successors. This approach ensures that leadership development supports organizational growth and change.

Example: A growing technology company may identify software managers with leadership potential and prepare them for future senior management positions through leadership development programmes.

3. Short-Term Succession Planning

Short-term succession planning focuses on preparing employees to fill important positions within a relatively short period. It is useful when an organization expects a vacancy because of retirement, promotion, transfer, or resignation. HRD identifies suitable employees who already possess many of the required skills and provides focused development to make them ready. This approach reduces disruption and ensures a smooth transition.

Example: If a department head is retiring within six months, the organization may prepare the current deputy manager to take over the position.

4. Long-Term Succession Planning

Long-term succession planning focuses on developing employees for important positions several years in advance. It is particularly useful for senior management and leadership roles that require extensive experience and development. Employees with high potential are identified early and provided with continuous training, mentoring, job rotation, and leadership assignments. The objective is to build a strong leadership pipeline for future organizational needs.

Example: A company may identify a young management trainee and gradually develop them over several years to become a future business unit manager.

5. Internal Succession Planning

Internal succession planning involves selecting and developing successors from within the organization. Existing employees are assessed based on their performance, competencies, experience, and leadership potential. Suitable employees are given training, mentoring, promotions, job rotation, and challenging assignments to prepare them for higher positions. This approach motivates employees and helps retain organizational knowledge and experience.

Example: A sales executive who consistently performs well may be developed through leadership training and eventually promoted to sales manager when the position becomes vacant.

6. External Succession Planning

External succession planning involves identifying potential successors from outside the organization. It is used when suitable internal candidates are unavailable or when the organization requires new skills, experience, or perspectives. HRD and recruitment teams may maintain relationships with external talent and professional networks to identify suitable candidates. External succession can introduce new ideas and expertise into the organization.

Example: If a company lacks an experienced Chief Technology Officer internally, it may recruit an experienced technology leader from another organization to fill the position.

7. Leadership Succession Planning

Leadership succession planning focuses specifically on preparing employees for future leadership and managerial positions. It identifies employees with leadership potential and develops their decision-making, communication, strategic thinking, problem-solving, and people-management abilities. HRD may use coaching, mentoring, leadership programmes, job rotation, and special assignments to prepare future leaders. This ensures that capable employees are available to manage the organization in the future.

Example: A company may prepare selected department managers through executive development programmes for future roles as directors or senior executives.

8. Key Position Succession Planning

Key position succession planning focuses on positions that are essential for the successful functioning of an organization. These positions may involve senior managers, technical specialists, financial controllers, or employees possessing critical knowledge. The organization identifies possible successors and prepares them to assume these roles when necessary. This reduces the risk associated with losing employees in critical positions.

Example: A manufacturing company may identify its chief production engineer as a key position and train experienced engineers to take over the role if the current employee leaves.

Process of Succession Planning

 

Step 1. Identifying Key Positions

The first step in succession planning is identifying positions that are critical to the organization’s success. These may include senior management, department heads, technical specialists, or employees with specialized knowledge. HRD determines which positions would create serious difficulties if they became vacant. The organization then prioritizes these positions for succession planning. This helps management focus development resources on roles that require continuous availability of capable employees. Example: A manufacturing company may identify its Production Manager and Finance Manager as critical positions requiring succession plans.

Step 2. Defining Position Requirements

After identifying key positions, the organization determines the knowledge, skills, competencies, qualifications, experience, and personal qualities required for each position. HRD develops job descriptions and competency profiles to clearly understand the requirements of future roles. These requirements become the basis for identifying suitable successors. Clear position requirements help ensure that employees are developed according to actual organizational needs. Example: A future Sales Manager may require leadership ability, communication skills, sales knowledge, decision-making skills, and several years of sales experience.

Step 3. Identifying Potential Successors

The next step is identifying employees who have the potential to occupy key positions in the future. HRD considers performance, competencies, experience, leadership qualities, career aspirations, and future potential. Performance appraisal and potential appraisal are useful tools for this purpose. Employees may be categorized according to their readiness for higher responsibilities. Example: An organization may identify three high-performing Assistant Managers as potential successors for a Department Manager position based on their performance and leadership capabilities.

Step 4. Assessing Successor Readiness

After identifying potential successors, HRD assesses their readiness to take over future positions. Employees may be classified as immediately ready, ready within a short period, or requiring long-term development. Assessment may include performance records, competency assessments, interviews, assessment centres, and manager feedback. This process helps identify strengths and development gaps among potential successors. Example: An Assistant Manager may have strong technical skills but require leadership and decision-making development before becoming ready for a General Manager position.

Step 5. Identifying Development Needs

HRD identifies the skills and competencies that potential successors need to develop. These may include leadership, communication, strategic thinking, problem-solving, technical knowledge, decision-making, and people-management skills. Identifying development needs helps create individual development plans for employees. This ensures that development activities are targeted toward future job requirements. Example: If an employee selected for future managerial responsibility lacks presentation and leadership skills, HRD may include leadership training and communication workshops in the employee’s development plan.

Step 6. Providing Training and Development

Once development needs are identified, HRD provides appropriate training and development opportunities. These may include coaching, mentoring, job rotation, workshops, e-learning, leadership programmes, challenging assignments, and executive development. Such activities prepare employees for greater responsibilities and improve their confidence and competencies. Development should be continuous rather than limited to a single training programme. Example: A potential department head may receive leadership training, work under a senior manager, and participate in cross-functional projects to gain broader organizational experience.

Step 7. Implementing and Monitoring the Plan

HRD implements the succession plan and regularly monitors the progress of potential successors. Managers provide feedback and assess whether employees are developing the required competencies. Performance reviews, development discussions, and competency assessments help track progress. If an employee’s development needs change, the plan can be modified accordingly. Example: If an employee preparing for a managerial position demonstrates improvement in technical skills but still lacks decision-making ability, HRD may provide additional coaching and challenging assignments.

Step 8. Reviewing and Updating the Succession Plan

Succession planning is a continuous process, so organizations must regularly review and update their plans. Employees may be promoted, leave the organization, develop new skills, or change their career goals. Organizational strategies and position requirements may also change. HRD should therefore reassess potential successors and update development plans periodically. Example: A company expanding into international markets may revise its succession plan and develop future managers with international business knowledge and cross-cultural management skills.

Benefits of Succession Planning

There are several advantages for both employers and employees to having a formalized succession plan in place:

• Shareholders of publicly traded companies benefit from proper succession planning, such as the case when the next candidate for CEO is involved in business operations and is well respected years before the current CEO retires. Also, if investors observe a well-communicated succession plan, they won’t sell the company’s stock when the CEO retires.
• With Baby Boomer business owners and leadership retiring in huge numbers, a new generation of leaders will be needed.
• Employees know that there is a chance for advancement and possibly ownership, which can lead to more empowerment and higher job satisfaction.
• Management keeps better track of the value of employees so that positions can be filled internally when opportunities arise.
• Knowing that the company is planning for future opportunities reinforces career development among employees.
• Management’s commitment to succession planning means that supervisors will mentor employees to transfer knowledge and expertise.
• With succession planning, leadership and employees are better able to share company values and vision.

Need for Succession Planning

Succession Planning is a part and parcel of the Human Resource Planning, which acknowledges that the employees may or may not work with the organization in the future. And so to be at the safer side, a succession plan is developed to analyse the vacancies which might take place when an employee leaves the organization, the business areas which might be affected, job requirements and the skills of the existing incumbent.

Steps in Designing of HRIS

(1) Study the Present System:

In defining requirements or assessing the existing information system, three questions need to be answered; what is the present flow of information? How is the information used? How valuable is the information to decision making?

(2) Develop a Priority of Information that Managers Need:

Once the current system is understood well it is used to develop priorities. A manager must have certain information in order to make proper decisions. Other information is nice to have but is not essential to the manager’s decision-making. The HRIS must ensure provision of high priority information. Lower priority data should be generated only if the benefits exceed the costs of producing it.

One approach would be to have individual managers develop their own priority lists and then integrate them into a list for the entire organization. Certain departments will find that the information they identify as top priority would be far down the list for the organization as a whole. Here the needs of the entire organization might be the controlling factor.

(3) Develop the New Information System:

The organization wide priority list should govern the design of the HRIS. Information not worth the cost is excluded. A system of required reports should be developed and diagrammed. The entire organization is treated as a unit to eliminate duplicity of information.

(4) Choose a Computer:

Today, it is reasonable to assume that HRIS of most organizations will be computerized. Because of the increasing reliance on computers, the HR managers should be computer literate. The presence of computers is far too pervasive and their usefulness far too great for human resource managers to ignore their capabilities. Human resource software for personal computers is almost always the responsibility of the HR department.

The modern day complexities involved in managing a global labour force makes developing an effective global HRIS a necessity. Information concerning many factors affecting human resource must be shared. This information must be relevant and timely to assure that the best HR decisions are made.

HRIS Subsystems

Presently, HRIS is an integration of ‘HRM’ and the ‘Information System’. With the development of various concepts and sub-systems of the HR function, the top management’s perspective of HR has undergone a tremendous change prompting extensive use of computers that have the capability of pro­cessing, storing, and retrieving massive information of complex and diverse nature.

It helps managers to perform the HR function in a more effective, efficient, and systematic manner. It can be a potent weapon for lowering administrative costs, increasing productivity, speeding up response times, and improv­ing decision-making and customer service.

HRIS is now taken as an integration of activities of the HRM function and the information system in relation to basic HR activities, and covers people, poli­cies, procedures, and data required to manage the HR function. The most potent output of HRIS is the generation of various predesigned reports and graphical formats that help in the analysis of HR activi­ties for sound decision-making.

Top managements are increasingly making use of HRIS in various HR activities like HR planning and analysis, compensation and benefits, staffing, development of employees, performance evaluation, health, safety, and security, collective bargaining etc. Top managements are noted to have become more efficient by way of reduction in time spent on administrative work by 20 to 25 per cent and redeployment of time saved to higher tasks such as decision-making and employee development, eliminating paper and process inefficiencies.

Top managements’ horizon seems to have widened in realizing the transition of HR from an administrative department to a strategic department. Unlike in the past, the modern-day managements think of sharing data among all the functional areas to achieve organizational goals.

With that end in view, depending upon the financial constraints, choice of separate software for HR functions, and similar other considerations, an organization may choose either an integrated information technology solution like the ‘ERP System’ or a software like People Soft, SAP-HR, Abra Suite, Vantage, or Oracle-HRMS which are specifically developed for HR activities of an organization.

Mechanisms of HRIS

1. Organizational Management Module:

It is mainly used to perform numerous business and HR processes. This module is installed before any of the aforesaid modules is introduced. The information entered in this module is regarding the jobs, tasks, positions and their relationship in the organization, job description, employees working in dif­ferent positions along with their qualifications, profiles, and tasks performed by them, and the different departments in the organization.

(1) The module creates an organizational plan which depicts the functional structure of an enterprise. By relating jobs, tasks, and positions with relationship a network that mirrors the organizational reporting structure can be created and depicted via easy-to-use graphical tools. In addition to this, relationship to objects from other components like cost centres, employee, or user can be created.

(2) When an organization changes the core business process which in turn necessitates staffing adjustments, HR people can dynamically adjust the organizational model to reflect the new situa­tion. Regular evaluation of personnel situation can help avoid qualification deficit in the future.

(3) This component can be used to match employees’ qualification profiles with job requirement pro­files on a regular basis in order to pinpoint training needs and take the measures necessary to offset it.

(4) It also gives instant access to information on number of vacant positions, their associated job descriptions, activity and requirement profiles of the position, and when the vacancies must be filled. With organizational development and the organizational structure model in place an enterprise can swiftly and efficiently determine current and future staffing requirements.

(5) This module gives reliable information on the staffing position in the organization along with the reports on staff assignments, existing jobs, positions, and tasks in the organization.

2. Recruitment Module:

It is a powerful tool which optimizes the recruitment procedure and reduces administrative overheads, time, and money spent on handling job applications. By automating routine tasks and delegating them to the system, it relieves the strain of the HR department. Information regarding the advertisement of job vacancies, basic data of the applicants, minimum requirements of the job, and standard text for letter of receipt, letter of rejection, and contract of employment are entered in this module.

(1) Using the SAP-HR recruitment model the organization can advertise a job vacancy on the internet.

(2) When applicant data are entered, it also checks to see if any of the applicants are former employ­ees or are currently employed in the company. This module automatically provides the existing master records of these applicants. It also passes the electronic documents submitted by these applicants to the HR administrator.

(3) The status of the application can be found by the applicant by using the applicant number and password.

(4) The applicants are given a confirmation that the application has been received. When an applicant’s data are entered, this module automatically generates a confirmation of receipt of the applicant. The applicants can receive a letter of rejection generated automatically by the system.

(5) The application documents are scanned into the system and archived. This means that the applica­tion documents can be called upon directly from the system.

(6) This module reports the applicants transferred to the applicant pool who do not fulfill require­ments of the position advertised but have a qualification profile. It also reports the list of unsolic­ited applicants and the applicants put on hold.

(7) When a candidate is selected, a contract of employment is offered to the selected candidate. The HR manager completes the selection procedure by entering the data of hiring and information by transferring them to the personnel administration module and the HR master data.

(8) The system can create statistical reports or lists on applications received, vacancies, and adver­tisement. It finds the cost of recruitment and replacement. It studies the sources from which employees were drawn and correlates this with success on the job to see if some sources should be dropped or added. The skill database is maintained, allowing retrieval of a potential candidate for a specified job.

(9) This module is integrated with personnel development and training and enables the management to determine whether the applicant requires further training in certain areas.

3. Personnel Administration Module:

It creates and processes employee data precisely and efficiently. This module deals with employee-related personnel activities which are called ‘personnel actions’. The basic personnel activities such as hiring, organizational assignment or leaving are handled in the Master Data Administration in this system.

The personal data of each of the employees is entered—his name, date of birth, marital status, family mem­bers, blood group, email address, emergency contact phone numbers, permanent and temporary address, etc. Besides this, date of hiring, official assignments, dates of promotion, change of pay, date of leaving, etc. are also entered in this module.

(1) It tracks the chronology of data of all times and forms the basis for sound HR decisions at all levels.

(2) Through this system every type of employee information can be saved using HR info types. Info types are data entry screens. They contain separate items of information entered into fields.

(3) The system automatically adjusts all relevant employee data to actual entry data of the employee. If the employee moves to another cost centre of the company the organizational assignment of employee also changes.

(4) This software ensures consistent data at all times. This module allows automatic monitoring of data for HR processes that require follow-up activities. For example, when hiring an employee, the HR manager can specifically be reminded when the probation period ends so that necessary follow-up activities can be done.

(5) Optical archiving allows scanning original documents such as work contracts, performance appraisal, or employee photo and archive them in the system.

(6) The top management can evaluate lists like employees’ directory, family members, bank details, anniversaries of years of service, and statistical information like staffing levels, nationality, age, wage, and seniority. SAP Business Graphics enables to the editing of evaluation results in a graph­ical form.

(7) It gives the ‘personnel action’ list of employees regarding his hiring, organizational assignment, reassignment to another cost centre, change of pay, termination, and re-entry.

1. Payroll and Time Management Module:

It is an automatic planning table that is in-built in the system, and provides an overview of HRs available at a given moment. It helps in planning shifts, absenteeism management, recording working times, and compliance of labour laws. The country-wise versions are available to handle the payroll function. This can take care of multiple factors such as valuation of time data, partial payment calculation, reduction of company loans, etc.

Payroll is integrated with personnel administration, time management, and account­ing. Standardized data retention enables to use most of the data and payroll data from the personnel administration module. Time data entered via time management are automatically included in the pay­roll and valued during the payroll run.

The master file is composed of discrete pieces of information called data elements. Data are keyed into the system, updating the data elements. The elements on the master file are combined in different ways to make up reports of interest to the management and govern­ment agencies and pay cheques sent to employees.

(1) It calculates pay and includes tax tables in accordance with compensation regulations.

(2) The information on expenses and payables from the payroll is posted for accounting directly in financial accounting and it becomes easier to assign the costs to the appropriate cost centres.

(3) The system calculates gross and net pay which comprises individual payments and deductions that are calculated during the payroll period and received by an employee.

(4) The payroll system keeps track of money paid to the employee.

(5) The system generates pay cheques or direct deposits which are electronic transfers of compensa­tion funds from the company’s bank account to those of the employees.

(6) It determines the optimal health and retirement plans for each employee based on factors such as marital status, age, and other data.

2. Personnel Development Module:

It ensures that employees develop in line with the company’s goals, and at the same time enables to take individual preference of the employees into account. Personnel development has two important objec­tives. One is to ensure that there are enough qualified employees and managers in the organization; the other is to show all employees the career opportunities that are open to them, and to promote their work-related and social skills.

The career and succession planning components of the personnel develop­ment module provide powerful planning tools that help to achieve these aims. The data regarding career planning, succession planning, and performance appraisal are entered into this module. This module uses career planning to show employees what career opportunities are available if they perform well and prove suitable.

Pre-defined careers provide employees and applicants with the information on how they can progress within the organization. It can portray vertical and horizontal movements within the organizational structure and thus create all kinds of career paths for the employees.

Succession planning identifies candidates who are qualified in all respects to occupy a post at the present moment or in the future. In succession planning, the system enters information about qualifica­tions, career preferences of employees, estimated potential of employees, dislikes, and a pre-defined career.

(1) The system helps in obtaining the suitability of the potential successor and also gives concrete proposals for the training measures that need to be taken for individual candidates.

(2) The module reports the employees’ current suitability and personal preferences and forecasts what they are likely to be in the future. This system provides a powerful reporting and evaluation system.

(3) By performing various targets/actual comparisons the module helps in obtaining a realistic over­view of the company’s staffing structure.

(4) It helps in comparing employees’ profiles and displays the results in various formats so that analy­sis becomes easier.

(5) It can search through the entire company for persons with a particular qualification. This module is flexible and can be tailored to meet the company’s specific needs and personnel development strategy.

(6) It helps in identifying succession planning gaps in an organizational unit.

The organization can use this module for performance appraisal of employees. The appraisals are con­ducted using standardized criteria, thus ensuring maximum objectivity when results are calculated. It standardizes the process of employee evaluation by providing step-by-step guidelines to writing per­formance reviews, a check list of performance areas to be included in the evaluation and compute sub­totals of each category and weighted grade which can then be electronically stored as part of employees’ records.

(1) The system reports whether an employee was appraised in a given time period or not.

(2) It helps in determining which of the employees in an organizational unit have been appraised and by whom. It gives a list of the appraisals which have not been completed.

(3) It identifies persons who are over-qualified or under-qualified.

(4) It also identifies suitable applicants for a vacancy. As a personnel development instrument, an employee’s appraisal provides clear and reliable information to plan and monitor personnel development measures.

The additional modules in SAP-HR are travel management, training and event management, intranet employee self-service, and business workflow. SAP-HR is an integrated tool which is highly useful in multi-unit organizations whose operations are spread geographically.

Many of the HR decisions are data-based and fool proof maintenance of the same is imperative. Thus, integration of data helps an orga­nization to save on duplication efforts, man hours, and consequential financial cost. Circulation of data, transparency, and on-line employee communication are in-built benefits with this system.