Key Position Planning

Key Position Planning:
Putting People in the On-Deck Circle

Jim Brinks, Reports Operations Director
Culpepper and Associates, Inc.

A critical aspect of human resources planning is finding a way to fill key positions when they become open. Unfortunately, many software companies fail to give this the attention it deserves. If they did, not only would potential crises be averted, but a well-designed plan might prevent vacancies from occurring as often.

Culpepper and Associates’ report, Structures, Staffing, Turnover, and Performance Management, finds that companies that are best at refilling key positions have well-developed promotability systems that keep qualified employees ready and waiting for their chance to move up.

A key position is a job slot that is critical to achieving annual business objectives. If this slot were left open for a prolonged period, business objectives would be jeopardized. Obviously, each company must define its own key positions, but every organization has them.

Several elements commonly appear in position planning systems used for key personnel transitions. These criteria should be reviewed each year. Criteria include:

A performance/potential matrix highlighting candidates who should be considered for key position promotions,
A process for reviewing position-by-position the key jobs in the organization,
A promotability list derived from these first two documents,
Career path planning and review sessions conducted periodically with good performers who have high potential.

Follow the Performance/Potential Matrix
While deceptively simple, the chart below is potentially one of the most important documents any business organization can possess. It’s most useful when you construct a matrix for each business unit/division and then compile an overall chart from these for the entire company.

Performance/Potential Matrix

Performance

	1=Unlimited (10%)	2=Good (40%)	3=Fair (30%)	4=Limited (20%)
Performance
1=Significantly Exceeds(10%)
2=Exceeds Expectations(20%)
3=Meets Expectations (60%)
4=Doesn't Meet All Expectations (7-8%)
5=Unsatisfactory (2-3%)

The vertical axis is for individual performance and ranks all employees by a five-level performance rating. You should obtain these ratings from individual performance reviews. However, these sometimes suffer from “ratings creep”—the tendency for ratings to rise higher and higher until a majority of employees rank in the first and second levels. When ratings creep becomes a problem, some companies resort to setting targeted percentages for each performance category. When managers are required to justify their ratings, they will often find that the targeted percentages are very close to the truth.

The horizontal axis in the chart is for promotability. This is shown with a full four-level scale, although many companies merge levels three and four. Again, each company should set its percentages of target distribution.

Definitions of promotability involve management’s assessment of the employee’s realistic likelihood of advancement. For example:

Level 4 (Limited): not likely to advance beyond current level of responsibility.

Level 3 (Fair): limited in promotability; certainly able to take on further responsibilities at current organizational level or grow in current duties/skills over next 2–5 years.

Level 2 (Good): currently seen as able to advance at least one organizational level above current responsibility within 2-5 years.

Level 1 (Unlimited): able to advance at least two and probably more organizational levels within 2-5 year period.

Using management-by-exception principles, this chart defines and highlights two groups of employees.

Key Employees: The Upper Left
Names entered in the four upper-left-hand boxes (1-1, 1-2, 2-1, and 2-2 performance/promotability candidates) are the company’s key employees. If managed properly, from them will probably come the company’s next generation of technical and managerial leadership. Employees in these four boxes should be considered for any key position planning.

Employees whose names fall in the upper left are also a good source for career growth and development programs. A company should focus its career planning and training programs on these valuable employees, so they will be ready when promotion opportunities occur. In the meantime, these employees can gain experience by serving on special projects anywhere in the organization.

Should an unexpected opening occur, this matrix system is especially useful. Look at the upper-left quadrant and start your search for the best candidates.

Once managers begin to see the usefulness of this tool, they won’t want to be without it. And, once employees begin to realize its existence and significance, the race will be on to improve their performance and promotability. Perhaps this is the encouragement employees need to stay a half hour later or come in on a Saturday.

If a downsizing is inevitable, companies should do everything possible to retain these pre-identified highly rated employees. Since these employees are the very lifeblood of the organization, you might consider offering them programs such as stock options or filling in for sick or vacationing supervisors or managers. Recognizing that competitors will probably try to recruit these employees, a smart company will focus on trying to retain them.

Marginal Employees: The Lower Right
The opposite quadrant is of almost equal importance. The four boxes at the lower-right corner of the matrix contain the names of your most marginal employees. If the company’s productivity is to improve, this is an effective place to start. Pour on the job-training, special supervisory counseling, and even remedial or motivational training. Although the number of employees in this lower-right quadrant is not great—probably only 10-15 percent of your overall population—they have a significant negative impact on productivity.

It’s like having a fine sailing ship but sailing with the anchor out or driving a car with the parking brake on. Just think what would happen if all employees in this group could be honestly—not through ratings manipulation—brought up to “meets expectations” performance and could take on additional responsibilities. Clearly, the effect would be significant!

It is probably true that changing the motivation, expectations, and performance of these sub-par performers can have more impact on the bottom line than by focusing attention on the top performance/top potential group. The latter are usually highly motivated already.

Think of it in terms of revenue. You have 10 business units reporting to the CEO. Two are blowing the roof off of their performance goals; six are growing, profitable, and hitting their targets; but the remaining two units have declining revenues and are losing money. What would happen to the bottom line if these last two units could just be brought up to neutral?

In the event of a layoff, this group of lower-right employees should be the first to go. In order to continue improving the lifeblood of the organization, some companies plan on releasing some portion of these employees each year, hopefully replacing them with more productive, motivated, and promotable employees.

Not a Solo Solution
The matrix should be used as but one tool—albeit a very powerful one—in a toolbox of strategies for promoting the right people. This approach, along with having an open job posting program and a well-designed training and development program, for instance, makes a great combination. If you use this tool alone in selecting people for promotion or developmental transfers, you risk missing a talented person whose skills have, as yet, not been highlighted. And if you rank employees without giving them the opportunity to improve their skills and rise in promotability, there’s a danger of creating a caste system that might actually demotivate lower-rung performers further.

Adapted from Structures, Staffing, Turnover, and Performance Management.

Article from Issue 152, October 1996.