final sp (2)
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T.Y.BMS
V
Semester
HUMAN RESOURCEMANAGEMENT
Pro ect on-
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Succession Planning
Professor in charge
Prof. Arshi Siddiqui
Compiled by:-
Kinjal Kareliya (11)
Neha Mhatre (20)
Sanya Tole(32)
Afreen Virani
(34)
Shafqat Shaikh
(50)
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ACKNOWLEDGEMENT
We would like to give our sincere Thanks to
Prof. Arshi Siddiqui for assigning such a
valuable and wonderful project, and giving us
an opportunity to explore a full-fledged
industry to carry out our analytical study for
this project.
This project will help us to curve our
personality in the best manner, which is
needed for professional career as well as for
our personal life & in fact this project is the
mirror of our aspiration.It is only through this
project we came across the essence of the
subject.
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INDEXSr. No Topic Page
No
1.
2.
3.
What is Succession planning?
Why is Succession Planning Important?
Ways to Implement
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10.
11.
12.
13.
Key Factors to be considered
Models of Succession Planning
Succession Planning Tools
Advantages
Disadvantages
Why Succession Plan Fails?
Case study- Ranbaxy
Suggestions
Conclusion
Bibliography
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Succession Planning
What is Succession planning?
Succession planning is a process of determining critical roles withinthe company, identifying and assessing possible successors, andproviding them with the appropriate skills and experience forpresent and future opportunities.
It involves having senior executives periodically review their topexecutives and those in the next lower level to determine severalbackups for each senior position. This is important because it oftentakes years of grooming to develop effective senior managers.
There is a critical shortage in companies of middle and top leadersfor the next five years. Organizations will need to create pools ofcandidates with high leadership potential.
A careful and considered plan of action ensures the least possibledisruption to the persons responsibilities and therefore theorganizations effectiveness. A succession plan clearly sets out thefactors to be taken into account and the process to be followed inrelation to retaining or replacing the person.
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Why is Succession PlanningImportant?
1.ASSESSING FUTURE NEEDSHaving this process in place is vital to the success of theorganization because the individuals identified in the plan willeventually be responsible for ensuring the company is able to
tackle future challenges.Examples include such a person who is
Suddenly and unexpectedly unable or unwilling to continuetheir role within the organization;
Accepting an approach from another organization or externalopportunity which will terminate or lessen their value to thecurrent organization;
Indicating the conclusion of a contract or time-limited project;
Moving to another position and different set of responsibilities
within the organization.
2.INDIVIDUAL DEVELOPMENT NEEDSThe 'high potential' candidates must be carefully selected andthen provided training and development that gives them skillsand competencies needed for tomorrow's business environment.
These high potentials will one day become the leaders of theCompany. This is why their development needs to incorporate abroad range of learning opportunities in your organization. Theindividuals should also be exposed to as much of the working
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environment as possible so that they gain a good understandingof what the company requires to remain successful.
3. COMPETITIONOrganizations that understand the need to manage thedevelopment of their high performers are a step ahead of theircompetitors! The effort required to establish a developmentprogram for future leaders is worthwhile because it creates amotivated and capable group of employees that are ready tomove forward in the organization when the need arises.
4.AN AID TO PLANNING PROCESSA succession plan clearly sets out the factors to be taken intoaccount and the process to be followed in relation to retaining orreplacing the person. Succession management systems providean enabling solution for the planning and process going throughall possible scenarios and providing the best solutions andshortest paths to succession. Having a decision making body andsuccession planning process is critical. However, software can
help make this process consistent, automated and fair.Succession planning teams can play what if scenarios to ensurethat they are thinking of all possibilities. They can search fortalent throughout the organization in different organizations andcountries. They can also ensure a continual and full pipeline oftalent.
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Ways to Implement
1.REVIEWING TALENT One of the challenges in all organizations is planning for HR
needs. It is essential to adopt a disciplined approach to match HRresources with the anticipated needs of an organization. Thisincludes aligning the succession planning process with businessstrategy. The purpose of the talent review is to figure out thetalent required to implement the business strategy and constantlystrengthen the talent pool. The talent review and planning processhelps us identify talent for emerging roles in the organization,
says Bijay Sahoo, vice-president (talent engagement anddevelopment) and head of HR, Wipro Technologies. Commitmentfrom the top management is another key factor for ensuring thesuccess of succession planning. Sahoo reveals that in Wipro, thechairman (Azim Premji) and vice-chairman and CEO (Vivek Paul)give enormous importance and their personal time for talentreview and planning, and personally supervise the developmentand implementation of the talent plan for key roles.According to Sahoo, the other essential factors are:
(a) Accountability, as the succession planning program requiresownership at all levels in the organization. Each manager shouldbe responsible for assessing and developing the talent in his orher team.(b) Constant attention, as it can be tempting to overlook the need
for succession planning in the face of more immediate needs.
2.PLANNING THE PROCESS
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The bench strength of current and future leaders gives acompetitive edge to every Organization. At Wipro, the successionplanning programme is called Talent Review and Planning (TRP),
and it is the most critical part of the organizations leadershipbuilding and talent management process. Once our businessstrategy for the year is finalized, we identify the critical roles toexecute it. We review the talent available for those rolesinternally as well as externally. We plan for the succession ofexisting critical roles, including that of the CEO, and identifyemployees who are ready to take over the roles immediately andover the next 1-2 or 2-3 years, informs
Sahoo. He adds that the company does developmental planning
for each identified internal candidate in terms of job rotation,training, coaching and performance counseling. They also keeptrack of potential external candidates, and establish touch pointsfor attracting them at the appropriate time.
The respective SBU heads and the SBU HR heads do the TRP forthe top three levels of their business. This contributes to the TRPat the Wipro Technologies level, where the chairman and vice-chairman, along with the HR head, get involved in talent planningfor the top three levels. Next is the implementation of the talent
strategies by developing and reviewing the action plan.Infinite Computer Solutions (ICS), which has a global headcount
of 1,800, employees have also taken up higher roles without achange in designation, with support from functional heads andsenior management teams. A skill-gap analysis is done of thecandidates, and requisite training provided to make them ablesuccessors.
3.CLEAR FOCUS
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It is a known fact that while most managements are interestedin developing a pool of successors for key positions, they find it adifficult task to ensure the success of their efforts. Successionplanning can get very complicated. Organizations must thereforehave a clear focus.
Wipro has quarterly talent engagement and development (TED)reviews, and action points of each SBU and vertical are tracked.We also track the number of senior positions that are filledinternally, which gives an indication of the success of theprogramme. At the macro level, the retention figure also reflectsthe effectiveness of the succession planning programme, sinceone of the objectives of the programme is to help employees
realize their career aspirations and thus retain them in theorganisation. Systematic succession planning does generateleadership talent, and an organisation can measure itseffectiveness by looking at the leadership talent it has createdand provided to the industry.
PERFORMANCE/POTENTIAL GRID
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4.THE TRAINING DIFFERENCE
Training plays a key role in succession planning. It is imperative tostrategize, design and implement programmes to train futureleaders.Wipro has its lifecycle leadership development programmes, whichare synchronized with the roles employees play at different stagesof their corporate life. These include the New Leaders Programme,
Wipro Leaders Programme, Business Leaders Programme andStrategic Leaders Programme for different leadership positions thatan employee will assume in the organisation.Most organizations do skill-gap analysis of the selected candidates.A schedule is drawn for the prospective individual to acquire theknowledge, skills and competencies within a time-frame, saysSunder Rajan, general manager, HR & administration, ICS. He addsthat the training could be through internal programmes or on-the-
job (local as well as global) to gain cross-functional or cross-
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geographical exposure for better maturity of the expertise thatwould enhance the confidence level of the person.
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5.JUST-IN-TIME SUCCESSION
Then theres just-in-time succession, which maps existingcompetencies of the staff to fill an important position. Successionplanning software uses competency analysis which letscompanies understand the demand side of the equation withwhat their staff has to offer. Succession planning is not an issueof a position; you can plan for two or three years, but by thattime the to-be-successor may have already left the organisation;consequently it is not relevant. Instead of looking at a job to fill,organizations should profile it in terms of competencies, go tothe data bank, and find whose competency profile matches the
job, advises Stephen Martin, president of ITAP Europe. The keyto this is competency development across the organisation; ITAPhas done succession planning for many global organizationsthrough competency development.
In other words succession planning comprises of theseimportant steps -
Recruitment and staffing - you recruit superior and rightemployees
Training and development -you train the employees todevelop their knowledge, skillsand abilities
Performance andCompensation management -
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prepare them for advancement or promotion into ever morechallenging roles
Other (in which talent management plays a role) - you are
prepared to retain or replace superior employees
Typical activities covered by successionplanning include - Determine what roles and skills are critical for the growth of
the company
analyze and address the gaps revealed by the planningprocess
identify and understand the developmental needs ofemployees to fill those positions
ensure that all key employees understand their career pathsand the roles they are being developed to fill
train people for skills and positions that are not presentlyexisting in the company
understand the time needed to backfill key roles
enrich succession plans through regular executive discussionof people and posts
identify top performers in all departments and make sure thatthey are engaged and satisfied to stay with you for a long
period continually review and check the process of succession and
whether planned individual development has taken placeSuccession planning is a process by which successors are identifiedfor key positions throughout an organization including vital roles ineach department of the organization. It should take into account thestrategic vision and objectives of the organization. With goodsuccession planning in place, employees are ready for newleadership roles so when someone leaves the company, another isskilled and ready to step-up to that position. Succession planning
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can also help develop a diverse workforce, by enabling seniormanagement to look at the future goals of the organization as awhole.
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A Sample Succession chart
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Key Factors to be considered
The key factors HR professionals should consider whiledeveloping a succession plan are
Strategic plans and future goals
Workforce requirement
Knowledge retention and critical roles
Talent management strategies
Models of Succession Planning
There are three main models that companies use to implementsuccession planning:
Short-term planning or emergency replacements Long-term planning or managing talent
Combination of above plans
Organizations should take a close look at their goals and levelsof commitment
Short-term or emergency replacements
For any succession plan to be effective, it should havethese salient features:-
The succession planning program must have the support andbacking of the company's senior level management
Succession planning must be part of an integrated HR processthat includes training, development and performance appraisal
Succession planning must be part of an integrated HR processthat includes training, development and performance appraisal
Identify what skills the organization will need in 5, 10 or 15years
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Critical positions must be identified and included in theCompany's succession planning program
Identify high-performers that are almost ready to step into
those critical positions Analyze the workforce and identify who will be eligible for
retirement within the next five years
Managers need to identify the responsibilities, skills andcompetencies that will be needed by their replacements
A system for communicating succession planning informationto managers must be established
A systematic approach for identifying, nominating andselecting potential successors must be established
Background information on potential successors, such aseducation, experience, skills, appraisals and potential shouldbe reviewed
The training and development requirements of potential successorsneeds to be determined
The skills of potential successors must be developed through workexperiences, job rotation, projects and other challenging assignments
A system for monitoring candidates development plan progress by seniormanagement should be established
Succession planning must include a system for providing feedback and
encouragement to potential successors Succession planning is basically a numbers game that requires good
organizational skills and the ability to pay attention to details
Finally, the succession plan must belong to the organization and not tothe HR department in order to make sure it has the attention it deserves
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Models of Succession
PlanningThere are three main models that companies use toimplement succession planning:
1. Short-term or emergency replacements
This is the most common model of succession planning andserves as a crucial point for all types of businesses. Short-termreplacement planning is focused on an urgent need caused by a
sudden development within the organization skilled employeeleaving the company, expansion or contraction of business.Sometimes, emergency replacement planning must work toretain knowledge that is about to be lost. Emergency knowledgeretention is an option to consider if the organization is about tolose specialized knowledge and does not have a successor totake the knowledge. Emergency succession planning can comeinto play any time the organization expands in a new direction ordiscovers the talent gaps to fill the required managerial position.
Generally, human resources will try to fill the role from within theorganization, but often go outside, if no one has been trained forthe job in the organization.
Long-term planning or managing talent
Talent management focuses on the future needs of theorganization. Working within the strategic framework for thecompanys future goals, senior management identifies thepositions necessary for growth and the best candidates to fill
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those roles. Some organizations invite all employees to take partin an assessment process, while others have managers identifyleadership candidates. If companies wish to grow leaders from
within their existing talent pool and have the time and resourcesto develop a useful program, effective talent management willbecome a key component of its long-term human capitalstrategy.
Advantages Disadvantages Identifies a specialized
talent pool
Defines and builds futureskills required for thesuccess of the organization
Motivates and retainsemployees by involvementin their career growth
Expensive and time consuming
Existing employee-base may not
have required skills and experience
for key posts and outside hiring
can lead to resentment
Managers may be frustrated by not
being allowed to choose a
successor
2. Combination of both the plans
This model allows senior management to plan for the long-term
growth of both the organization and employees within theorganization and prepare for emergency replacements to ensurethat business is not affected by knowledge loss or lack of skilledemployees.
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Succession Planning ToolsSuccession planning starts when you can accurately measure theperformance of the employees assess skills and career growthinformation. Succession planning tools need to have extensiveintegration and customization options to support all of your talentmanagement efforts.
To identify a correct succession planning and talent managementsystem you need to have a software that -
o Has a performance management system that delivers accurate
datao Self-service online resumes for employees
o Has a recruiting system that enables to transfer information onnew hires directly to your succession planning analysis and datao Integrates with your HRIS position/job management data with
links to competencies and other qualificationso Is a powerful bench strength assessment tool that can share,
review and analyze data to provide latest and updatedinformationo Uses easy interactive tools or matrices for assessing employee
potential, flight risk and impact of loss
o Provides the needed framework for effective gap analysiso Has a search capability based on multiple filters and employee
characteristicso Provides a view of your succession plan in any format,
including organizational charts with concern areas highlightedo Provides with a complete career inventory data for each
employee readily at hand, managers can specify targeted futurejobs for colleagues and indicate a readiness timeframeo Customizable email reminders
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o Informative visual reports and dashboard
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ADVANTAGES
Succession planning helps you take a more strategic approach toleadership development, employee skill assessment and perhapseven more important as baby boomers retire preserving criticalorganizational knowledge. With incumbents ready to go any time anexpected or unexpected change occurs in your organization, youcan ensure business continuity at all levels of the organization. themain advantage of succession planning in an organization is theactive development of a strong talent resource for the future whichis vital to attract and retain the best and key people which will help
in present and more for the future growth of the organization.The key is to match the needs of the organization to the goals of theindividual. Keeping talented people in place by providing them withopportunities they may not receive elsewhere will create a strongerand more loyal group of future managers and executives thussaving the companys recruiting and hiring costs over the long-term
Organizations use succession planning to achieve a number
of objectives like: Improve recruitment process for key positions Active development of longer-term prospective successors by
ensuring their career growth and analyzing work,responsibilities, skills and knowledge required for the future
Audit the talent pool of the organization and that helps inallocation of responsibilities and development strategies andfill the identified talent gaps
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Build a key talent resource of employees who share key skills,knowledge, experiences and values seen as important to thefuture of the organization
It helps having the right people with right skills in the right jobsdoing the right things. If they people are doing wrong thingsthen you are right back where you started.
It provides An ongoing supply of well trained, broadly experienced, well-
motivated people who are ready and able to step into keypositions as needed.
A cadre of desirable candidates who are being integrated into
the company with positive goals established for themindividually.
A flow of these capable people through various departmentswith the goals of educating them into the culture andprocesses of the company.
Alignment of the future needs of the company with theavailability of appropriate resources within the company.
Positive goals for key personnel, which will help keep themwith the company and will help assure the continuing supply of
capable successors for each of the important positionsincluded in the succession plan.
Defined career paths, which will help the company recruit andretain better people.
Very likely, the continuous input of ideas to improve theinternal processes and procedures of the company, as well asthe opportunities to improve the offerings and services of thecompany in the marketplace.
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DISADVANTAGES
Succession planning suffers from pitfalls like:- Focusing only on the 'technical competencies' and failing toconsider the team-building and leadership developmentrequirements
Underestimating people within the organization or overlookingemployees that don't appear to fit your standard 'companytemplate'
Implementing a program that is designed for upward mobilityonly - lateral succession moves should also be included in theplan
Failing to offer the appropriate training and developmentalopportunities
Creating a development program that only offers generic'leadership' training programs
And the two biggest errors made regarding successionplanning efforts:Not holding managers & leaders accountable for succession
planning
Not sharing the data with employees - you run the risk oflosing promising employees if they don't feel the company hasa plan for their development
Lack of a formal written plan for each key person or position.
A rigid, inflexible plan NOT tailored to the needs and abilities ofthe personnel involved.
Too long a wait for real movement/promotion, potentiallyresulting in the best people leaving due to apparent inertia inthe system.
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Too superficial an approach, with the corresponding lack of realunderstanding of the procedures, processes and requirementsof each area the individual is exposed to during the process.
Selection of unqualified or unmotivated people for inclusion inthe succession plan. Quality of the individuals selected isparamount to the success of the process.
The succession planning process needs to be considered aspart of the company's strategic planning process because itdeals with projecting future changes by anticipatingmanagement vacancies and then determining how to meetthese challenges.
This is why succession planning must be a coordinated effortbetween HR and line and senior executives must ensure theline managers get involved with their own division successionplanning efforts.
Finally, don't make the mistake of thinking succession planningis only concerned with 'upward' succession. Lateralassignments may also be used because there are feweropportunities as you progress upward in the organization.
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WHY SUCCESSION PLAN
FAILS? Lack of a formal written plan for the person or position(s). A rigid, inflexible plan NOT tailored to the needs and abilities of
the personnel involved.
Complex program, requiring considerable paper work, follow-up,
reporting.
Lack of availability of human and financial resources; lack of
budgetary commitment.
Lack of understanding how it works and how it benefits the
organization.
Individuals, other than the Champion, do not support the
program.
Superficial approach; lack of real understanding of the
procedures, processes and requirements of each area theindividual is exposed to during the process.
Too long a wait for real movement/promotion, disillusionment,
may result in some people leaving due to apparent inertia in the
system.
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Selection of unqualified or unmotivated people for inclusion in the
Succession Plan. Quality of the individuals selected is paramount
to the success of the process.
The requirements of the Managers/ Executives are not fulfilled in
providing dedicated instructions, guidance regarding skills,
knowledge and abilities needed for the candidates to be
successful.
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Case study- Ranbaxy
In 1952, an entrepreneur Bhai Mohan Singh founded Ranbaxyas a manufacturer of pharmaceuticals in Mohali in Haryana.Like most other small pharmaceutical companies, Ranbaxy toowas mainly engaged in producing drugs by reverseengineering the molecules of established drug brands.
In 1967, Dr Parvinder Singh (Dr Singh), Bhai Mohan Singh'sson, joined the company after completing his doctorate inpharmacy at the University of Michigan (USA). Dr Singh was avery ambitious person and worked hard to take the company
to greater heights. In 1982, he became the company'sManaging Director .
Brar had joined Ranbaxy in 1977 as a business developmentmanager. A thorough professional and hard worker, he soonrose through the company's ranks to become one of Dr Singh'smost important and trusted men
In 1993, Brar became the President and a whole time Director.From the very beginning of his career at Ranbaxy, Brar was aclose confidant of Dr Singh.
Company watchers felt that it was 'Parvinder's vision andBrar's execution which helped Ranbaxy turn into a group withmany manufacturing facilities outside India with more than2,000 overseas employees
In the early 1990s, differences cropped up between Dr Singhand Bhai Mohan Singh over the growth route the former wascharting for the company. Dr Singh wanted to take the risk ofinvesting huge amounts into basic R&D and in expandingoperations to other countries.
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Brar supported Dr Singh's vision of internationalizing thecompany by setting up operations in various countries likeChina, US, Ireland, and others in Europe. In the late 1990s, Brar
chalked out a strategy to shift half the company's business tothe US, a decision which was staunchly opposed by membersof the Singh family
Brar as Ranbaxy CEO and MD.
When Brar took over as Ranbaxy's MD & CEO, the company didnot have any family representation on the board. It was truly acompany managed by professionals. However, by thebeginning of the 2000s, the Singh family reportedly decided totake control of the firm.
Reportedly, he had revealed his retirement plans in 1997 itself.Brar had said that he would retire in 2002, after completing 25years with Ranbaxy
Tempest takes over. Tempest is expected to continue tillMalvinder Singh is groomed to done the mantle
Under the leadership of Tempest, Ranbaxy planned to focus onHR planning
About the case
The case discusses the CEO succession planning controversyat Ranbaxy Laboratories Limited (Ranbaxy), India's largestpharmaceutical company.
The case describes how and why Parvinder Singh (Ranbaxy'spromoter, also CEO) believed in running the businessprofessionally and handed over the company's management toD S Brar (Brar), a professional (and a non-family member),
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amidst stiff opposition from family members. The case thendetails how Brar transformed Ranbaxy from a small Indianpharmaceutical company into a research based global
pharmaceutical major
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Suggestions
Market pressure is increasing day by day and in order to facethe market pressure the succession planning should be done in sucha way that different players of top management can handledifferent roles or one man should be able to do all work and handleall roles.The man for all seasons
The top management is the one who heads all thedepartments and prepares rules regulations and does planning forthe organization. Thus this top management should not be inpressure so that the other employee who is being promoted to top
management should feel comfortable at his place as the new personwill not be able to handle the pressure at the beginning.
Every organization requires special talent for its topmanagement so the organization should fulfill all the needs andrequirements of the deserving and talented people whom they feelcan be recruited to the top management. This will ultimately help intalent retention.
We suggest that every organization should follow successionplanning so that the top management of the organization is with
talented people and also during emergency they have a propersubstitute for the same.
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ConclusionBy the end of our project we come over to a conclusion related
to succession planning that most of the companies still feel thattheir growth was limited because they did not have the right talent
and many companies lack the right leadership talent.
Most companies and executives do not have confidence on
their top level executives as it is agreed to the fact by the
employees that company leadership is key contributor to job
satisfaction, commitment and interest to stay. Most employees
always value leadership qualities of honesty and integrity.
It has been seen that only 1% of companies only rate their
succession planning as excellent and rest as fair or worse.
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Bibliography
Websites
www.wikipedia.comwww.ranbaxy.comwww.managemennt.com
Google Search Engine
Books
Ashwathapa- Human Resource Management
http://www.wikipedia.com/http://www.ranbaxy.com/http://www.managemennt.com/http://www.wikipedia.com/http://www.ranbaxy.com/http://www.managemennt.com/