SUCCESSION PLANNING, EMPLOYEE RETENTION AND ORGANISATIONAL EFFECTIVENESS AMONG SOME SELECTED ORGANISATIONS IN GHANA. BY JONATHAN TETTEH (10285647) THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MPHIL INDUSTRIAL AND ORGANISATIONAL PSYCHOLOGY DEGREE JULY, 2015 University of Ghana http://ugspace.ug.edu.gh i DECLARATION I, Jonathan Tetteh, hereby declare that this thesis has been conducted by me under the supervision of Dr. Maxwell Asumeng and Dr. Kingsley Nyarko. This thesis has never in its present form, or in any other form, been presented to any other examining body for the award of any degree. Where the views and ideas of others have been used, they have been duly acknowledged. I therefore take responsibility for any inaccuracies and shortcomings, which may be detected in this thesis. ……………………………………… Date: ......../......./2015 Jonathan Tetteh (Student) This thesis has been submitted for examination with the approval of: ……………………. ………………… Date: ......../......./2015 Dr. Kingsley Nyarko (Principal Supervisor) .............................................................. Date: ......../......./2015 Dr. Maxwell Asumeng (Co-supervisor) University of Ghana http://ugspace.ug.edu.gh ii DEDICATION I dedicate this work to the Almighty God, for the strength, wisdom and gift of life for putting together this thesis. I also dedicate this thesis to my parents, Mr. Jonathan Tetteh and Mrs. Sheila Tetteh for their immense support for my education and success in life. I appreciate the sacrifices you have to make to bring me this far. I love you Mr. and Mrs. Tetteh. To my uncles, Mr. E. K. Adjierteh, Mr. John Dromo, Mr. Victor Annan and Mr. John Darko for their advice and attention when I call on them. To my blessed sisters, Hellen Tetteh and Mary Quaye for supporting me during my difficult moments while preparing this thesis. Finally, I dedicate this thesis to my best friend, Carl Seyram Necku, for his good counsel, encouragement and generosity. God bless you all. University of Ghana http://ugspace.ug.edu.gh iii ACKNOWLEGEMENTS I thank the Almighty God and my saviour, Jesus Christ, for the grace, mercy and love for seeing me through this very challenging but successful period of my life. My heartfelt gratitude also to Dr. Maxwell Asumeng and Dr. Kingsley Nyarko, my supervisors and lecturers for their patience, time and guidance in supervising my thesis. Their constructive criticism and quick feedback made it possible to complete my thesis on time. They have brought the best out of me and I am forever grateful to them. To the management and staff of Ghana Civil Aviation Authourity, Cocoa Processing Company, Pioneer Food Cannery and Ecobank Tema, I say thank you. There would not have been any data to analyse to come out with this thesis without your approval to use your organisations in the data collection. Finally, my appreciation goes to all my friends, especially the course mates I studied with and spent good moments with during my two years training in Industrial Psychology. They were not just interesting friends but great family who made my masters program very successful. University of Ghana http://ugspace.ug.edu.gh iv ABSTRACT The study examined the relationship between succession planning, employee retention and organisational effectiveness among some selected organisations in Ghana. It further examined the effect of career development program on the relationship between succession planning and employee retention and also on the relationship between succession planning and organisational effectiveness. One hundred and eighty-eight (188) respondents were conveniently sampled from four organisations; two from the private and two from the public sector in the Greater Accra Region of Ghana. Using a quantitative design, all selected participants completed questionnaires on Succession Planning, Employee Retention, Organisational Effectiveness and Career Development Program. The Multiple Analysis of Variance and Hierarchical Multiple Regression were conducted on the data. The results indicated that, succession planning significantly predicted employee retention and organisational effectiveness. The result further indicated that, career development program significantly moderated the relationship between succession planning and employee retention. Career development program also significantly moderated the relationship between succession planning and organisational effectiveness. Based on the research findings, theoretical and practical implications are discussed as well as limitations and suggestions for future research also highlighted. University of Ghana http://ugspace.ug.edu.gh v TABLE OF CONTENTS DECLARATION .................................................................................................................... i DEDICATION ...................................................................................................................... ii ACKNOWLEGEMENTS ................................................................................................... iii ABSTRACT ......................................................................................................................... iv TABLE OF CONTENTS ...................................................................................................... v LIST OF TABLES ............................................................................................................ viii LIST OF FIGURES .............................................................................................................. ix LIST OF ABBREVIATION .................................................................................................. x CHAPTER ONE .................................................................................................................... 1 INTRODUCTION ................................................................................................................. 1 1.0 Background of the Study ............................................................................................. 1 1.1 Statement of Problem ................................................................................................. 11 1.2 Aims and Objectives of Study ................................................................................... 14 1.3 Relevance of the Study .............................................................................................. 15 CHAPTER TWO ................................................................................................................. 18 LITERATURE REVIEW .................................................................................................... 18 2.0 Introduction ................................................................................................................ 18 2.1 Theoretical Framework .............................................................................................. 18 2.1.1. Requisite Organisation Theory .............................................................................. 19 2.1.2. Job Embeddedness Theory .................................................................................... 21 2.1.3. Goal Theory ........................................................................................................... 23 2.2 Review of Related Studies ......................................................................................... 27 2.3 Rationale of the Study ................................................................................................ 49 2.4 Statement of Hypotheses ........................................................................................... 52 2.5 Conceptual Model ...................................................................................................... 52 2.6 Definition of Terms ................................................................................................... 53 University of Ghana http://ugspace.ug.edu.gh vi CHAPTER THREE ............................................................................................................. 55 METHODOLOGY .............................................................................................................. 55 3.0 Introduction ................................................................................................................ 55 3.1 Population .................................................................................................................. 55 3.2 Sample Size and Sampling Technique ....................................................................... 56 3.3 Research Setting ........................................................................................................ 59 3.4 Research Design ........................................................................................................ 59 3.5 Measures .................................................................................................................... 60 3.6 Pilot Study .................................................................................................................. 63 3.7 Main Study / Data Collection Procedure ................................................................... 65 3.8 Ethical Consideration ................................................................................................. 67 CHAPTER FOUR ............................................................................................................... 69 RESULTS ............................................................................................................................ 69 4.0 Introduction ........................................................................................................... 69 4.1 Preliminary Analysis ............................................................................................. 69 4.1.1 Analysis of the Normal Distribution of Variables ............................................ 69 4.1.2 Factor Analysis .................................................................................................. 70 4.1.3 Reliability Analysis of the Scales...................................................................... 77 4.1.4 Descriptive Analysis ......................................................................................... 77 4.1.5 Pearson Correlations among Study Variables ................................................... 78 4.2 Hypotheses Testing ............................................................................................... 79 4.3. Summary of Findings ................................................................................................ 88 DISCUSSION ...................................................................................................................... 90 5.0 Introduction ................................................................................................................ 90 5.1. Discussion of findings .............................................................................................. 90 5.1.1. Succession planning, employee retention and organisational effectiveness. ......... 90 Succession planning and organisational effectiveness .................................................... 94 University of Ghana http://ugspace.ug.edu.gh vii 5.1.2. Career development program as a moderator in the relationship between succession planning and employee retention. .................................................................. 96 5.1.3. Career development program as a moderator in the relationship between succession planning and organisational effectiveness. .................................................... 99 5.2. Limitation of the study ............................................................................................ 103 5.3. Implications for practice ......................................................................................... 104 5.4. Recommendation for future research ...................................................................... 106 5.5. Conclusion .............................................................................................................. 106 REFERENCES .................................................................................................................. 109 APPENDICES ................................................................................................................... 130 University of Ghana http://ugspace.ug.edu.gh viii LIST OF TABLES Table 3.0: Summary of Demographic Characteristics of Respondents…………… 58 Table 3.1: Summary of the Reliability Statistics Obtained for the Scales in Pilot Study…………………………………………………………… 65 Table 4.0: Factor loadings based on a principal component analysis of the twenty-five items on the Succession Planning Scale................................ 72 Table 4.1: Factor loadings based on a principal component analysis of the eleven items on the Employee Retention Scale………………………………… 73 Table 4.2: Factor loadings based on a principal component analysis of the twenty-nine items on the Organisational Effectiveness………….…….. 75 Table 4.3: Factor loadings based on a principal component analysis of the twelve items on the Career Development Program Scale..……………………. 76 Table 4.4: Summary of Descriptive Statistics of Variables in the Study………… 77 Table 4.5: Summary of Pearson Correlation Matrix of the Relationships between Study Variables………………………………………………………… 78 Table 4.6: Summary of MANOVA Results……………………………………….. 80 Table 4.7: Summary of Between Subject Effects…………………………………. 80 Table 4.8: Summary of the Hierarchical Multiple Regression for Career Development Program on the Relationship between Succession Planning and Employee Retention…........................................................ 84 Table 4.9: Summary of the Hierarchical Multiple Regression for Career Development Program on the Relationship between Succession Planning and Organisational Effectiveness…………………………… 86 University of Ghana http://ugspace.ug.edu.gh ix LIST OF FIGURES Figure 2.0: Summary of hypothesized relationship between predictor variable and the criterion variables as well as the moderating variable……..…… 53 Figure 4.0: Path diagram of the moderating model………………………………... 83 Figure 4.1: Career Development Program as a Moderator between Succession Planning and Employee Retention……………………………………… 85 Figure 4.2: Career Development Program as a Moderator between Succession Planning and Employee Retention……………………………………… 87 Figure 4.3: A summary of the observed relationships between the independent, moderating and dependent variables……………………………………. 88 University of Ghana http://ugspace.ug.edu.gh x LIST OF ABBREVIATION APA American Psychological Association ASTHO Association of State and Territorial Health Officials CDP Career Development Program CEO Chief Executive Officer CO Customer Orientation CPL Cocoa Processing Limited ECH Ethics Committee for Humanities ER Employee Retention ES Employee Satisfaction FGP Financial and Growth Performance GCAA Ghana Civil Aviation Authourity HR Human Resources HRM Human Resources Manager IBM International Business Machines IT Information Technology NGO Non-Governmental Organisation NHL National Hockey League OC Organisational Commitment OE Organisational Effectiveness PA Performance Appraisal PCA Principal Component Analysis PFC Pioneer Food Cannery RO Requisite Organisation SHRM Society for Human Resources SME Small Medium Enterprise SP Succession Planning UAE United Arab Emirate University of Ghana http://ugspace.ug.edu.gh 1 CHAPTER ONE INTRODUCTION 1.0 Background of the Study Organisations over the past few decades find themselves in a time in which the demand for services has increased, the expectation for quality service is high, and the accountability for results is exceptional. Organisations for that matter are now being results-driven, person- centered, and market-based. This is all in an effort to improve and drive organisations toward becoming high performing ones, thus, ensuring organisational effectiveness and efficiency. To become a high performing organisation therefore requires an investment in the people working in the organisation. Every organisation value its employees especially those with exceptional skills. It is generally agreed that the biggest contributors to organisational success and performance are the employees. Over the years, organisations, both public and private, have had issues with strengthening and retaining their workforce due to unforeseen challenges. According to Jarrell and Pewitt (2007), the public sector, for instance, is facing a host of new economic, social, and demographic issues, such as globalization, outsourcing, downsizing, hiring freezes, budget cuts, an aging population, and smaller size of the succeeding generation. This notwithstanding, simply recognizing this labor force dilemma is an important first step for public agencies (Kiyonaga, 2004). Furthermore, it is predicted by Carroll and Moss (2002) that by 2006 state governments could lose over 30% of their total workforces, leading to a significant erosion in institutional knowledge and expertise. Additionally, Kim (2003) also estimates that some government agencies will lose 40% to 50% of their workforces, resulting in the retention of personnel with fewer than 15 years of experience, as well as large numbers of employees slated to retire within 15 years. Instances and predictions such as these demand a good strategic planning in organisations. University of Ghana http://ugspace.ug.edu.gh 2 Likewise, Ingram (2014) pronounced that, planning is a key management role in any organisation, whether a private business, a non-profit organisation, a corporate business or a government agency. Managers engage in different types of organisational planning to strategically steer their companies towards profitable and successful futures. Ingram (2014) further articulated that high-performance organisations do not develop by chance; rather, a competitive workforce is the result of years of effective planning and successful plan implementation. Thus, having a workforce (i.e., human capital) alone is not adequate for a firm to earn a competitive advantage. Rather a firm must utilize the workforce as a strategic resource to sustain a competitive advantage (Kutcher, Jones & Widener, 2009). One planning technique is to attempt to quantify uncertainties, such as demand fluctuations, leadership gap due to retirement, sickness, death and resignation, and equipment breakdowns by anticipating their likelihood and developing strategies to prevent or overcome these challenges (Negrea, 2008; Rothwell, 2005; Bisbee, 2005; Armstrong, 2003; Weisman & Vaughan, 2002). Taylor (2002) identifies three types of planning that aim at achieving practical goals and objectives of organisations.  Micro planning: deals with forecasting supply and demand for specific groups.  Contingency planning: covers the situation where possible scenarios are examined and the implications assessed before major decisions are taken.  Succession planning: is a third type that focuses on manpower planning activity such as recruitment and progression of employees in order to fill managerial and top positions. The focus of this study is however on succession planning in organisations. University of Ghana http://ugspace.ug.edu.gh 3 On Wednesday August 24, 2011, Steve Jobs announced his resignation after 14 years as CEO of Apple as well as co-founder of the company. His resignation letter as published by The Wall Street Journal online, read as follows: “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple. I believe Apple’s brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role. I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you”. Steve Jobs, in his letter, did not only remind the board, management and employees of what he had promised but also named his successor and assured all of his continued interest in Apple and his desire to remain a part of its future. Steve Jobs acknowledged the enormous value of succession planning noting that its presence makes the future “bright and innovative”, whereby, its absence could lead to the otherwise. Steve Jobs ensured that the business continued, identified a successor and pledged his readiness to provide support for the Company. Regardless, different authors have defined succession planning in various ways. For instance, Sambrook (2005) defined succession planning as the attempt to plan for the right number and quality of managers and key-skilled employees to cover retirement, death, serious illness or promotion, and any new positions which may be created in future organisation plans. Hills (2009) also opined that, succession planning is about more than filling the top spots. According to him, it is a smart talent management strategy that can drive retention of talent throughout the organisation and make sure that the organisation has University of Ghana http://ugspace.ug.edu.gh 4 the skills it needs in place, or on hand, to respond to the rapidly shifting sands that make up today’s business environment. Additionally, Armstrong (2003) referred to succession planning as a process whereby an organisation ensures that employees are recruited and constantly developed to fill each key role within the company. But more interestingly, Michelson (2006) expressed that, succession planning requires putting the right people on the bus, getting the wrong people off the bus, and positioning the right people in the right seats. Meanwhile, others such as Conger and Fulmer (2003) and Rothwell (2005) also argued that succession planning is simply having the right people in the right place at the right time. Also, according to Sobol, Harkins and Conley (2007), the typical succession plan includes four phases:  Understand the vision of the company’s future and needs  Analyse and select the best candidate  Prepare a progression plan for the candidate  Transition individuals into new position It is however important to note that, although these basic steps summarize succession planning in four steps, each company’s plan will be different in various degrees of complexities to minimize the impact of transition. Haldeman and Spitaels-Genser (2005) stated that succession plans are like fingerprints - no two are alike, and they leave an impression on everything they touch. Furthermore, for an effective succession planning to materialize there need to be full support from management. One of the biggest challenges of succession planning is the reluctance of top managers to train the junior staff. This is because, those trained are seen as a threat to the very existence of the senior management. As well, the support of the general staff is also needed in the efforts and the activities of succession planning. Staff who are unwilling to be trained to take up new and superior tasks are likely to endanger the efforts and spirit of succession planning in the organisation. University of Ghana http://ugspace.ug.edu.gh 5 Besides, research in succession planning has also developed an abundant number of studies to understand the challenges that organisations (individuals and organisation) have with succession planning among which include career development of employees, intention to stay and in the long run effectiveness of the organisation (Chikumbi, 2011; Kataike, 2013; Miles and Dysart, 2008; Avanesh, 2011; Purcell, 2003). Also, succession planning is a proactive attempt to ensure that leadership in an organisation will be continuous by identifying how these positions will be filled as both planned and unplanned departures occur (Schmalzried & Fallon, 2007). The process of succession planning ensures a smooth continuation of business (Negrea, 2008). The goal is to ascertain and prepare appropriate individuals to fill key positions when people retire, resign, die, transfer, or find new opportunities outside of an organisation. An important point brought forth by the Society for Human Resource Management (SHRM) is that succession planning is about preparation and not pre-selection (Klein & Salk, 2013). It should additionally be noted that succession planning is also about understanding that individuals will not be with an organisation forever. This said and done, succession planning focuses on three main areas according to Ganu and Boateng (2012). First, it addresses the needs of the entity as senior leadership ages and retires. Second, it helps the entity prepare for an unexpected event such as the sudden illness or death of a person in a key leadership role in the organisation. Finally, succession planning ensures that an organisation has the right personnel in place to function at peak efficiency both presently and in the future. Thus, succession planning can serve as a means to take an organisational inventory of human capital and better identify existing or future gaps. Succession planning is both a strategic planning tool to address the issues created by individuals’ departure as well as to bridge the knowledge gap created by a departure (Klein & Salk, 2013). According to Rothwell (2005), succession planning and employee retention University of Ghana http://ugspace.ug.edu.gh 6 form part of HR planning which is concerned with staffing and both have a direct impact on reducing staff turnover or better still enhancing employee retention. Today, retention of top talents in organisations continue to remain a prime concern for most organisations. Employee retention has been defined by Frank and Taylor (2004), as the efforts of the employer to keep its desirable employees and thereby reach company objectives. Furthermore, Griffeth and Hom (2001) also viewed that, employee retention involves taking measures to encourage employees to remain in the organisation for the maximum period of time. Additionally, Nzuve (2010) articulated that, employee retention relates to all management efforts desired to ensure employees do not leave the organisation. Its benefit to business is significant because retaining employees reduces costs spent in hiring and training new employees to substitute lost ones (Nzuve, 2010). Employee retention in the changing and highly competitive business environment is on the decrease in most organisations in the world today (Sullivan, 2004). This has led to changes in mergers and acquisition volumes, workforce demographics, global competition and technology that call for the act of developing a pool of talent to take up leadership responsibilities and push businesses to the next level (Eshiteti, Okaka, Maragi & Akerele, 2013). For these reasons, organisations have therefore deemed it very necessary to put in place programs that will enhance the retention of their employees. A retention strategy is however much more than simply striving to decrease the “turnover percent” that is mostly calculated in HR annual reports. True retention strategy involves identifying top talent and creating attractive career paths to retain these employees (Parry & Rob, 2006). It has therefore become necessary for organisations to project their internal workforce changes, ascertain potential backup candidates, keep track of attrition (resignation, retirements, etc.) and retain the very best of their employees. University of Ghana http://ugspace.ug.edu.gh 7 A retention plan according to Herman (2005) helps with avoiding unwanted loss of human and intellectual capital, thus reducing the cost of employee turnover and improves the workforce stability and engagement. Critical analysis of workforce trends, as stated by Rappaport, Bancroft and Okum (2003) points to an impending shortage of highly-skilled employees who possess the requisite knowledge and ability to perform at high levels, meaning that organisations failing to retain high performers will be left with an understaffed and less qualified workforce that ultimately hinders their ability to remain competitive. Human Resource practitioners, social scientists and organisations have for that matter taken a critical look at how the existence of succession planning in the organisation can enrich employee retention. In fact, Huselid (1995) found that HR policies play a strategic role in employee retention through stimulating skilled labour. Among the HR policies they identified as playing key role in employee retention include succession planning programmes. Also, a 2004 study by Hewitt Associates identified retaining key talent or skills and succession planning as the two most important workforce planning issues. Rosemary- Batt (2002) also acknowledged in her study that a successful succession planning strategy affects employees’ decision to leave or stay in an organisation significantly. Though there is little study looking at the influence of succession planning on employee retention, available ones points to the fact that the presence of succession planning programs in organisations have a significant impact on employee retention (Eshiteti et al., 2013; Jiang & Klein, 2002; Sullivan, 2008; Steel, 1993). Organisations that thrive at recognizing and retaining top-tier talent are, therefore, mostly compensated with a sturdy and varied pool of capable internal candidates prepared to step up when executive or strategic positions are emptied. By executing the necessary due diligence of retention strategies such as succession planning, organisations gain the luxury of appointing the candidate that best fits the current and future strategic direction of the company. University of Ghana http://ugspace.ug.edu.gh 8 While succession planning has been acknowledged to be of great importance to institutions, its effectiveness in terms of goal achievement in organisations can’t be underestimated. Organisational effectiveness has been one of the most extensively researched issues since the early development of organisational theory (Rojas, 2000). It has become more prominent and switched to being a concept from the status of a construct (Henry, 2011). The concept, organisational effectiveness, is related to issues such as the ability of an organisation to access and absorb resources and consequently achieve its goals (Federman, 2006). As well known, the expectation of most employers and perhaps employees is for their organisation to be effective so that they survive from year to year to match their competitors in every possible aspect. One way of meeting such expectation is to put in place good HR policies such as succession planning. Succession planning provides organisations with a method to address issues such as the close to retiring employees and organisational effectiveness (Rothwell, 2005). Organisations with effective leaders tend to innovate, respond to changes in markets and environments, creatively address challenges, and sustain high performance which can significantly lead to a high level of effectiveness (Vardiman, Houghston & Jinkerson, 2006). Highly successful organisations focus on creating a wide- ranging set of valuation and leadership progression practices that support the wide range of talents across the organisation (Groves, 2007; Charan, Drotter & Noel, 2001). A well prepared workforce, as a result of succession planning practices, is often viewed as the foundation for organisational effectiveness and growth (Kim, 2007). Antoncic and Hisrich (2001) for instance, observed four aspects of organisational effectiveness: employee satisfaction, organisational commitment, customer orientation, and financial and growth performance. He observed that these indicators of organisational effectiveness are high when good policies and programs are practiced in organisations. University of Ghana http://ugspace.ug.edu.gh 9 In their study, Zenger and Folkman (2002) affirmed that there is a strong association between planning for the loss of key talent and organisational profitability. Businesses that have identified and trained successors seemed less probable to suffer a period of financial strain while a new employee in a key post becomes conversant with the organisation (Workforce Management, 2005; Barnett & Davis, 2008). Additionally, organisations have come to realise that achieving an effective organisation as well demands the preparation and implementation of programs and policies that specifically focus on employees’ development as these employees form the backbone of the organisation (Avanesh, 2011). One such program that has been advocated for is career development program. In recent years, career progression of employees have gained greater policy attention. In an environment where organisations and individuals need to make more complex career and life choices, career development programs, particularly within formal education and training contexts, have become more important (Kaya & Ceylan, 2014). Career development program have been described as a program utilized by organisations to provide opportunities for their employees towards enhancing their individual growth and development at all levels (Callahan, 2000; Kleiman, 2000; Kaya & Ceylan, 2014). It is intended to promote productive, efficient and effective job performance and to improve the overall level of individual job satisfaction. Career development encompasses various alternatives such as developing abilities, preserving current skills and getting ready for the future ahead of just receiving promotion. Furthermore, career development can be viewed from two perspective: the individual level and the organisation level. The individual level involves the situation where the individual employee invests his or her own resources into the development of his or her career by way of formal education or training. At the organisational level, the organisation through laydown programs and policies invest resources towards sharpening the knowledge, skills University of Ghana http://ugspace.ug.edu.gh 10 and abilities of its employees. This study will however focus career development at the organisational level. Jehanzeb and Bashir (2012) viewed that, a successful career development program can only be achieved when there is full support from the employees, managers and the organisation. According to Lingham (2000), employees decide what they want from their career, what their objective is and managers then identify their knowledge, skills and abilities so that they can train them accordingly and help them in identifying short term and long term goals. Organisations provide them time, benefits and funds according to their requirement, support them for their goals and use the knowledge, skills and abilities of each employee to achieve organisational goals (Nameroff, Garant and Albert, 2004). Also, Ko (2012) expressed that companies invest in career development programs for several motives, for example, developing employee performance, increasing manager improvement, revealing corporate culture for employees, increasing productivity, and helping employees in career improvement. Additionally, in the face of technology and consumer demands that are changing speedily, an update in the employees’ knowledge and skills is necessary. This is to help prevent a situation where the workforce of the organisation becomes highly obsolete. Career development programs, therefore, brings to bare these changes beforehand and provide the achievement of new skills. Kaya and Ceylan (2014) submitted that, if an organisation has an effective career development program in accordance with the employees’ personal expectations, the employee will eventually wish to stay in the organisation. This consistency, according to them, will be reflected in the employees’ performance through time. Likewise, career development is said to be directly linked to the satisfaction of employees, such that, employees feel valued from their employers when given the opportunity to develop their career (O’Herron & Simonsen, 1995; Callahan, 2000; Gerbamn, 2000). Employees who feel satisfied with their job would never want to leave the organisation just University of Ghana http://ugspace.ug.edu.gh 11 as the organisation would also want to retain its golden employees to achieve its objectives and long term corporate goals. It is for reasons such as these that Duggan and Horton (2004) advocates that organisation should have to invest in ongoing employee career development programs to make both employee as well as organisation successful. Against this backdrop, the present study seeks to investigate the subject area of succession planning considering its relationship with employee retention and organisational effectiveness among some selected organisations in Ghana and how career development program moderates these relationships. 1.1 Statement of Problem Employee retention and organisational effectiveness are desirable things which all organisations try to accomplish. Inability to accomplish these aims can be as a result of poor organisational policies and programs (Waleed, 2011), such as succession planning and career development programs which in the long run can affect organisational survival. The implementation of succession planning may be limited in todays’ more flexible and rapidly changing organisations where intricate succession plans become obsolete as soon as they are made. Most organisations put a lot of focus on talent management and development processes forgetting that gifted and determined employees do not like to wait for long to secure management positions (Armstrong, 2003). Currently, majority of firms do not implement succession practices which are meant to help them create “a feeder system” of high prospective employees into management and supervisory positions. This makes them struggle to fill vacancies particularly at the management level and tends to lead into deep discontent among employees leading to poor performance and low retention of talented employees (Eshiteti et al, 2013). University of Ghana http://ugspace.ug.edu.gh 12 Again, the issue of identifying and preparing the next generation of leadership talent is consistently cited by executives and boards as one of their most critical business priorities. Despite this, most organisations consistently rate their succession management or planning practices as less effective (Busine & Watt, 2005). In addition, the current economic climate highlights its importance even more as a strategy for organisational effectiveness and survival, let alone growth. For example, between 40% and 65% of companies around the world have a formal succession planning process in place (Garman & Glawe, 2008) which is to some extent woefully inadequate to say the least given its relevance in organisational development. Succession planning is often viewed as a compliance issue rather than a genuine threat to business (Mammatt & Young, 2007). A major element of good corporate governance is apportioning sufficient resources to address succession planning. The visible succession planning at board and management level is a definite morale boosting factor throughout any organisation. The absence of succession planning programs in organisations comes with a great loss while its presence also comes with benefits both to the organisation and the individual employee. According to Erasmus (2009), leaving succession planning until a key player such as a CEO or chairman has left will result in a dip in confidence from stakeholders and investors and also have serious repercussions on the company’s reputation. Also, the costs and pain associated with not having a succession planning strategy in place is real. For instance, in the absence of proper succession planning programme, organisations go through a stress of scrambling to find replacements when key contributors in the organisation walk out. Further, the absence of it tends to have serious financial impact on the organisation as a result of hiring “fresh hands” (Steel, 1993). Also, according to Enterprise Insight Series (2008), most companies also end up reactively going external (using head-hunters) to substitute a key University of Ghana http://ugspace.ug.edu.gh 13 contributor, which is clearly an expensive mission when fees can range from 20-40% of the placed employees annual salary. According to the Association of State and Territorial Health Officials ASTHO (2008), the presence of succession planning programs in organisations saves the company time and cost. Mammatt and Young (2007) again expressed that, the failure to plan for succession particularly at board level is one of the most frequent causes of the rapid demise of organisations. Furthermore, Denton and Tromp (1991) wrote that formal succession planning does not just contribute to organisational survival but the identification of manpower shortages/needs, promotability indices, development needs, career path planning as well as promotion blocks. To the individual employee, succession planning programs in the organisation prepares them for promotion hence gives them the hope that they can occupy a higher position in the future in the event a vacancy is created. This tend to influence their decision to embark on employee development with their own resource or that of the organisation which goes a long way to benefit the organisation as well. According to Weiss and Kolberg (2003) and Bain (1995) succession planning seeks development opportunities for people and ensures that the right cover is in place and that the right growth plans prepare people in the right way. This in itself serves as a source of motivation for them. The views expressed by Weiss and Kolberg (2003) and Bain (1995) find ample support in a study conducted by Aberdeen Group (2007). In that study, it was revealed that succession planning accelerates the transition of qualified employees from individual contributors to managers and leaders. Additionally, this can enhance their level of commitment to the organisation which tend to influence positively, their decision to remain in the organisation and could actually lead to a reduction in staff turnover (Workforce Management, 2005). In further agreement to other views expressed by other scholars on the essence of succession planning practices, a survey conducted by Non-profit HR Solutions (2013) found that over University of Ghana http://ugspace.ug.edu.gh 14 two-thirds (69%) of non-profit organisations surveyed indicated that they do not have a formal succession plan for senior leadership. When asked what keeps them from developing a succession plan, survey respondents indicated that it simply was not a top priority at the moment for their organisation while others expressed that they believe their organisation is too small to require succession planning. However, in their report, those organisations that have invested in succession planning, realized some key advantages including the ability to understand leadership needs now and in the future, the ability to proactively identify and develop top talent within their organisations, and most importantly, the ability to retain such talent, who without intentional investment on the part of their organisations, might otherwise leave to pursue career opportunities elsewhere including outside of the sector. Besides, although employee retention and organisational effectiveness have been found to significantly relate to succession planning the strength of the relationships established in the previous studies (Eshiteti et al., 2013; Jiang & Klein, 2002; Malhotra K. Raj, 2011) has not been critically investigated. The moderating role of career development program has also not been adequately assessed to determine how it would influence the relationships between succession planning and employee retention and also between succession planning and organisational effectiveness in the study. Even though several studies (Stavrou, Brewster & Charalambous, 2004; Oribabor, 2000) have found career development to be an essential component of employee retention and organisational effectiveness, it is important that we ascertain the strength and direction of these relationships, hence the study. 1.2 Aims and Objectives of Study The main aim of this study is to investigate the relationship between succession planning, employee retention, organisational effectiveness and how career development program moderates the relationship between succession planning and employee retention as well as University of Ghana http://ugspace.ug.edu.gh 15 the relationship between succession planning and organisational effectiveness. Specifically the following objectives are proposed:  To determine the relationships between succession planning, employee retention and organisational effectiveness.  To further examine the moderating role of career development program in the relationship between succession planning and organisational effectiveness.  To additionally establish the moderating role career development program plays in the relationship between succession planning and employee retention. 1.3 Relevance of the Study People serve as the most vital resource for many industries. Their actions, therefore, have the potential to affect the survival of the organisation. As a result, employees leaving an organisation due to reasons such as ill-health, death, retirement, resignation and accidents can cause organisations a great deal. This research will, therefore, enhance theoretical and practical managerial discussion. Theoretically, the study will add to the existing body of knowledge on the general subject of succession planning, employee retention, organisational effectiveness and career development program. This is because it will aid in its further generalization to a collectivistic culture (Eg. Ghana) as Ghana as most studies in this area have been in individualistic cultures like Britain and the United States of America. Additionally, the test of moderation that will be conducted on the relationships between succession planning and employee retention, as well as the test of moderation that will be conducted on the relationships between succession planning organisational effectiveness will ascertain if the strength or otherwise of this relationship will be influenced by the intended moderator, career development program. The intended moderation therefore makes the study very University of Ghana http://ugspace.ug.edu.gh 16 significant, such that, the analysis helps to determine under which conditions this relationship will be strongest or weakest. Furthermore, in the organisational effectiveness literature, there is not a single model of organisational effectiveness to fit all organisations. As stated earlier by Balduck and Buelens (2008), the issue of effectiveness in organisations revolves around four main approaches: the system resource approach, the strategic constituency approach, the internal process approach and the goal approach. These are effective and efficient approaches which are contingent upon the type of situation to arise due to the disagreement in determining what organisational effectiveness entails. This study was, however, limited to goal achievement as a form of organisational effectiveness to give a more direct and focused view. Practically, the study will be of significant value to managers of various organisations, human resource practitioners and individuals in leadership roles or who wish to be in one. For the managerial implications, it will inform management about the potential effect of the succession planning practice in the organisational environment. This is to the extent that, with full knowledge on the consequences of the presence or absence of succession planning programs, management will be reinvigorated to put in place proper succession planning programs and do good monitoring of its progress. This will avoid the pressure put on organisations when employees had to go on retirement, fall sick, die, resign, just to mention a few. This, when taken a critical look at will always make available a pool of talents to make up for such unannounced situations. This is more so given the fact that activities organisations engage in influences the behaviour of the employees which can have a direct implications on the individual employee and the organisation itself in terms of retention and productivity, thus, enhancing organisational effectiveness. University of Ghana http://ugspace.ug.edu.gh 17 For employees the study would help them to understand the dynamics of their own career development and how they would attain a career progression. This is by expounding the consequences of career development on the employee’s wellbeing. University of Ghana http://ugspace.ug.edu.gh 18 CHAPTER TWO LITERATURE REVIEW 2.0 Introduction The current study proposed as indicated from the previous chapter is to find out the relationship between succession planning, employee retention and organisational effectiveness and how career development program moderates the relationship between succession planning and employee retention. It also looked at how career development program moderate the relationship between succession planning and organisational effectiveness. This chapter presents the theoretical framework upon which the study was based on. It further reviews various studies that are related and relevant to the present study. The literature has been reviewed from journals, reference books, working papers and reports. It also presents the rationale for the study, statement of hypotheses, the hypothesized model of the relationships between the various variables and ends with operational definition of terms employed in the study. 2.1 Theoretical Framework The current study proposed as indicated from the previous chapter is to find out the relationship between succession planning, employee retention and organisational effectiveness and how career development moderates these relationships. The chapter presents the theoretical framework upon which the study was based on, specifically, review of the theories on organisational effectiveness, employee retention, career development and succession planning and empirical research essential to the current study. It further reviews various studies that are related and relevant to the present study. The literature has been reviewed from journals, reference books, working papers and reports. It also presents the rationale for the study, statement of hypotheses, the hypothesized model of the relationships University of Ghana http://ugspace.ug.edu.gh 19 between the various variables and ends with operational definition of terms employed in the study. 2.1.1. Requisite Organisation Theory The development of the Requisite Organisational (RO) theory started with Dr. Elliott Jaques in the 1950’s. It has been widely accepted by managers as well as practitioners and researchers over the years (Shepherd and Zacharakis, 2000). It is an all-encompassing systems theory focused on designing, staffing, and managing work in organisations. According to Shepard (2008), RO theory is a science-based management theory that traces organisational dysfunction to poor structure and systems rather than underperforming employees. The theory further explains that, an employee’s prospective aptitude is the key factor in identifying talent within a succession management strategy and is measured in the unit of time-horizon. An individual’s time-horizon is the length of time into the future that he or she can plan and work. According to Abdillea (2013), making plans and carrying them out in the future requires an increasing amount of complex mental processing the further the distance into the future. It follows that ability to handle complexity of mental processing is proportional to potential capability. From this angle, Shepherd and Zacharakis (2000) agreed that one’s ability to plan into the future or time-horizon is the unit by which potential capability is measured. The theory further explains that, when it comes to improving organisational effectiveness and solving human problems such as turnover within organisations the right approach is not to act on the psychology of individual employees in order to improve the organisation, like traditional thinking on organisations dictates (Abdillea, 2013). The right thing to do, according to the theory, is to change systems in the requisite way (the way required by the nature of things), and the self-same individuals will change their behaviour dramatically overnight. With RO theory, therefore, organisations identify critical talent within a succession management strategy by plotting employees’ age University of Ghana http://ugspace.ug.edu.gh 20 and time-horizon on a Potential Progression Data Sheet. This data sheet allows organisations to visualize the career trajectory of employees and select succession candidates accordingly (Bird, Welsch, Astrachan, & Pistrui, 2002). Additionally, the theory as a levels-based approach to organisation design and management creates significant increases in employee satisfaction, customer satisfaction, and financial results (Shepard, 2008). According to Shepard (2008), it involves three main steps: getting the right structure; getting the right people in the right roles; and holding all managers accountable for using the right managerial practices. On the contrary, various authors have embraced an opposing stance on the work of Jaques and the ideas and methodology imbedded in RO theory (MacKinnon 1999; Timo 2001). According to Godfrey (1997), RO is a deeply defective masterpiece that comprises some insights of general application, which risk being buried or discredited by an association with a mass of dogma based on a Taylorist command and control world view and also an obsession that human affairs should be reduced to scientific principles. Furthermore, Timo (2000) believes that, Jaques rejects collective bargaining which has been described as collusive and over time devalues the worth of employee’s labour. Hearn MacKinnon (1999) additionally opined that, RO has lost most of its democratic features. According to him, all that remains is a model based around justifying and upholding managerial prerogative. This notwithstanding, Shepard (2008) held the view that the RO theory is very relevant and solid in helping transform the fortunes of organisation. Shepard in defense of the RO theory listed many first-in-class organisations who have been successful as a result of adopting the RO theory. Among the organisations he listed include Bank of Montreal, Canadian Tire Acceptance Ltd., Imperial Oil, Inco, Inglis, Ontario Hydro, Roche Canada, Suncor, Chapters Indigo, and Tembec, among others. University of Ghana http://ugspace.ug.edu.gh 21 2.1.2. Job Embeddedness Theory Over the past decades, several organisational attachment theories and constructs have been developed to understand employee retention and turnover, such as job satisfaction (Lee & Way, 2010; Kim & Jogaratnam, 2010), perceived organisational support (Cho, Johanson & Guchait, 2009), and leader-member exchange (Jansson & Van Yperen, 2004; Wayne, Shore, Bommer & Tetrick, 2002). Nevertheless, a high degree of employee turnover is still considered one of the biggest challenges facing both public and private sectors. Much research on employee retention has centred on understanding the varied reasons behind employees’ decisions to leave organisations, as well as the processes by which people make such choices. For instance, Porter and Steers (1973) cited five dimensions from their model explaining why employees stay. These include extrinsic rewards (e.g. pay, benefits); advancement opportunities which are related to staying because employees are sensitive to receiving fair rewards for their efforts and thus may leave when opportunities to receive greater rewards exist elsewhere; constituent attachments, in the form of effective supervision and positive peer group relations; longer tenure with the organisation. By understanding why people leave, organisations can also gain a better idea of why people stay and can learn how to influence these decisions. Some recent studies have examined the ways in which employees become embedded in their jobs. To further contribute to epistemology of voluntary turnover, Mitchell, Holtom, Lee, Sablynski and Erez, (2001) developed the construct called Job Embeddedness, which measures the extent to which employees feel stuck, connected, attached or embedded in their jobs. Job Embeddedness encompasses the complex nature of modern lives and a broad array of influences on retention, by including both on-the-job and off-the-job dimensions, in organisational and community domains. Mitchell et al., (2001) developed a 2 x 3 matrix of these dimensions namely; links, fit and sacrifice. These dimensions apply to the University of Ghana http://ugspace.ug.edu.gh 22 organisational (on-the-job) and community (off-the-job) perspectives (Ng and Feldman, 2010; Lee et al. 2004; Tanova & Holtom 2008; Holtom & Inderrieden, 2006). In the present study, however, the examination will be limited to the organisational dimension. This is because many researchers have found that the organisational dimension better predicts employee retention than the community dimension does (Allen 2006; Halbesleben & Wheeler 2008; Lee, Mitchell, Sablynski, Burton, & Holtom, 2004). Mitchell et al., argue that the stronger the links, fit and sacrifice are, the more an employee will feel professionally and personally embedded in their organisation. According to Mitchell et al., (2001), the Links are connections with other people, groups, or organisations. Examples include relationships with co-workers, work groups, superiors so forth. Employees with numerous links to others in their organisation and community are more embedded and would find it more difficult to leave. The Fit on the other hand, represents the extent to which employees see themselves as compatible with their job, organisation, and community. Sacrifice represents forms of value a person would have to give up if he or she left a job (i.e. to break the links and fit). Sacrifices include financial rewards based on tenure, a positive work environment, promotional opportunities, career development opportunities, and so forth. Employees who would have to sacrifice more are more embedded and therefore more likely to stay. Recent studies have validated the Job Embeddedness construct and further explored its application in conjunction with traditional attachment theories to factors influencing intention to stay (Cuningham, Fink & Sagas, 2005; Holtom & Inderrieden, 2006; Mitchell & Lee, 2001). Mitchell et al. (2001) tested the embeddedness construct among employees in the grocery and hospital industries in the U.S. The analysis supports that Job Embeddedness scale is a significant predictor of employee retention, beyond traditional University of Ghana http://ugspace.ug.edu.gh 23 variables of job satisfaction, organisational commitment, perceived alternatives and job search. 2.1.3. Goal Theory Mostly, it is unclear what scholars mean when they refer to organisational effectiveness and this has resulted in ambiguities in interpreting the results of their work (Cameron, 1978). Regrettably, it has made the study of organisational effectiveness difficult given the fact that the construct has been defined from different angles. Among the models include the system resource model, strategic-constituency model, internal processes model and the goal model. Seashore and Yuchtman (1967) for instance viewed effectiveness as the ability of the organisation to exploit the environment in the acquisition of critical resources whiles Price (1968), defined effectiveness as the degree of goal achievement. The system resource approach explains organisational effectiveness from the point of view of the ability to obtain necessary resources from the environments outside the organisation and can be effective if a clear relation exists between the resources which an organisation receives and the goods or services it produces (Schermerhorn, Hunt, Osborn & Osborn, 2004). It looks at various variables such as: relations with the environment to guarantee continued delivery of inputs and favourable acceptance of outputs; flexibility of response to environmental modifications; the efficacy with which the organisation transforms inputs to outputs; precision of internal communications, as well as, extent of conflicts among groups (Robbins, 1990). There is however a problem with how “means” are measured with regards to the system resource approach. For instance, a higher amount of obtained resources is not going to promise effective usage. In addition, it is tough to define an ideal degree of resource acquisition across distinct organizations (Robbins, 1990). Robbins (1990) further criticizes that measuring specific goals may be easy compared with trying to measure process University of Ghana http://ugspace.ug.edu.gh 24 variables such as “precision of internal communications”. Thus, the development of valid and reliable measures may not be possible (Robbins, 1990). The strategic constituency approach on the other hand, deals with the effect of the organisation on the main stakeholders and their interests such that, effectiveness here refers to the minimal satisfaction of all the stakeholders, also referred to as strategic constituency of the organisation (Schermerhorn et. al., 2004) in its environment. Strategic constituency involves all the individuals that are somehow connected to the organisation. These individuals may have different roles such as the users of the services or products of the organisation, the resource providers, and the facilitators of the organisation’s output, the main supporters and the dependents of the organisation (Cameron, 1978). These constituents have different degrees of power, each trying to satisfy its demands. According to Robbin (1990) however, this approach seeks to satisfy only those in the environment who can threaten the organisation's survival. Effectiveness here is therefore looked at in terms of the degree to which the needs and expectations of the strategic constituencies are met by the organisation. Additionally the organisation is assumed to pursue specific goals which are representations of particular interest groups that control the resources necessary for the organisation to survive. Therefore, as the environment rapidly changes, what was a critical goal today may not be so tomorrow (Cameron & Quinn, 1981). Measuring goals/effectiveness from this perspective therefore becomes difficult problematic. The reason being that different constituents are likely to rate an organisation in different ways. Thus, separate constituents may develop vastly different ratings of an organisation’s effectiveness. Furthermore, the internal process approach pays attention to the transformation process in the organisation and the extent to which the resources are officially used to give services or produce goods (Schermerhorn et. al., 2004). Therefore, by effectiveness, it is meant that the University of Ghana http://ugspace.ug.edu.gh 25 organisation is internally healthy and efficient and the internal processes and procedures in that place are quite well-oiled such that, there is no trace of stress and strain. Its limitation however makes it unfavorable in the measure of organisational effectiveness in this study. This is because with the internal process approach, total output and the organization’s relationship with the external environment are not evaluated (Robbin, 1990). Also, evaluations of internal health and functioning are often subjective, because many aspects of inputs and internal processes are not quantifiable (Bisig, Tresch & Seiler, 2007). The goal approach is therefore adopted in measuring organisational effectiveness in this study. It is the first extensively used organisational effectiveness approach. According to this approach, organisational effectiveness relates to the accomplishment of organisational goals (Scott, 1977). This is consistent with the position taken by the researcher, in that, this theory measures the effectiveness of an organisation in terms of goal accomplishment or realization (Pratt & Eitzen, 1989). The goal focus of the goal approach is on the output, to figure out the essential operating objectives like profit, innovation and finally product quality (Schermerhorn et al., 2004). Consequently, an organisation's effectiveness is appraised in terms of the accomplishment of ends rather than means such as performance. Typical goal-attainment criteria include profit, customer satisfaction, growth and productivity maximisation. Every organisation exists for a purpose and organisations that accomplish its mission are said to be effective organisations. The goal attainment theory of organisational effectiveness has been acknowledged as the most logical theory to study organisational effectiveness (Chelladurai & Haggerty, 1991). Goal accomplishment is typical of every organisation irrespective of its sector of operation. Nevertheless, the use of goals implies other assumptions that must be valid if goal accomplishment is to be a viable measure. One of such assumptions include the point that there should be a general agreement on the specific goals and the people involved should University of Ghana http://ugspace.ug.edu.gh 26 feel committed to fulfilling them. The next assumption is that the number of goals is limited and achieving them requires certain indispensable resources (Robbins, 2003). Idiosyncratically it is assumed that an organisation should have: ultimate goals; have identifiable and defined goals; manageable goals; a general consensus or agreement on its goals; and the ability to measure its goals (Love & Skitmore, 1996). Though relevant in organisational effectiveness studies, this theory is not without some limitations. One of such limitation is when organisational goals are unclear, unstable and conflicting, it becomes difficult to assess organisational effectiveness using the goal criteria (Chelladurai & Haggerty, 1991). Also, according to scholars, organisations have several goals some of which may conflict, and that organisational goal especially short-time operative goals may shift over time (Weese, 1997; Pratt & Eitzen, 1989). Seashore and Yutchman (1967) has criticized that, the goal model may be appropriate for describing organisational constraints but of limited value when attempting to produce evaluative conclusions about the organisation. These notwithstanding, the goal attainment theory still remains convenient as a measure of organisational effectiveness. Banerjee (1995) outlined several reasons why the goal attainment model is convenient as a measure of organisational effectiveness. Among the reasons include: 1. It is the most natural and logical approach as organisations are brought into being to achieve certain objectives. They are run, managed, improved and expanded for the same purpose too. 2. The very purpose of decision-making, which constitutes the core of management is related to goals. The causes of action are determined by the nature of goals. Strategic planning which is now of great importance to all progressive organisations is directed to goal attainment. University of Ghana http://ugspace.ug.edu.gh 27 3. Goals are generally well defined and well understood by members of the organisation. They are mostly measurable, too. So the goal attainment model is the most realistic. It frees the task of appraisal from the biases of the appraiser. The researcher therefore decided on the use of the goal attainment model in this study for reasons such as those espoused by Banerjee (1995) and other reasons as stated earlier. 2.2 Review of Related Studies Apart from the theories expounded above, this section deliberates on the various studies and findings that best supported the researcher in explaining the likely effects of the variables considered for this study as well as helping formulate hypotheses for the study. Succession planning and employee retention Employee retention in this fluctuating and extremely competitive business setting is on the decrease in most organisations in the world today as a result of factors such as changes in workforce demographics, global competition, mergers and acquisition volumes, and technology that call for the act of developing a pool of talent to take up leadership responsibilities and drive the businesses to the next and appropriate destination (Siebert & Nikolay, 2009). Various organisations do not have any form of formal preparation drivers to create “a fill-in scheme” of high potential employees into management and supervision positions. With the unavailability of a “fill-in scheme” like succession planning, some firms struggle to fill vacancies particularly at the management level and even supervision level. This situation tends to lead into profound displeasure among employees and the result is decreased performance and retention rates among high performers. Given this problem, research on determinants of turnover over the years has increased (Jiang & Klein, 2002). Nevertheless, not much is known about employee retention in the context of succession University of Ghana http://ugspace.ug.edu.gh 28 planning in Ghana particularly. However, a few studies have established a relationship between employee retention and succession planning. In the survey conducted by Bernthal and Wellins (2001), they looked at “Retaining talent: A benchmarking study”. The survey involved 118 organisations comprising 2,766 leaders and 2,969 associates from these organisations. In their survey, 67% were multinationals and majority (35%) were involved in manufacturing as the remaining 65 percent were involved in agriculture, mining, transportation, wholesale trade, retail trade, finance, services, government and multiple industries. A majority (57%) of participating organisations were located in the United States and the rest in Australia, Asia, Europe and Latin America. The survey found that two-third of employees indicated that they would rather grow inside their present organisation than leave. The study also revealed that the ultimate reason for employees to leave an organisation is that they are not being developed and/or they do not have meaningful work. Therefore, this is evident that effective succession planning improves the organisation’s chances of retaining key personnel according to the survey. Looking at their survey, it is clear that in an attempt to establish a relationship between succession planning and employee retention (which relationship was positive in their survey), Africa was “selectively” excluded from their study as majority of its respondents were based in the United States. The current researcher will therefore like to examine if a similar finding will be found in Ghana, an African country. Hence, the current study will look at the relationship between succession planning and employee retention among some selected institutions in Ghana. Additionally, Chew (2005) did a comparative study on achieving organisational prosperity through employee motivation and retention at Malaysian Institutions. He used five leading companies of the Malaysian personal care industry that have distinguished themselves in world markets. His respondents include senior managers of the five companies. His study University of Ghana http://ugspace.ug.edu.gh 29 found that while focus on competitive pay packages to attract and retain talented cadres is clearly effective in manifesting job motivation, complimentary strategic HR practices are profoundly important in reducing staff turnover. The results also showed that there is a growing recognition of the importance of the employee-organisational link. This institutional feature according to Chew (2005) is facilitated by a common set of HRM activities to achieve organisational prosperity. Each HR activity represents the various creative approaches undertaken by the study companies to motivate and retain talented cadres. Among the HRM activities he identified are recruitment and selection, salary and compensation, fringe benefits, training and development; and performance appraisal (PA) systems, as well as promotion and career advancement. Chew’s (2005) study was limited to the private sector, specifically, personal care industry. Hence, the finding can only be said to be characteristic of the personal care industry in the private sector. This limitation makes it difficult to generalize the findings of his study to other sectors even in the private sector not to mention those in the public sector which was not considered at all. The current study will however consider both public and private sector including both manufacturing and service industries to make the finding more generalized. Also, whiles Chew (2005) found that HR practices is linked to reducing staff turnover hence increased retention, his study did not factor in succession planning, also an HR practice, and how it also affects employee retention. This study for that matter will contribute to the work of Chew (2005) by looking at how succession planning also relates to employee retention whiles also examining how career development (training and development) moderates the relationship. Furthermore, the Aberdeen Group (2005) continuing with its study of workforce management and the business processes involved in the employee lifecycle conducted a survey looking at retention and succession planning in the corporate workplace. It used University of Ghana http://ugspace.ug.edu.gh 30 senior executives in human capital management across North America as its population with a total of 170 HR professionals and executives who are members of the Aberdeen Group and Human Capital Institute’s global online communities, as well as interviews with executives in human capital management across North America. The survey was a mixed method in nature. In the survey, they found that a clear correlation exists between executive retention and companies with formalized retention and succession programs. More specifically, the survey revealed that strong majority of companies that reported 1% to 5% average turnover rates had a formal retention (89%) and succession program respectively (84%). According to them, less than 5% turnover of mid-level managers is attained when formal succession plans are in place in the corporation. Their survey also established that 90% of organisations they studied plan to position succession planning as a key retention strategy. Also, Chikumbi (2011) investigated talent management and staff retention at the bank of Zambia using 40 middle management as their respondents. He concluded from his study that, employees felt motivated by realistic objective setting, continuous learning opportunities, valued ideas and encouraging creativity which largely contributed to their retention. The study more interestingly revealed that 22.5% of the respondents agree that talent management has a high priority in the Bank of Zambia (BoZ) strategic plan, 17% agree that BoZ regularly analyses talent needs, 22.5% agree that BoZ has a clear talent management strategy, 7.5% agree that BoZ has a succession plan for all management posts, 22.5% agree that the BoZ web site has supportive information to create interest with qualified candidates whiles 57.5% of the respondents agree that BoZ primarily sources talent from outside the organisation. This study has limited external validity because all the participants of the study were from one institution and they are all middle managers. Hence, the finding can be a characteristic of the middle management of a single bank. The current University of Ghana http://ugspace.ug.edu.gh 31 study however involved employees from diverse work roles in different departments of the selected institutions. According Greiner, Cummings & Bhambri (2002), bringing in an outsider for a middle management position, instead of cultivating an insider, could lead to more employee turnover and lower morale. They explained that building talent within a firm might be a better choice than recruiting outsider for management positions because outside successions are usually accompanied by frustration and resistance from inside executives (Greiner, Cummings & Bhambri, 2002). Further, outside successions also lead to a higher level of senior executive turnover than inside successions, according to Friedman & Saul (1991) Additionally, Eshiteti et al. (2013) conducted a qualitative study to establish the effects of succession planning programs on staff retention in the sugar companies of Western Province, Kenya. The study respondents consisted of 90 management staff members of three sugar companies. The respondents were assessed with a semi-structured questionnaire constituting of a five - point Likert scale. Using descriptive statistics to analyse their data, they established that more employees had high job satisfaction because of going through the succession planning process with the hope of being next in line of management. This according to them had a positive effect on the retention of staff in the sugar firm. The companies they chose for their study were however private companies and one cannot tell if their result will be same when done in a public institution. Also among all the departments in the organisation, they “selectively” chose only six departments. The current study will conversely include the public sector institutions to make the findings more generalized and also include all departments in the various institutions to be involved in the study. Furthermore, Kataike (2013) in a recent study examined the relationship between talent management and employee retention in commercial banks in Kenya. Her target population included the 43 Commercial Banks operating in Kenya. A total of 25 human resource University of Ghana http://ugspace.ug.edu.gh 32 officers filled and returned the questionnaires out of the 43 distributed. Using Pearson’s correlation analysis, it was found that there is a strong positive relationship between talent management and employee retention. He therefore, recommended that management must give more attention to talented staff in order to retain their services in the long term. Tunje (2014) in his study identified talent management as a form of succession planning practice. But just as Kataike (2013) has found a positive relationship between talent management and employee retention, this study will go a step further to find the direct relationship between succession planning and employee retention. In the study of Kataike (2013), the sample size was very small. Tabachnick and Fidell (2007) made it clear that, for the purpose of generalization, the sample size should not be less than 58 as expressed in their formula, N>50+8M where N is the sample size and M the number of independent variables used. However, Kataike’s study fell short of Tabachnick and Fidell’s sample size requirement. This study will use a much bigger sample size exceeding the limited requirement of Tabachnick and Fidell (2007). Also, this study will include all other employees from other departments without limiting it to only one department or one category of employees. This is intended to make the findings for this study more generalised. More recently, another study by Tunje (2014) looked at succession planning practices and employee retention in large media houses in Kenya. Her study adopted a descriptive survey design. Primary data for her study was obtained using self-administered semi structured questionnaire which was the main data collection instrument. The questionnaire was administered in two ways, drop and pick and electronic mail for those who were far. The study targeted 3,000 permanent employees working in the media houses. She analysed the data using descriptive statistics and analysis of variances. From the study, the findings reveal that there is a positive relationship between succession planning practices and employee retention. Additionally, the findings suggest that succession planning practices are evidently University of Ghana http://ugspace.ug.edu.gh 33 implemented in the media houses though only for key positions and not all positions. The findings further revealed that there are no clear career paths and if they exist, they are too narrow hence employees decision to leave not only in search of better benefits and pay but for career progression. In using e-mail in administering the question, it can possibly lead to less reliable data as the researcher was far away clarify and probe questions where necessary. Also her work was limited to only the media, specifically the large ones. This study will contrary, include other institutions from different sectors to see if the findings will be in line with that of Tunje (2014) and also to make the findings more generalized. This study will further go the extra mile to examine how career development tends to moderate the relationship between succession planning and employee retention. Likewise, M’Cathy (2013) opined that companies that do it right as measured by bottom- line results seem to follow all if not most of the following ten best practices in implementation of succession planning: commitment and involvement of the CEO and Board, regular talent reviews, identifying viable successors for key positions, taking a “pipeline” approach to development, holding the executive team accountable, aligning the succession plan with business strategy, managing the irrational, political, and emotional dynamics of succession, assessing performance of potential successors, integrating succession planning with performance management, recruitment, selection, development and rewards and making a serious commitment to development in terms of time and resources. In this regard, the simplest way to retain employees is to increase satisfaction levels of employees (Denisi and Griffin, 2008) through succession planning. Succession planning is a necessary component of a company’s effort to improve quality, meet challenges of global competition, social change and incorporate technology advances. Rothwell (2005) examined succession planning as a staffing responsibility that relates to promotions, terminations and retirement. Organisations investment in their staff and University of Ghana http://ugspace.ug.edu.gh 34 improvement through succession planning programs contributes to a pool of talent, which benefits the whole organisation through retention. In other words, succession planning has a direct impact on reducing staff turnover. Succession planning and organisational effectiveness The ultimate goal of succession planning is to improve organisational performance and for that matter ensure continuity and organisational effectiveness. In the words of Charan, Drotter and Noel (2001), succession planning is seen as management pipeline that accelerates management and for that matter organisational effectiveness over a period of time. Additionally, Huang (2001) studied succession management systems and human resource outcomes. The purpose of his study was to investigate whether firms with a more sophisticated succession plan or practice achieved more favourable human resource outcomes than those with less sophisticated plans. The participants in this research were human resource managers of 100 U.S. owned companies, 150 Japanese-owned companies, and 400 local companies in Taiwan. The companies were randomly selected. Huang developed a questionnaire that included 10 factors for determining the degree of sophistication of succession planning and a 5-point indicator of human resource outcome, which included staff morale, organisational climate, staff turnover rate, organisational commitment, and employee satisfaction. The study concludes that there is no empirical evidence to support that firms with succession management system have better HR outcomes than those who do not. The data collected for Huang (2001)’s study also suggests that the mere implementation of a succession management plan does not make a significant difference to reported business outcomes. However, he argued that there is an important relationship between the level of sophistication with which succession plans were carried out and human resource outcomes. In addition, he found out that the credibility of succession University of Ghana http://ugspace.ug.edu.gh 35 planning affected the performance of human resources. The implication, according to them is that, by adopting a succession plan a firm does not automatically improve its HR performance; that to be successful, succession planners must devote considerable attention to design, commitment of top-level managers, the credibility of planning staff, and effective resource allocation. The limitation of the reported research was that no cause-and-effect relationships or direction of casualty of variables existed. Also, a limitation arose from using only one informant to report organisation-level construct. Further, it can be said that the HR managers will be biased in determining the level of sophistication of their succession plan to make their organisation look good. It was therefore necessary to have included other levels of employee to make the response more reflective of the firms. This limitation makes generalization of their finding very difficult. The current study however involved employees from diverse work roles in different departments of different selected institutions in Ghana specifically. Furthermore, Michaels, Handfield-Jones and Axelrod (2001) released the now celebrated book, “The War for Talent”, in which they argued that during both good and bad economic times talent is critical to the success of an organisation. Their study is fortified by five years of in-depth research on how companies manage leadership talent including surveys of 13,000 executives at more than 120 companies and case studies of 27 leading companies. Through the extensive research involving these hundreds of companies and thousands of executives, they concluded that companies that do a better job of attracting, developing, and retaining highly talented managers had higher returns for shareholders. Also, Rowe, Cannella, Rankin and Gorman (2005) confirmed the relationship between succession and performance. Their study examined the impact of leader succession on organisational performance. They used organisational learning theory and the concept of time compression diseconomies to frame their conceptual arguments. Their sample include University of Ghana http://ugspace.ug.edu.gh 36 the major league hockey teams from the National Hockey League (NHL) observed continually from the 1942–1943 season through the 2001–2002 season, thus, over a period of 60 years. In their study, these researchers found that leader succession does impact an organisation’s performance. Also, they noted that in order to maximize the lasting benefits of succession, both the timing of succession execution and the duration of the successor’s organisational learning are crucial. In fact, the longer the successor learns and institutionalizes knowledge and skills the better the performance of the organisation (Rowe et al., 2005). Their study and its associated findings only addressed leader succession in the context of NHL teams. Therefore, the generalizability to the leadership of large corporations and other industrial organisations is limited. The current study therefore included different corporations from different sectors so that generalizability can be enhanced. First, Miles and Dysart (2008) in their study identified that succession planning is an activity that most companies would be quick to say it is in place. However, and unfortunately so, they identified that succession planning efforts are all too often woefully underdeveloped, unevenly executed, and sometimes simply ignored which contributes negatively to performance. The level of seriousness companies give to the practice of succession planning has equally, to some extent, undermined its level of performance as most literature on succession planning have clearly specified. For instance, Khumalo and Harris (2008) reported that 67% of companies do not have a succession plan and 45% have no executive development plan in place which has created crises in terms of organisational success. They further argued that the crisis could be alleviated by implementing succession training programmes. Organisations with effective leaders tend to innovate, respond to changes in markets and environments, creatively address challenges, and sustain high performance (Vardiman, Houghston & Jinkerson, 2006) including improved financial performance leading to a high organisational effectiveness. University of Ghana http://ugspace.ug.edu.gh 37 In another comprehensive industry study, Lamoureux, Campbell and Smith (2009) set out to determine how succession planning and management (when done well) helps improve business growth performance. Their study was a quantitative survey involving 345 respondents including 25 senior business leaders, 220 talent managers and 100 business leaders. The leaders provided their perceptions on the overall effectiveness of their companies’ succession management strategies. The survey found out that good succession management is clearly correlated to business success and by effect organisational effectiveness. Also, Avanesh (2011) in his study revealed that, there is a positive relationship between succession planning and organisational effectiveness through performance. Using a sample size of 50 respondents in IT consultancy groups and IT product groups, Avanesh (2011) measured the process of succession planning and its impact on organisational performance in Indian IT sector and made specific recommendations for improving the quality of succession planning and organisational performance. The study found that the overall mean percentage of Succession Planning Performance of IT Consultancy firms (72.4%) is found to be higher than that of IT Product/ Research firms (70.4%). Organisational Performance of IT Consultancy firms (79.6%) are higher than that of the IT Product/ Research firms (76.7%). The relationship between practice of succession planning and organisational performance was found to be positive in IT Consultancy Groups and IT Product/Research Groups. Meanwhile, Maalu, McCormick, K’Obonyo and Machuki (2013) also researched on the succession strategy and performance of small and medium family businesses in Nairobi, Kenya. Their data was obtained from 249 SMEs through a structured questionnaire and interviews. Their research aimed at determining the nature of business succession strategies, the factors that influence succession and relationship between succession and firm University of Ghana http://ugspace.ug.edu.gh 38 performance among the family owned SMEs in Nairobi. The results indicate that family owned SMEs in Nairobi did not explicitly document their succession strategy. However contrary to expectations regarding the nature of succession, it was evident that they make significant unwritten plans for trans-generational succession. While the study did not indicate a strong and significant relationship between succession and firm performance, it emerged from the case studies that firms that went through smooth succession also recorded significant growth post transition. The sampling frame in their study was limited to family owned SMEs in Nairobi which were mostly private organisations. Therefore, there is limitation on the extent to which their results could be generalized across non-family owned businesses and public castor organisations. The current study considered public sector institutions as well in order to generalise and enhance their findings. Additionally, Kamande and Gachunga (2014) did a case study to evaluate the influence of Human Resource Planning on the performance of International Organisation for Migration in Kenya. The components of human resource planning in their study included employee resourcing, career planning, succession planning and human resource development. The population for the study was 87 senior employees drawn from the various units at the International Organisation for Migration in Regional office for Eastern and Southern Africa, Kenya and Somali Missions. The sample size for the study was 48 respondents with a response rate of 85.4%. The findings of the study showed that human resource planning: employee resourcing, career planning, succession planning and human resource development were statistically significant in influencing performance. Specifically, the study concludes that succession planning influences employees productivity positively. It continued to conclude that succession planning has protected human resource needs and guaranteed stability and achievement of organisations goals. From their study, even though the response rate is good, the sample size is quite small. Also the study was limited to only University of Ghana http://ugspace.ug.edu.gh 39 senior employees neglecting the non-senior ones whose contribution will add significantly to the result. These limits the study from being generalized. The current study will include a bigger sample size whiles it also considers employees with different job roles from departments and with different organisations from different sectors as well. This will further make the findings more generalized. According to Cappelli and Keller (2014), the loss of an individual employee in an important role results in an upsurge of undesirable repercussions for a team or organisation. These ‘strategic positions’ are the important roles defined as jobs in which investments in selection, evaluation, and development have the greatest potential to generate a significant return through increasing revenue or decreasing costs (Cappelli & Keller, 2014). Cappelli and Keller (2014) therefore expressed that putting in place a succession planning program has a positive effect on the effectiveness of an organisation. However, measurement of what constitute effectiveness has never been agreed on. This current study however measured organisational e