Since the “official” beginning of the most recent recession in January 2008 through June 2012, the U.S. Department of Labor estimated that a total of 7.6 million jobs disappeared from the U.S. economy. During this period, most companies froze hiring and, in many cases, wages. Bonus payments were materially below pre-recession levels. Positions vacated by retirement, re-structuring, layoffs and other personnel losses were not replaced. Rather, existing employees were asked to perform the responsibilities of the lost incumbents – “to do more with less.” Not only did this process lead to increased on-the-job stress, but formerly traditional positions were combined into hybrid combinations of duties.

During the recession, there was little focus on retention or motivation. For the most part, there was nowhere for employees to go. As we begin to emerge from the recent recession, a prevailing concern with employee retention and career progression planning has reemerged.

This whitepaper addresses, briefly, the subject of career progression planning.

What is Career Progression Planning?

Career progression planning has a number of names, e.g., succession planning; management development; career ladders, etc. Each has unique elements, but all have the same core focus. In simple terms, career succession planning is an important element of a company’s human resources strategy for achieving its future growth and success. The underlying mechanism of all such plans is the orderly movement of employees, either vertically to positions of greater responsibility or horizontally to positions encompassing a breadth of company functions.

At its core, a well administered career progression plan, regardless of the prevailing economic climate, is an effective means to help retain and continuously to motivate key employees. Many multi-year comprehensive career progression plans serve as the primary “farm team” for the company’s top management. More than one-half of General Electric’s top executives were participants in GE’s Leadership Development Program. Alumni of this program now are top executives in many important companies throughout the world.

Participation in a career progression plan is not all inclusive. It is a program for developing special talent … even stars.

A well designed career succession plan also can serve as a means to avoid promoting employees to positions for which they are not qualified or ideally suited. That is, avoiding promoting an excellent systems engineer to a managerial position for which she has few if any qualifications. Most such promotions are an easy, but not effective way to increase the employee’s compensation or to enable the employee to participate in a management bonus plan or a managerial stock program. There are other, more cost effective ways!

A well regarded career progression plan also can be of significant assistance in recruiting key talent to the company.

Two Fundamental Models of Career Progression Planning

While career progression plans often focus upon a vertical progression path, many career progression plans, particularly in large companies committed to long-term employee development, are horizontal in form.

A vertical career progression plan defines steps from entry to highest levels of one or more job families. Typically, vertical plans are applied to engineering, technical, professional or vocational groupings of jobs. A vocational career progression model might apply to installation technicians who progress from a position entailing basic installations to one involving trouble shooting, intensive customer interaction and material technical knowledge. Career progression ladders for engineers, scientists, technical and professional positions are well known and in place in numerous companies.

Horizontal career progression plans, typically, are found in large companies with more-or-less traditional, pyramidal organizations. These programs entail rotation for defined periods through various company functions, e.g., operations; engineering; production; finance; human resources. The intent of such plans is to retain key employees, but also to “feed” the talent pool of the organization. One of the best known horizontal career progression programs is General Electric’s Leadership Program. Ranging from just-from-college entry level positions to highly specialized postdoctoral employees, this career progression plan spans almost all of GE’s lines of business, e.g., turbines; electronics; as well as functional areas, e.g., IT; finance; human resources.

Clearly, not all companies concerned about career progression have the resources of such large companies as General Electric. Further, smaller companies have far less static organization that must constantly adapt to changing circumstances. However, even small companies can create and operate effective career progression plans by focusing carefully upon key or scarce resources and using the collective experience of the company’s executive and management resources. In such companies, a tuition reimbursement plan might substitute for General Electric’s famous “Crotonville” corporate business school.

What Is Needed?

The most critical and necessary element of a career progression plan is the active participation and support of the company’s top management.  Without such active participation and support, almost any career succession plan will falter or, worse, never get off the ground.

Management support, at a minimum, needs to include:

  1. Active participation by company management in planning the program, selecting participants, evaluating program participants, ensuring appropriate job assignments and rotations.  Participation as a senior mentor is highly effective providing plan participants with face-to-face interaction with the company’s top management.
  2. Adequate funding for the career succession plan whether in the form of adequate human resources to support the plan, tuition reimbursement, on-site speakers and trainers.  If the career succession plan is simply tossed over the fence to an already overworked Human Resources team, it certainly will fail.
  3. Active participation in defining the jobs or job families that comprise the progressions of positions that comprise the plan.  These definitions need to include a clear definition of performance standards, regular measurement and vigilance over plan participants’ performance and progress, regular evaluations of the program, overall.  In addition to a focus on job content, job definition should focus on leadership, preparedness and anticipation of and responsiveness to change.
  4. Ensuring that the career progression program does not wither or is not resource starved or superseded by other priorities is absolutely critical to the success of the plan.

For any family of jobs, performance standards at each level need to be carefully defined, applied, and communicated to plan participants.  As appropriate, the compensation of participants needs to be adjusted to reflect the responsibilities of the positions to which they are assigned.  (Some companies pay a premium to the participants in their career progression program.)  As appropriate, short-term incentive awards can be used to recognize participants’ outstanding performance.  Most importantly, the career progression plan should not be a secret.  It should be highlighted in recruiting information, regularly reported on in the company’s intranet and other internal communications and celebrated by top management.

Typically, administration of a career progression plan is assigned to Human Resources.  Direction of the program should be at the highest level of the Human Resources organization.  The executive in charge of the plan should be a key contributor to the company’s strategic planning activities to ensure that the career progression plan supports achievements of the company strategic plan … short- and long-term.

How to Make a Career Progression Plan Work?

A career progression plan should be viewed as a partnership among the company’s top management, the internal company resources administering the plan and the plan participants.  Many companies create career progression “classes” and encourage ongoing relationships and identification with fellow participants.

The plan should have both on-the-job as well as training and development elements.  Larger companies have the scale to bring the training and development elements in-house using either internal or third-party resources.  Smaller companies will need to use local education resources, contracted third-parties and top management mentors.  Like the program itself, these resources should be evaluated at the highest management levels of the company for their relevance and support of the company’s strategic plan.

Above all else, the company’s career progression plan should be recognized as “special” and accorded appropriate recognition.

To discuss your company’s career progression planning, please contact Lisa Dyakovski, Director, Consulting at the Croner Company, at (415) 485-5526 or lisa@croner.biz.