Performance Management and Succession Planning as Drivers of the Performance of Pharmaceutical Manufacturing Firms in South-East, Nigeria

Abstract

This study examined how performance management and succession planning influence the performance of pharmaceutical manufacturing firms in South-East Nigeria. The problem it addressed was that many pharmaceutical firm managers do not know how these two human resource planning practices relate to organisational performance, so that training is not synchronised with performance goals, preparation for leadership change is poor and operational performance suffers. The specific objectives were to investigate the extent to which performance management influences, and to assess the extent to which succession planning influences, the performance of pharmaceutical manufacturing firms in the zone. The study adopted a descriptive survey design and was anchored on human capital theory and the resource-based view. Twenty pharmaceutical firms certified by the National Agency for Food and Drug Administration and Control (NAFDAC), four from each of the five South-East states, were studied. From a population of 2,176 employees, a sample of 471 was determined, and data were collected with a structured five-point Likert questionnaire validated by experts and having a test-retest reliability coefficient of 0.82. A total of 470 copies (99.79%) were returned and analysed using descriptive statistics and simple regression in SPSS Version 23 at the 5% level of significance. Results showed that performance management (R = 0.921, t = 44.738, p < 0.001) and succession planning (R = 0.963, t = 68.043, p < 0.001) each have a significant positive relationship with the performance of the firms, with succession planning explaining 92.8% of the variation in performance. The study concluded that firms which manage performance systematically and prepare successors deliberately perform better. It recommended, among others, that firms adopt behavioural assessment, rating scales, coaching and 360-degree feedback in their performance management systems, and prepare a talent pipeline for critical positions at all levels of the workforce.