To tell or not to tell: That is the question facing many employers as they develop succession planning programs. “The result of an aging workforce is a growing interest in succession and talent,” says William Rothwell, a professor of workforce education and development at Pennsylvania State University and president of Rothwell & Associates, a consulting firm that focuses on succession planning. He says the conundrum of whether to tell employees is “the most famous question in succession planning.” The options range from complete transparency to closely guarded secrecy to something in between. Retention is the main advantage of telling potential successors they're on the fast track. Top workers are more likely to stay and continue to excel if they feel valued and see major opportunities ahead. At the same time, open communication can also identify high-potential employees who are happy where they are and don't want to rise in the organization. That may be disappointing news to employers, but it lets them see just how much bench strength they have inside the company and whether they need to start looking outside. However, showing your hand might not be the best strategy. “The people that are not told become upset,” Rothwell says. Even if a list of most promising talent isn't made public, word will usually get out and some employees may become discouraged and less productive. “You want folks to have the view that they would be potential candidates, not that it's a foregone conclusion,” says the CEO of a national staffing company in California. He asked to remain anonymous because succession plans are “not disclosed, not something that we share.” The problem with disclosure, he says, is that employees might not feel they have an equal chance to vie for a leadership position if they know there's already a short list of candidates. “Did they have an opportunity to really compete for that role?” The CEO says employees might wonder: “Was there a fair and balanced process?” Keeping lists of promising talent secret is tricky business. At an energy company in Texas, current and future managers who have been tagged as executive material come together every couple of months for educational meetings on management topics. Although the list of attendees isn't publicized, word of the meetings could get out to other employees and cause tension. The company does more targeted succession planning for its top executive roles, making lists of the most qualified internal candidates. Those lists are not formally publicized, even to the people on them, but a manager could drop hints about a possible promotion. Employers also must keep in mind that the list of candidates in their succession management plan could change before a C-suite leader exits. If companies tell employees they're on the short list and then the business or the workers' performance changes, they may no longer be leading candidates. “You constantly have to undo what you did if you communicated with people,” the CEO says. Many companies find a middle ground. “The ‘To tell or not tell' question is really the wrong question,” Rothwell says. “It sounds like, ‘Tell everyone or no one.' ” The better questions, he says, are: who to tell, what to tell and when to tell? In communicating succession potential, companies usually don't want to lead employees to believe they're in line for a specific position. Clearly, that could cause hard feelings between the up-and-comer and the person currently holding the position. But if there are many opportunities for promotion, telling a worker that, for instance, he is on track to be a vice president doesn't necessarily mean he'll take a particular person's job, says Steve Datnow, chief technology officer for HumanConcepts, a software company based in Sausalito, California, that focuses on workforce planning. In that case, “you can be fairly open.” At Midmark Corp., a medical equipment-maker based in Versailles, Ohio, managers identify potential successors every six months as part of the performance review process and produce an evolving list of candidates. Conversations about succession plans start with questions to the employees. “Usually we ask them, ‘What do you aspire to be here?' ” says Anne Eiting Klamar, the company's president and CEO. “If it's someone at a director level with mediocre performance who wants to be CEO, then we have a more realistic conversation with them.” In addition to identifying candidates for future promotions, Midmark labels some employees as “high professionals.” “They're really good at what they do but are not going to go any farther,” Klamar says. These strong performers usually know who they are. “Often they are very happy in their careers as a high professional because they are passionate about and really good at what they do.” Other employees are identified as “high potential” for leadership positions and are given robust development plans. “We think about moving these high-potential people around. We talk about giving them overseas assignments,” Klamar says. “Succession planning is the most important job that a CEO has because we need to manage not just for today but for the long-term viability of the company, as well.” There's a flip side to telling top performers they're being groomed for bigger and better things. Sometimes, employers also must communicate with the people whose days with the company are numbered. That can make for potentially awkward conversations. Michael Vasey, president of Lindauer River Ranch, a prune and walnut orchard in Red Bluff, California, for example, must plan for the imminent retirement of two key employees from its roughly 35-person staff. To more precisely determine how soon successors will be needed, he says he had to ask the senior employees without making them feel that he was prodding them to leave. His message to them: “ ‘You're doing a great job here, and we want to keep you here as long as we can. But we do want to think about this, and it's helpful for us to understand what your plans are.' ” Vasey says he emphasized that he understood plans can change. The key to a successful conversation, he says, is “them knowing that you're not going to force them to do something if their plans change, and that we're not trying to replace them.” Workforce Management, June 2011, pgs. 16, 18 -- Subscribe Now!