May 11, 2023 | by Dr. Jia Wang

Making Your High Potential Employee Programs Work

Typically, identifying high-potential employees (HiPos) consists of three steps: pre-designation, designation, and post-designation.

Pre-designation addresses how organizations define potential and decide who is responsible for identifying individuals with high potential. Designation is about determining which employees are designated as HiPos. Finally, post-designation concerns whether the organizations communicate the HiPo status, how often they evaluate their HiPos, and how designees flow in and out of the HiPo status. This process can be challenging because different organizations may define “high potentials” differently; what classifies an employee into the group of HiPos is largely up to individual interpretation.

Due to different perceptions of potential, organizations are likely to make mistakes. Employees without potential are designated as HiPos and vice versa. Given these possibilities, a few pre-conditions need to be created first to make your HiPo program really work.

Define the meaning of “potential.” Generally speaking, high-potential employees are individuals who are proven high performers and are considered the rising stars in an organization. As mentioned above, since each organization has its own interpretation of “potential”, it’s important that you establish a consensus, across all levels, about what “high potential” means in your company. Having a clear and shared understanding, upfront, will help reduce confusion, inconsistency, and biases when your supervisors, managers, and HR staff engage in performance evaluations and talent reviews to identify your HiPos. It will also help clarify, to your employees, what it takes to be classified as HiPos in your company.

Identify the indicators of “potential.” A study published in Harvard Business Review revealed a sobering truth—only three of seven today’s high performers are high potentials. Another study shows that nearly 40% of internal job moves involving high potentials end in failure. The reason is potential is a complex, multi-dimensional concept, and should not be measured with one single indicator. Three commonly known dimensions of potential include foundational, growth, and career.

Foundational potential looks at the established characteristics specific to individuals, such as personality and cognitive skills. Growth potential involves the abilities an individual may possess or that can be developed, such as learning ability and motivation. Career potential includes job-specific characteristics, such as leadership ability and functional capabilities.

Each of these three dimensions can be used independently; however, to get an accurate assessment of an individual’s overall potential, all dimensions should be considered. In addition, there are some non-potential indicators that can also impact HiPo designation decisions. Examples include decision-makers’ perceptions about leaders, similarity and attraction biases, and employees’ impression management tactics (such as putting your “best foot forward” to be recognized).

For these reasons, it’s necessary to use multiple potential indicators for checks and balances.

Assess “potential” over time. High-potential people share three critical attributes—ability, engagement, and aspiration. Ability is a combination of innate characteristics and learned skills. Ability enables a person to be effective in more responsible and senior roles. Engagement is the person’s emotional and rational commitment, discretionary effort, and intent to stay with the same employer. Engagement drives a person to go beyond expectations and persevere in times of challenges. Aspiration is the desire to take on responsibilities and challenges. With aspiration, a person has the internal drive to rise to higher-level positions.

These three traits may change over time due to changes in personal circumstances.

Research shows 70 percent of today’s high performers lack all three critical attributes essential to their success in future roles. Therefore, it is not wise to equate current high performance with future high potential; instead, assess an employee’s potential at prescribed intervals.

The process of identifying and managing high potential employees is dynamic. To maximize the benefits of HiPo programs, business leaders and HR staff must be forward-looking by focusing on assessing employees’ future contribution potential.

Jia Wang is a professor in the Department of Educational Administration and Human Resource Development at Texas A&M University. Her research focuses on international and national human resource development, organization crisis management, and learning within organizations.

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