Most companies evaluate their current talent pool at the very least annually. Often, they look at their employee's overall performance and try to see if they can find an excellent candidate for a future leader working in their organization. When evaluating talent, leaders need to identify when a person is a high performer or has high potential. Being unable to distinguish between the two puts them at risk of potentially falling short and losing their top talent.
High performers can provide great results quarter after quarter, but it doesn't necessarily mean they will make a good leader. Often high performers are higher valued than those with high potential, and companies will find once they move their high performers into leadership roles, they fail within the first year. The truth is high potential employees are more likely to find success as a leader in the future and provide more value to the company overall.
The words potential and performance are often confused when discussing current and new talent within the organization. While they do work together, they should be distinguished to assess all talent within the organization accurately. Evaluating performance versus potential could be the key to developing a highly effective workforce. This guide will help you distinguish the difference and learn how to assess employees for high potential properly.
What is the Difference Between Performance and Potential?
Potential and performance are two common keywords used in reviews, whether it's an annual review, touch base, or evaluating new hires. Establishing clear definitions of these two related but different terms can help leadership accurately evaluate an employee's level of success, whether now or in the future.
Potential – Potential is how an employee may perform in the future based on their current capability and aptitude. It's essentially looking at a person's current qualities and strengths and evaluating how those strengths can be grown through practice and training.
Performance – Performance is the actual measure of the process of completing tasks. It's the ability to complete tasks within a deadline consistently or meet certain metrics.
It's easy to combine the two terms since they often overlap and can be difficult to identify. Employees with high potential can also be high performers, and low performers can show great potential. Identifying high performers is easier to observe than high potential, and often, the attributes that may make up an ideal employee are overlooked.
Because high performance is easier to identify, leaders tend to focus more on this factor and will promote these high performers while employees with high potential are left in their positions. High potential employees will eventually move on from the company, and the company ends up losing an extremely valuable employee. Leaders reviewing talent need to consider each term individually and carefully to get a full picture of how their employees can contribute to their organization to identify high potential.
How to Identify High Potential Employees
Potential is a way for you to identify what an employee is capable of in their future roles. To correctly identify high potential employees, they need to look at current qualities, traits, past behaviors, and outcomes of goals. How do you properly identify employees with high potential? There are three major factors that are general markers of high potential.
Ability – High potential employees will demonstrate the ability to seek and develop themselves to improve their current skill sets and develop new skills to prep
are for future roles. They will typically show high levels of critical thinking, are adaptable and show a desire to lead.
Social Skills and Emotional Intelligence – Having a high level of emotional intelligence is when employees can recognize emotions in others and be able to respond appropriately and often excel in interpersonal relationships. They manage themselves well and can show either firmness or empathy depending on the individual situation. Individuals with high potential typically will collaborate and communicate well with other teams and can influence and motivate team members to succeed.
Motivation – High potential employees are highly motivated and work hard to exceed expectations in meeting goals. They will have a strong work ethic and continuously strive to do better.
When you are evaluating high performers versus high potential, you want to evaluate each separately and have a clear strategy in place to assess your employees on the metrics that matter more to your team and organization.
Identifying your high-performing employees is a critical first step. Once you have identified who your high potential employees are, you need to develop them. High potential employees know their worth, and it's important to foster development in them before motivation diminishes and they look for outside opportunities. Developing a strategy that prepares them for future growth can profoundly impact their success in becoming future leaders.
• Create a special leadership track to set your high-potential employees on the right path by selecting specific training and certifications. Offer development they are interested in and provide numerous resources to tap into.
• Regularly check-in and assess their feelings and see if there is anything they need. It can help you identify if they are on the right path or if something is off so that you can correct and get them on the right path.
• Offer mentorship and coaching through fellow leaders or offer coaching yourself to help guide them through their career path. Mentorship allows you to establish a strong relationship to foster growth and help them learn through experiences, correct any mistakes, and provide insights to build an effective leader.
Being able to identify between high performers and high potential employees effectively can help you avoid critical mistakes and future failures in leadership. Your organization, like all organizations, relies on good leadership to boost morale, improve effectiveness, and be successful. Developing your high-potential employees through the right strategies can ensure you have a steady pipeline of strong leaders.
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