Assessment and performance
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8 min read
Key findings
Past performance predicts future performance in proportion to the overlap between the two jobs, so a list built on current results inherits that limit.
Silzer and Church found four definitions of potential in use across 20 companies, and a single list mixes them.
Derailment estimates of between one half and three quarters of managers make a check on how each person could fail part of every entry.
Three checks using existing data score a list: placement, performance after the move, and the people who left.
Formally identified high potentials were less likely to seek other employment, 14 per cent against 33 per cent, in a survey Smith and Campbell cite.
Past performance predicts future performance in proportion to the overlap between the two jobs.
A high potential list goes wrong when it records current performance, visibility and likeness to the rater in place of potential for a named role.
To audit an inherited list, ask four questions.
What is each name on the list for, what evidence supports it, how could the person fail, and did last cycle's names go where the list predicted.
The organisation already holds the data to answer all four.
The answers usually decide whether the list is revised, narrowed or retired.
What The List Is For
Ask an executive team what the list is for and the answers differ.
One person means the successors for the top thirty roles.
Another means the people worth development money.
A third means the people who must not leave this year.
Those are three decisions, each needing different evidence, and one list cannot serve all of them.
Most organisations run the process anyway, because not running it looks like neglect.
The list is rarely examined once it exists, and the questions that would improve it are uncomfortable to raise in the meeting.
High Potential And High Performer
A high performer delivers against the standard of the current job.
A high potential person is expected to perform well in a different and larger job.
Furnham, MacRae and Reed call the confusion of the two the performance delusion.
Their example is screening the best nurses as candidates for nurse manager, which treats two fundamentally different jobs as one.
Past performance predicts future performance in proportion to the overlap between the two tasks.
A list built on current results inherits that limit.
Potential is also relative to a domain, in the way that a gifted mathematician is not gifted at everything.
Silzer and Church describe the same context dependence, in which someone can be a high potential artist and a low potential leader.
The question that keeps a list honest is therefore potential to do what.
Four Definitions In Use
The word potential means different things inside one company.
Silzer and Church surveyed 20 companies and found four corporate definitions in common use.
Potential to reach a senior management role, 35 per cent
Potential to move up one or two levels, 25 per cent
Potential to take on a wider range of roles, 25 per cent
Past performance, 10 per cent
Managers often hold private definitions as well, which differ from the one that human resources has written down.
A list built on a mixture of those definitions records whichever one each nominator had in mind.
Equating potential with leadership potential is too restrictive, because some demanding and highly skilled careers do not require leadership.
What The List Measures
When the criteria are vague, ratings fill the gap with whatever the rater has to hand.
Four substitutes turn up repeatedly.
Current performance. It is visible, recent and defensible in a meeting, so it stands in for a judgement about a future role nobody has described
Visibility. Exposure to senior leaders is treated as evidence of capability, and people in central functions accumulate it
Similarity. Raters favour people whose style resembles their own, and the preference reads from the inside as confidence in the judgement
Unmoderated nomination. A manager with high standards under-nominates, a manager who treats nomination as a reward over-nominates, and nothing reconciles the two
Asking managers to try harder corrects none of these.
Changing what each rating must contain does.
Nominations are made against written criteria and reviewed by a group that sees across units, before the list exists.
The Derailment Question
Furnham and his co-authors identify a blind spot they call selecting in, not out.
It means looking for positive traits and forgetting the characteristics that make careers derail.
Estimates they cite put derailment at between one half and three quarters of managers.
They describe three kinds of derailment, which they call bad, mad and sad.
Sad derailment is the most common, and it is a false positive.
The person's intelligence, experience and other traits were over-estimated because of poor tools or inexperienced assessors.
The person is then promoted beyond their abilities and struggles until they leave or are removed.
Bad derailment is deliberate self-interest, and the people concerned are the best at appearing to have high potential.
Every person on the list therefore needs a second answer.
Under what conditions would this person fail, and what evidence exists about that.
An entry that records only the upside has not been completed.
Evidence Behind A Name
The strongest evidence for a named claim comes from methods with high validity.
Cook's comparison rates structured interviews, ability tests, work samples and assessment centres high on validity.
Cook also finds that selectors give cost too much weight, and that a valid method is almost always worth using.
The evidence on these methods is set out in what selection methods predict.
Succession decisions worth many times the assessment cost are taken from these lists.
One structured method applied consistently to everyone in scope gives more than several unstructured ones applied unevenly.
Experience is the other decisive ingredient.
Furnham and colleagues note that experience compounds in both directions.
Little experience leads to fewer offers of experience, and rich experience leads to more.
Employers and employees share responsibility for opening those opportunities, and the employer controls most of them.
A useful sequence asks what the destination role will demand that the current one does not.
It then asks what in the person's history is evidence of meeting that demand, and what evidence is missing.
Creating the situation that supplies the missing evidence is a deployment decision.
Examples are a difficult assignment or an operating role in an unfamiliar market.
An entry that records only the upside has not been completed.
Auditing An Inherited List
Any list makes a prediction, so it can be scored.
Three checks are enough, and all use data the organisation already holds.
Placement. Of the people on the list two years ago, how many moved into the intended roles, and how many have not moved
Performance after the move. Of those who moved, how many perform at the expected level after twelve months
People lost. Of the people who left, how many were on the list, and how many should have been
The second check shows whether the criteria predicted anything.
The third is harder to establish and more revealing.
Two further questions work with an executive team, because both use its own data.
Of the senior appointments made in the last three years, how many came from the list.
Of the people named three years ago, where are they now.
Weak answers make the case for changing the criteria without anyone having to concede that the talent function was careless.
The List And The Strategy
A list is built against a picture of the future, which is often the previous strategy.
Take the ten roles that the current strategy will create or materially change in the next three years.
Ask which of them the list is building people for.
Where the answer is none, the list maintains the organisation as it exists.
It should be described that way to the board.
Who Gets Left Off
A list is a boundary, and it has effects on the people outside it.
Furnham and colleagues warn that an unreasonably restrictive definition of success can demotivate people outside the identified pool who have overlooked potential.
They also note that valuable roles are easily overlooked when they are done well.
For some people, success means consistent performance and reliability.
People with high potential may also have a keen sense of equity, in Furnham's account.
Among the six responses to perceived inequity that they list are changing effort and leaving.
Strong performers who are not on the list infer their status from who is invited to what, and the inference is rarely corrected.
People in low-visibility roles are under-nominated across cycles, and the leadership population narrows to a few functions and locations.
The conversation with someone who has been left off is covered in telling someone they are not on the high-potential list.
Disclosure And Retention
A list creates expectations that the organisation has to meet.
Smith and Campbell report that 95 per cent of high potentials say they are committed to their organisations.
Even so, 21 per cent say they are actively looking for another job.
They also cite a 2010 Forbes.com article on formal identification.
It found that 14 per cent of formally identified high potentials seek other employment, against 33 per cent of those not formally identified.
Transparency and formality of identification affect how people see themselves and the organisation, in their account.
Treating all high potentials the same is a common mistake, and a range of clear paths works better than one programme.
A person told they are on the list needs three things.
They are the role the list is for, the evidence behind the claim, and the next step with a date.
A label with no next step converts recognition into frustration within a cycle or two.
Rules For A Better List
None of this argues for abandoning the practice.
Five rules narrow what a list claims and make each claim testable.
A named destination. One list for general manager roles and another for technical leadership, each with its own criteria
A testable claim. The role type, what the person would have to do differently to hold it, and the evidence that they can
Risk beside promise. The derailment question on every entry
An expiry date. Membership lapses unless the evidence is renewed, so the list cannot become a status register
One consistent method. The most valid method the organisation can sustain, applied to everyone in scope
The size of the list follows from the destination roles and the successors each needs.
It stays below what the organisation can fund with real stretch assignments.
The nine box grid can display the result, and running a talent review that changes decisions describes how to settle it in the meeting.
Next Cycle
A full redesign is rarely available, and a narrower step usually is.
Pick one population and define its destination roles.
Write each claim as a testable sentence, add the derailment question, and run the three checks against last cycle's list before the next one starts.
That gives the executive team evidence to discuss before it discusses names.
Where The Tools Sit
Trusted Talent Advisor covers the criteria and evidence standard behind a list in component 05, Facilitating the Talent Forum.
Component 06, Evidence and Impact, covers the case for a different method.
Its template pack includes the nine box grid, the succession slate and the talent risk register as canvases.
Sources
1. Furnham, A., MacRae, I. and Reed, M. High Potential: How to Spot, Manage and Develop Talented People at Work. Bloomsbury.
2. Silzer, R. and Church, A. H. The Pearls and Perils of Identifying Potential, cited in Furnham, MacRae and Reed. Industrial and Organizational Psychology.
3. Smith, R. and Campbell, M. Talent Conversations: What They Are, Why They Are Crucial, and How to Do Them Right. Center for Creative Leadership.
4. Cook, M. Personnel Selection: Adding Value Through People. Wiley.
From the system
Trusted Talent Advisor sets out the full method: seven components, 51 tools, The Talent Template Pack and The Prompt Library.
See the system
Questions this answers
How do you identify high potential employees?
Define the destination role first, then test a claim about each person: what they would need to do differently in that role and what evidence shows they can. Use structured methods with high validity and record how the person could fail as well.
What is the difference between a high performer and a high potential?
A high performer delivers against the standard of the current job. A high potential person is expected to perform well in a different, larger job. Past performance predicts that only in proportion to the overlap between the two jobs.
Should you tell employees they are on the high potential list?
Smith and Campbell cite a survey in which 14 per cent of formally identified high potentials sought other work against 33 per cent of those not identified. Tell people the role the list is for, the evidence and the next step with a date.
Why do high potential programmes fail?
They commonly mix definitions of potential, rate current performance and visibility instead, look only for strengths, and give named people no next step. Sad derailment, a false positive from poor tools or inexperienced assessors, is the most common failure.
How many employees should be classed as high potential?
The number follows from the destination roles and the successors each needs, and it stays below what the organisation can fund with real stretch assignments. A fixed percentage applied to every unit ignores both.
What happens to employees who are not on the list?
They infer their status from who is invited to what, and the inference is rarely corrected. Restrictive definitions can demotivate people with overlooked potential, and some leave. Explain the criteria and the evidence that would change the answer.
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