Identifying High-Potential Employees

The August 2011 HR Magazine featured an article titled, "The Care and Feeding of High-Potential Employees." In this article, the author, Robert Grossman, identifies 14 ways to retain these employees. I found all of the points he makes to be pretty solid recommendations (at least in terms of the research supporting them) and worth reading. What Grossman doesn't do in his article is give much guidance on how to select which employees are high-potential. And that is what I would like to focus on in this posting.

Before we can identify these high potential employees, we need to define what a high-potential employee is. Ready, Conger, and Hill* suggest the following definition:

“High potentials consistently and significantly outperform their peer groups in a variety of settings and circumstances. While achieving these superior levels of performance, they exhibit behaviors that reflect their companies’ culture and values in an exemplary manner. Moreover, they show a strong capacity to grow and succeed throughout their careers within an organization—more quickly and effectively than their peer groups do.”

Based on this definition, we would identify some percentage of the top performing employees as high potential, maybe 5% for example. Of course, this means the employees are in the organization, which means you have already spent a significant amount of time and money on those employees while you wait for the "cream" to rise to the top. This is not necessarily a bad thing, but it is costly. Since many high-potential employees are going to end up in leadership positions, we could also use tools like assessment centers to help us identify high-potential's, but these assessments can be costly, and so are not considered by smaller organizations that lack the resources to utilize these tools. And assessment centers tend to identify high-potential managers, ignoring the fact that many employees may be high-potential but not interested in management. 

For the last 40-50 years, however, Elliot Jaques has preached what I would consider a better way to identify high potential employees. In his Stratified Systems Theory, he takes a two-stage approach to getting high performance. First, we need to do a better job identifying what work capabilities are needed for the jobs employees fill. Work capability is made up of a persons ability to mentally process complex tasks accompanied by a persons motivation to do that particular kind of work and the skills they have acquired (or can acquire) to do the work. The complexity of mental processing is the primary component of this model and is very influential in their ability to adequately perform the work tasks associated with a specific job. A persons personality is influential to their work capability only to the extent that the personality is negative and can be detrimental to their job performance (like a highly neurotic person that is hard to get along with and gets overly anxious when problems arise). The second stage is identifying the work capability of the individual we are considering for the job. By matching a person with a job that fits their work capability, we are most likely to get higher performing employees, and this more high-potential employees. 

Many organizations do try to do this, but I believe we fail to do a thorough job at it. For example, many organizations do not do job analyses at all, and when they do they fail to identify the complexity level of the job. O*NET is working to remedy this to a certain degree, by introducing job zones to their analyses. These zones look at education level, experience, and on-the-job training requirements of the job but do include elements of mental ability, so in that regard the job zones fall short. Some organizations also use some testing in pre-hire selection processes, but many organizations avoid cognitive ability testing (for a variety of reasons) and this severely limits our ability to identify high-potentials.

In essence, we should be very concerned about getting high-potential employees. Some statistics suggest that the top 1% of employees outperform the bottom 1% of employees by as much as three times. That means that we have a lot of employees not reaching their maximum potential, or not capable to reach the potential we need. And that's not really ideal for any organization.

*Ready, A. D., Conger, A. J., & Hill, A. L. (2010). Are you a high potential. Harvard Business Review, 88(6), 78-84.