In this article I would like to discuss the controversial question, if employees should be informed about the way their potential has been rated. Assessment of potential is a highly complex topic. I will outline here why superficial discussions on potential can be quite damaging. My recommendation is therefore to rather focus on career perspectives, which is what employees really need to know about.
Should high potentials for example be informed about that evaluation of their potential? At first sight, you would say that being open and transparent to employees is a good thing. Especially, if it is being open to high potentials about the fact that the company believes in their ability to grow fast and that it will therefore invest into their development. That is of course highly motivating for them.
Inform all or no one
This immediately triggers the question what information to give to those who are not rated as a high potential. Should they also be informed, knowing that this could have, to the contrary, a demotivating effect? An option would be to speak only to the high potentials and not to the others.
But, if it is known that high potential are informed, it will be also be quickly known in the company that that the non-high potentials are not informed. So it will in the end be quite easy for employees to tell how the company is assessing their potential, even if they are not explicitly told. With other words, if you are open to the high potentials, you have automatically to be open to all.
So let’s take as an assumption that everyone should be told. The non-high potentials could still be reassured that the company is also investing into their development and career progression, but that the expectations are maybe not quite as high, which might in the end suite them quite well.
Assessment of potential is complex
This leads to the question what high potential actually means and how it is measured (see also my video on this topic: How to assess potential?). Everyone would agree that this is a complex topic. I will not be able to outline here in detail the different perspectives, models and criteria that have come out of research and company practice in this field, but let me just mention a couple of aspects to illustrate the breadth of that topic:
a) Learning agility
The academic background for example has certainly something to do with someone’s potential. A Harvard graduate is likely to have more potential than someone who did not get his/her A level.
b) Experience base
The experience base that a person has been able to develop is relevant as well. An employee who had exposure to many different functions, geographies, business sectors or industries and who has moved fast and successfully is probably showing greater potential compared to someone who has been very steady in just one role.
So learning agility is without any doubt an important factor of potential. But the willingness a person has to go the extra mile will contribute as well. Ambition, energy, will to win, etc. are therefore other components that can be taken into account when assessing someone’s potential.
Leadership should be considered as well, because the ability to inspire others is an important aspect of someone’s ability to take broader responsibility.
Finally, we could talk about emotional intelligence that shows in a person’s self-awareness and situational awareness.
Superficial conversations on potential can damage
Most of these criteria are themselves complex. How to assess someone’s learning agility or self-awareness? It takes some deeper understanding of these topics to be able to have a robust evaluation of people’s ability in these areas. Leadership consultants are trained for that. They have tools such as psychometric tests to support their analysis.
But that is not the case of the average manager, who might struggle to even define potential. Managers can hardly be held accountable for that, because it is a job in itself to conduct such assessments, as I said. I have discussed the usage of leadership assessments in another video (Leadership Assessments – Pros & Cons) and will not go into details here, but it is clear that we could not put every employee through such an external assessment. That would be ways to heavy and expensive
Managers therefore have to do that evaluation, usually with the support of HR. That means that managers have to be trained and that tools should be made available to them in order to support this process. But we cannot expect that they become experts.
Is it still advisable to inform employees about the result of that managerial assessment? To be honest, I am not so sure.
Being told if you are a high performer or not can have a significant impact on people. I am not totally sure if it is a great idea to ask all managers to inform each of their team members about the way their potential has been assessed.
In many cases, managers would certainly have done their best to come up with a high quality evaluation, even if they are no experts. But in other cases, managers might not take that quite so seriously and use more their gut feel than a deeper assessment. And in such a case, it could be risky to ask them to have such an interaction with their team members.
I believe you must have some legitimacy for such a feedback discussion. That implies having the competence to have a quality discussion and not just a quick feedback about the “rating”.
Focus on career development
I believe that there is another way to manage this discussion which helps to avoid the pitfall of the complexity related to potential.
We can use succession planning: Selecting people for certain jobs is clearly a managerial responsibility. This is also not an easy task, but that is an important part of the job of any manager. Managers have to fully own that responsibility. Managers are therefore also fully legitimate to evaluate who could step into future roles and be therefore considered as successors as it is done in succession planning.
This is in my eyes a much better place for the conversation between a manager and their team members: to share what next steps the company would see for a person. In case of employees with high potential, these next steps will be quick and the step up will be bigger. For others it might be a more progressive development. But in all cases the conversation is focused on this topic of career progression and on the development actions that the company can put in place to help a person get ready for these moves. I believe that this offers all the transparency that employees need.
Use assessment of potential to prepare succession plans
Managers can still use the potential assessment tools to help in their assessment of team members as a basis for that succession planning, but it is just a support, not a means in and of itself. This makes it much less necessary to share that potential assessment, because the conversation will rather be centered on the outcome that the potential assessment has helped to define: the succession plans.
I would be very interested to know your perspective on this controversial question. I am not saying that there is any right and wrong, but I hope that this video helps to stimulate thinking about this topic and maybe some fruitful discussions.
More information in my book:
Sven Sommerlatte : Successful Career Strategy – An HR Practitioner’s Guide to Reach Your Dream Job (Springer, June 2023). ISBN: 978-3-662-66790-3