How to Evaluate Employee Potential

2 October 2020
6 minute
HiPo blog header

How can you identify the future stars of your firm? Those who will lead the way and take your business to new heights, elevating their team members’ performances along with them?

Current or past performance is not an accurate marker for future success. Psychometric assessments, on the other hand, can offer more pertinent insight on talent, determination and ability to lead. These kinds of assessments can identify the traits which are instrumental in identifying high potential employees (otherwise known as HiPos) and which ensure the long-term prosperity of your business.

Understanding how to recognise talent, nurture it, and then retain it, is crucial for organisational success. Psychometric testing of various types, from behavioural assessments to aptitude and emotional intelligence, can help you to understand the intricacies of behaviour and personality present across your business. That also helps with keeping employees happy and your business running successfully. Evaluating employee potential ensures you are objectively identifying the leaders of tomorrow.

How to evaluate employee potential: the key markers

Ability, engagement and aspiration are primary markers out of six mentioned through this article, crucial for identifying employees with high potential. These encompass the skills, experience, and attitudes of employees as they relate to business, personal growth, inner drive and their commitment to the business. Workplace personality tests are the best way to gain real insight into your employees’ abilities, priorities and mindsets.

According to an article in the Harvard Business Review, most companies claim 3-5% of their staff are high potential individuals. But is that really the case, and are they identifying those personalities correctly? It’s of utmost importance that businesses objectively and successfully discover their HiPos, and work on their career development to keep these individuals satisfied and engaged in helping to build the company.

This article will leave you with a toolset to help you recognise what makes an employee a real asset, and how to identify HiPo individuals in your business. It will illustrate the different facets of potential, explain the difference between potential and performance, and detail the various ways employee potential can be measured.

What exactly is employee potential

‘Employee potential’ can often come across as a nebulous term. What does it actually reflect? Employee performance? Their drive? Their behavioural and personality traits? It’s important to know, as when companies review their output, they tend to find that results are managed by a small number of their staff. That can skew results in favour of specific qualities or strengths over others.

However, there are six universally-accepted key markers of high potential employees. These are :

  • Ability - high performance
  • Aspiration - drive to succeed
  • Relationships - easy social skills
  • Behaviour - suitable to success
  • Adaptability - suitable response to changing circumstances
  • Leadership qualities

The 3 dimensions of potential

Along with these markers, potential can be broken down and examined from three different dimensions:

Career dimensions

Career dimensions are specific attributes and skills which surface through experience. The key factor here is that these traits are based on experience and are relevant to a particular job or occupation. These skills tend to be specific and are demonstrated at various stages throughout someone’s career trajectory. They also tend to be the first attributes considered during hiring, particularly at an entry-level. Career dimensions are important indicators for determining the long-term success of an employee in a role but they aren’t a determinant of high potential on their own.

Growth dimensions

On the other hand, growth dimensions of potential tend to become more apparent at later stages. Unlike career dimensions that can be developed, growth dimensions are usually relatively stable traits that don’t change much over time and are a combination of individual and situational factors. It’s important to identify growth potential as early as possible, since these factors can either widen or close the gap between current and future performance. These traits can also have a huge impact on whether leaders enable growth around them or exacerbate existing problems.

Foundational dimensions

Finally, foundational dimensions are considered the most stable characteristics across time. They aren’t depending on any specific job and can be translated across a number of areas. These are the best measures for predicting both short-term and long-term potential and consist of qualities such as intelligence and conscientiousness. 

What are the key characteristics of high potential employees?

As outlined earlier, the crucial characteristics of high potential employees include: Ability, Aspiration, Behaviour, Social Skills, Adaptability and Leadership.

Recognising markers of these traits is critical to identifying employee ability that can contribute to the business, and can enable employers to put development programmes in place to maximise the skills of these individuals. 

Ability relates to performance, and the potential to perform roles at a more senior position. It relates to an individual’s expertise, as well as their innate abilities. Able employees illustrate the capacity to work autonomously and consistently deliver results. 

Individuals with high aspiration show the desire to grow - whether developing knowledge or shouldering further responsibility. They aspire to accountability for decision making, and are clear on their long-term goals, making them great candidates for development programmes. They share a drive to achieve,  individually and as a team, and support and encourage growth.

Behaviour is one of the easiest traits to identify. Showing a high capability to learn, cooperate with others and manage their behaviours, HiPo employees generally illustrate the behaviour you would associate with high-performance individuals. This can be linked to their emotional intelligence; how they will handle the emotions of others as well as how they themselves behave under pressure.

Social skills are usually important for HiPo employees. They adapt their personalities to different responsibilities and changing circumstances. Common traits include extroversion, warmth, and social influence.

Carrying on from behaviour, HiPos show adaptability. Under pressure, they usually remain calm and continue to perform, and can pivot with relative ease when circumstances change - a highly desirable trait.

A strong understanding of the value of leadership, finally, is imperative for HiPos. They understand and respect quality leadership, and aspire to successfully fulfil such roles themselves. Early markers include leading smaller teams and displaying strategic thinking.

The difference between potential and performance

It can be easy to confuse high potential and high performance since the two traits aren’t always mutually exclusive. However, whilst HiPo employees are often high performers, high-performance employees don’t always have the propensity for high potential. That becomes apparent when high performing employees are moved into management roles and struggle to lead effectively - they might find that helping their teams achieve the high results they themselves are accustomed to a challenge.

High performers stand out from their peers, but high potential individuals will not only be results-driven but also possess an aptitude for leadership qualities, highlighting reasoning, rationality, adaptability and aspiration too. High potential employees are supremely valuable to your organisation, with this study stating they are considered 91% more valuable than non-high potential employees.

How to evaluate employee potential

The Thomas High Potential Trait Indicator (HPTI) was developed by Ian MacRae and Adrian Furnham in 2006. Based on an ‘optimality’ model, the design assumes that certain personality traits can be considered ‘optimal’, based on the requirements of a particular job role, such as senior executive leadership. 

The HPTI measures conscientiousness, adjustment, curiosity, risk approach, ambiguity, acceptance and competitiveness.

The participant’s responses are reflected as a position on a continuum, for each of the six traits - from low, through moderate and optimal to excessive. Too much or too little of each trait will hold its own advantages and disadvantages. Certain traits and certain levels of these traits will indicate a high potential for success, and could also highlight characteristics that threaten to derail a candidate who seems otherwise successful. 

Identifying your company’s HiPos early on ensures you can assist in their development and help to mould them into effective future leaders. It’s not only for their own potential; high potential staff can increase productivity across the team and improve performance by as much as 15%. Getting the most out of your high potential individuals will create satisfied employees, a productive team, and have a positive impact on the company overall, bringing long term growth.

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