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High-potential employees possess higher intellect, relentless drive, agility, adaptability, and an orientation to lead. They develop themselves to handle broader and complex future work challenges, responsibilities and become successful leaders in the future. They not only create value for the company but often act as a catalyst in the process of shaping up the organization’s future. These factors help to distinguish HiPos from the rest of the workforce clearly. They indicate that it is not the current job performance that sets employees apart but the potential to grow and succeed quickly in future roles.
High-potential employees are part of a larger talent pool, who can be identified and developed based on the need and strategy of the organization. High-potential employees are considerably more critical to the organization.
The key indicators of HiPos are:
Intellect is defined as the ability to think long-term, handle complex challenges, and make effective decisions. It also signifies the ability to think strategically and manage long-term goals. As one climbs up the corporate hierarchy, one’s role evolves from being an individual problem-solver to that of a strategic thinker. Individuals who cannot shift their focus from immediate problem solving to thinking long-term, are most likely to struggle in their future roles. Thus, the ability to understand the dynamic internal and external environment and consider the long-term impact of one’s actions and decisions are essential for a HiPo employee. The ability to think analytically, spotting a pattern or trend in a complicated situation, and making effective decisions quickly are the distinguishing features of a HiPo employee.
Usually driven by strong will and motivation to achieve more, HiPos work earnestly to achieve goals and are determined to attain results at all cost. They display higher aspirations to take challenging positions to prove themselves. HiPos usually flourish if they are given challenging targets to meet, coupled with the proper support to achieve them. They are also committed to taking initiatives, learning new skills, and are always seeking opportunities to excel.
The ability to quickly read a tricky situation and navigate through it smoothly are some of the defining features of a HiPo employee. HiPos hold a positive outlook toward dynamic changes. Their ability to move quickly and easily across roles and locations, making meaning out of ambiguous situations, and comfortably adapting to change are some of the core characteristics of a HiPo employee.
It is often considered risky to include people who don’t possess the potential to lead in a HiPo program. To flourish in future roles, leadership skills such as motivating and inspiring others, influencing and guiding team members, become critical. The ability to build trust, credibility, and confidence among team members is an essential trait to succeed in future roles. HiPos are typically people with strong networking skills and are well connected with both internal and external stakeholders.
Mercer | Mettl’s Scientific Framework For Identification of HiPos
The terms potential and performance are often used interchangeably. While a consistent performance in the past might be an entry-point for a prospective high-potential employee, it can only predict the performance in the future given the quantum of responsibilities and nature of challenges remain unchanged.
However, in a digital world where new challenges are routine, differentiating, identifying, and developing potential and performance, both, are pressing priorities for organizations for achieving business success.
In a recently conducted survey involving over 150 organizations globally, we discovered that more than 50% of organizations didn’t have a formal HiPo process (Mercer | Mettl, 2020 HiPo Identification Survey). There was an informal understanding among managers about the organization’s high performers – which was based on employees’ performance.
There are numerous reasons why a HiPo initiative doesn’t fructify in many organizations. A key challenge in identifying high-potentials is that present performance, as an indicator, often overshadows other attributes that might be more important characteristics of a high-potential employee. Additionally, in the absence of a clear definition of potential and the competencies that define a high-potential employee, managers often invariably focus on performance alone.
30% of the respondents defined high-potential as the quality of displaying a consistent track record of exceptional performance.
Businesses and their functions are undergoing a paradigm shift. The skill sets that enable employees to perform their roles, now, might be outdated to achieve the same level of performance in the future. For organizations to remodel themselves, it is crucial to assess the potential of their employees to understand their training and developmental needs.
Given the differences mentioned above, ‘potential’ requires an organization to scratch beneath the surface. ‘Performance’ alone can’t be used as a suitable metric to indicate potential. While potential encompasses traits of performance, basing high-potential identification on performance alone can create a bottleneck in identifying promising talent that might be responsible for propelling your organization towards future success.
It is common to suggest high performers for high-potentials. Almost 30% of organizations rely on managers’ recommendation to nominate and identify employees for the high-potential program, which only considers an employee’s performance. However, high performers, when placed in positions not suitable to them, may not perform as expected. They are bound to fall short if they don’t have the potential to take on future roles. And ultimately, it leads to losing a great performer who could have been an asset to the company if groomed differently. Performance matters significantly, but it is not guaranteed that top performers will become successful bosses/managers/leaders.
High performance, especially in technical or domain skills, usually gets noticed or identified sooner. However, domain knowledge can exert limited influence on determining success in future roles. An overall openness to learning becomes more important as one moves away from a clearly defined role in the present to an uncertain role in the future, which might require shifting teams, functions, business units, and to learn new skills to perform effectively.
The nine box model consists of nine boxes with performance on the x-axis and potential along the y-axis. The top right box is the ideal position where high performance and high-potential converge. Conversely, the bottom left division is the one that depicts low scores on both counts – performance and potential. The 9-box model serves as a catalyst that facilitates the creation of a developmental journey. Once each employee is mapped to the 9-box model, organizations can design a unique approach for each box, which, in turn, enables creating an individual employee development plan.
Owing to its simplicity and efficacy, the nine box model of performance vs potential is a widely accepted tool to differentiate high-potentials vs high performers. Each division in the performance vs potential grid acts as the first step towards building a future-ready workforce.
Organizations often struggle to position employees accurately onto the 9 box grid model and hence are unable to extract the desired success from their high-potential identification initiative. Though a valuable tool for talent assessment, development, and identifying gaps, the prerequisite for the nine box model of distinguishing high-potentials vs high performers is to have defined competencies considering future organizational shifts.
Some ways in which organizations can develop their high-potential employees are:
The digital economy has placed employee development at the forefront. The optimal success of your HiPo identification program is dependent not just on identifying them but developing and preparing them for future roles. Organizations are increasingly shifting focus to identifying and developing employees who have consistently displayed the potential to assume complex future roles with unforeseen challenges, to create a pipeline of future-ready talent. The development of high-potential employees, in a way, also lowers their attrition rate by guaranteeing them a place in the future of the organization.
The 9 box grid model can help organizations identify the readiness of an employee to match them to the right development exercise. The performance vs potential matrix lays down the foundation of a sound high-potential employee development plan by highlighting the areas that require investments and efforts to develop future champions. It also defines the readiness duration of an employee in assuming a more complex role, which means that employees in the top right box will probably take between one to two years to take on more evolved roles while others might take longer, depending on where they stand in the matrix.
The high performance or high-potential employees are champions and need to be acknowledged, rewarded, and challenged adequately.
High-potential but low-performance employees require a distinct strategy to motivate them. Low performance, low potential employees need to be reassigned altogether. The performance vs potential matrix eventually guides organizations towards overall employee improvement and development, leading to a future of a formidable workforce.
The nine box model, with the right kind of analytical tools for high-potential identification, can help organizations derive the maximum value out of the program and set employees on a path of learning and development. The HiPo framework can enable organizations to identify areas of strengths and weaknesses to further their potential, which can help create a definitive employee development process.
While organizations expect all their employees to function to the best of their potential, it is primarily believed that an organization is driven and sustained by a select few high-potential employees. How to move employees to the right side of the performance vs potential grid, and ultimately to the top right box, is the question facing HiPo experts.
High-potential identification is a science as much as it is a synergy – the science lies in the strategy and tools, the synergy lies in the process.
Originally published April 9 2020, Updated December 17 2020
Bhuvi is a content marketer at Mercer | Mettl. She's helped various brands find their voice through insightful thought pieces and engaging content. When not scandalizing people with her stories, you’ll find her challenging gender norms, dancing to her own tune, and crusading through life, laughing.
High-potential identification, also known as 'Hipo,' are employee development initiatives undertaken to identify the most valuable employees and develop them. It helps organizations identify leadership potential, build critical teams and retain top talent.