Building your A-Team: Assessing Employee Performance vs. Potential

By: Natalie Trudel

Even if your company is not currently in the market for a team of entertaining mercenaries, that doesn’t mean that you shouldn’t be focusing on actively identifying and developing all-star employees and giving management the tools needed to form their own A-Teams.

Technically, organizations should strive to have nothing but all-stars on their talent roster; however, chances are that most companies are lucky if 10%-20% of their workforce is labeled as ‘high-performing’ (there are many process-related reasons that account for this but that is a whole other discussion). Unless you are willing to settle for an organization filled with B and C Teams, you need to get tactical about the way you identify and develop top-talent.

The first thing to consider is employee performance vs. employee potential. Historically, employee performance was the main driver in determining succession, rewards, and recognition; however, recent years have shed light on the importance of considering employee potential when creating development plans and performance strategies. Think of it this way – a seed doesn’t look like much next to a plant, but invest a little time and energy into it, and it has the potential to become a flower or one of those neat plants that kills flies. You should think of identifying your all-stars along the same dimensions – who is great now and who can be even greater sooner?

The difference between high-performers and high-potentials:

High-performers give immediate return on investment, with estimates averaging from more than 50% additional value, to as much as a 100% increase in productivity over average performers. i

High-potentials are typically defined as those demonstrating high-level contributions, organizational values, potential to move up to an identified position within a given timeframe, and potential to assume greater responsibility. i For example, some organizations operationally define high-potential employees as those who are able to assume greater responsibilities within the next two years and who exhibit a history of high-performance and leadership potentials; also may be defined as employees who are able to advance two leadership levels within 4-8 years and who score well on various assessment criteria.iv

Most high-performers are not high-potentials BUT all high-potentials are high-performers.iii

The second thing to consider is a way of mapping performance vs. potential data in a way that allows you to quickly identify the performance status of employees and the organization as a whole. Luckily – the popular Nine-Box Talent Matrix does just that. It uses performance data from 360 reviews, performance appraisals, peer reviews etc. and maps it along the potential data from self-assessments, surveys, manager assessments etc. and tada! A real-time snapshot of organizational health is available.

nine box

As you can see – employees that are in the blue section need to be rewarded and retained! They are your A-Team – especially the top performing/top-potential employees. Efforts should be made and strategies devised to hold onto those employees for as long as possible. Ensure that managers are aware of who these individuals are, how to make sure that they are properly engaged and satisfied in their roles, and what positions they are primed to grow into.

Employees located in green are your B-Team. They should be strategically developed and monitored in an effort to push them into the next level. Managers should be prepared to assess what is preventing better performance or how to handle high-performers with low potential.

Employees in purple are special cases. They are either all performance or all potential. One-on-one meetings with the employee should be conducted to assess their level of engagement and historical data should be revisited to locate possible trends or recent dips in performance or potential. Efforts should be made to answer. What is going on with this employee, can it be remedied, and how? Is the employee not given enough performance feedback? Have they been given the opportunity to show potential? Are they engaged in their current role? Etc.

Lastly, people in orange can be problematic. Are the low performing / low potential employees at the right place? What is preventing them from performing, why do they have such a low potential? Is this a problem of motivation? How long have they been working there? Are they just waiting for a better opportunity? How driven were they in the past? Many things should be considered and acted upon – quickly.

I have read a few online posts that claim manually mapping the matrix is possible but to be honest – I pity the fool who attempts it (couldn’t help myself). There are far too many variables (appraisal results, 360 results, self-assessment criteria, etc.) that should be included to attempt an accurate mapping. Why not let technology do the work for you? With an automated EPM software solution then there is no need to map this out manually as the software automatically imports the results from appraisals, assessments, surveys, development plans etc. into the matrix. If you are using an automated talent matrix, then opt for one with an adjustable performance vs. potential sliding scale so that a more accurate drill down of performance can be conducted to suite each department or role. CRG emPerform’s succession manager offers the Nine-Box talent matrix with this sliding scale.

i. Corporate Leadership Council, Executive Summary, February 2005. William D. Koch, Directions: Closing the Gap Between the Best and the Rest, Development Dimensions International, 2007.

ii. Corporate Leadership Council, Literature Key Findings, Washington: Corporate Executive Board, 2003.

iii. Corporate Leadership Council, Guidelines for Using a Nine-Box Matrix, Washington: Corporate Executive Board, July 2005.

iv. https://www.performancesolutions.nc.gov/developmentInitiatives/LeadershipDevelopment/Models/docs/IdentifyingHigh-potentialEmployees.pdf