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Measuring Performance Versus Potential in Employees

Identifying top talent is crucial for any company wishing to remain competitive and relevant in a busy marketplace. But how does a business distinguish measurements between high-performing and high-potential individuals? Is one more lucrative than the other? Is there a difference or are they one in the same?

Scholars from Harvard Business School and Stanford claim job candidates with large potential rather than high performance rates receive more jobs offers and make more money according to a 2012 study released by both of the esteemed universities.

An applicant with high potential encourages many companies to take a gamble, according to Talent Management.

“There’s something in us where, yes, we like people that have achieved things,” Michael Norton, co-author of the study and an associate professor at Harvard Business School, told Talent Management. “But there’s part of us that is really attached to the idea that we don’t know how well this person is going to do. They might be a superstar, and we’re almost willing to gamble and take a chance because it’s exciting to think about people having high potential.”

Potential star power
The excitement that a candidate with potential creates is able to outweigh the applicant with a proven track record, according to Norton’s research. When tested, the study’s 77 participants gave more favorable scores to the person with potential who answered their questions.

While high-performing employees are easy to identify due to their success in completing projects and assignments and going above and beyond employer expectations, spotting candidates with big potential can be more difficult, according to The New Talent Times.

It may be subtler and take longer to identify because many traits of an employee with high potential can vary on what a company values most. Adaptability to new projects, work routines and time management skills are areas many candidates with probable talents possess along with leadership qualities, according to Centennial Inc. Additionally, on-the-job training can give employees with potential the experience they need while also showing managers what role he or she would best fit in at the company.

Meanwhile, high-performing employees are good staff members for the positions they currently hold, but, they might not exhibit the talent to adapt to new roles in a business. Additionally, a company wouldn’t want to alienate a staffer with a high degree of potential by placing him or her in a role that’s not engaging.

“When performance is the only criteria employees are evaluated on high performers will be the only ones moving up,” Brian Kight, director of performance at consulting firm, Focus 3 told The New Talent Times. “And your high potentials will be moving out.”

Assessing and developing
While a candidate with high potential or one with a high performance record might be more valuable to a business based on its expectations and values of its employees, few candidates or employees will exclusively exhibit just one of the traits. This is why it’s important for hiring managers to assess candidates on a multi-faceted graph listing the pros and cons of both high performance and potential.

Charting out ways to assess these individuals and how to proceed with developing their talents and placing them in the right positions can help companies utilize the workforce to the best of its ability.

Experimenting with giving new assignments or responsibilities to both high-performing and large-potential employees can indicate where their strengths lie.

Mapping out strategies to maximize the best results from each employee and keeping them productive and happy will make for an efficient company. While it might sound time-consuming, identifying workers’ skills and cultivating their potential will help a business hire and retain the talent it needs to remain competitive.

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