Understanding the difference between high potential vs. high performer employees can make a huge difference to your bottom line. A high potential employee provides nearly double the value to an organization, and they’re three times more likely to be successful leaders in the future, according to Gartner research (available to members only).
As Vincent van de Belt, director of Vandebelt & Partners talent management consultancy, points out, “If an organization is not able to distinguish between performance and potential, it will have difficulty identifying talent.”
This happens all the time. Top performers are promoted to sales manager, and they struggle to transition from killing their own sales goals to helping a team of junior reps kill theirs. Meanwhile, the junior rep whose hard work has facilitated the success of sales teams for years feels undervalued, and decides it’s time to start looking for growth opportunities elsewhere. Both scenarios hurt morale and drive turnover.
A manager who understands the difference will be more effective in engaging and retaining employees who exemplify aptitude in one or both. To that end, this article outlines strategies any manager can use to identify, assess, and develop high potentials and high performers.
Identifying high performers and high potentials
High performers stand out from average performers in any organization. They consistently exceed expectations and are management’s go-to people for difficult projects because they have a track record of getting the job done. They’re great at their job and take pride in their accomplishments, but may not have the potential (or the desire) to succeed in a higher-level role or to tackle more advanced work.
High potentials are birds of a different feather. Malcolm Munro, founder and CEO at Boss Builders, says that, “High potentials have demonstrated initial aptitude for their technical abilities and… have future potential to make a big impact.” In short, they can do more for the organization—possibly much more. (With the one caveat that high potentials who are consistently low performers are rarely strong candidates for management roles.)
High potentials can be difficult to identify, for two reasons:
- First, high performance is so blindingly easy to observe that it drowns out the less obvious attributes and behaviors that characterize high potentials—such as change management or learning capabilities.
- Second, few organizations codify the attributes and competencies they value in their ideal employees—which means that managers don’t know precisely what to look for to assess potential.
As a result, most managers focus exclusively on performance, and that can be a problem.
When performance is the only criteria employees are evaluated on, high performers will be the only ones moving up—and high potentials will move out.
Make no mistake, you should definitely value and reward performance. If your end goal is to build a more robust talent pipeline, though, performance can’t be the only point of entry.
Our advice: Work with leadership to profile what constitutes excellence in key roles, and then communicate that to managers to help them identify high potentials.
Assessing performance vs. potential
Because employees possess varying degrees of performance and potential, you should assess your employees across both dimensions. Here’s a framework for identifying where an employee falls in the spectrum.
| High performance |
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| Low performance |
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| Low potential | High potential |
According to van de Belt, “Each of these categories requires a specific approach when it comes to discussing development opportunities.” After you’ve determined which quadrant an employee falls into, you can create a plan for employee development.
Development strategies
In an ideal world, every employee in your organization would be a high performer with high potential—but that’s obviously not realistic.
The appropriate question in the short term is whether or not you want to move an employee toward the upper-right quadrant, or at least to the high-performance tier.
It’s not always possible, nor always the desired goal—you might want to keep your high performers right where they are, for instance. There’s no one-size-fits-all strategy, but here’s a general framework for strategies to consider:
| High performance |
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| Low performance |
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| Low potential | High potential |
“High performers need constant encouragement and challenging assignments. Recognition is key,” says Munro.
As such, high performers tend to want something to execute on a bigger scale. Give them the independence and autonomy that allows them to thrive, and engage them with projects that they can take full ownership of.
Munro also suggests pairing high-potential employees with established high performers who can serve as mentors: “They need to know that while they are high potential, they need seasoning. On-the-job training is a great way to accomplish this.”
As they develop a stronger understanding of the organization and their role in it, test the capabilities of high potentials with tasks such as:
- Managing more projects
- Training new hires
- Taking charge of one or two interns
- Participating in cross-training opportunities
If they do well, consider moving them into a different role—perhaps one with more responsibilities—in which they may perform better.
A stronger talent pipeline for a stronger company
As a people manager, you play a major role in building a pipeline of thriving talent, and it’s increasingly important that you do this successfully.
While employee development is no cakewalk, failure to assess performance versus potential is a very real business problem.
The good news is that it’s a solvable problem. It simply takes dedication to identifying your high potential and high performing employees, assessing their competencies and attributes, and putting them on the path to success. It’s time well spent.
For more resources on HR and talent management strategies, check out the following articles:
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