Potential Assessment

What potential assessment is

Potential assessment (تقييم الإمكانات), in human resources management, is an estimate of an employee’s ability to succeed in a role larger than, or different from, the current one. It rests on evidence collected for that purpose and judged against a written rule. It does not ask “how did the employee perform?”, which is the question of performance appraisal. It asks what is expected of the person in a situation not yet encountered.

It is a judgement about the future that rests on clues from the present, not a fact by which an employee is measured as height is measured. Its result is taken as an estimate open to revision, not as a final judgement on a person.

For which role is potential estimated?

There is no potential in the abstract. An employee may have high capacity for a supervisory role and lack what a deeper specialist role needs, and the reverse. So the assessment begins by naming the role in view and the capabilities it demands. The role can come from succession planning, which is the identification of critical positions and the preparation of replacements before they fall vacant. An assessment with no role produces a courtesy remark of the kind “has great potential”, and nobody knows what to do with it.

The dimensions examined come from the definition of the high potential employee (HiPo): capacity to learn in a new situation, willingness to take wider responsibility, effect on others, and acting under ambiguity. These are the four dimensions on which the example below is built, and we do not say they are the only possible list.

Potential and readiness

Potential is capacity to reach a role over time, and readiness is capacity to perform the role now or within a short period. An employee of high potential for a manager’s role may not be ready for it today, and an employee ready for a role may not have potential that reaches beyond it. Both are written in the assessment for the role in view: high potential, and readiness after a year, for instance, so that what is needed to turn the first into the second becomes clear. We adopt this distinction in presenting the assessment, and we do not base it on a reference.

What evidence the assessment rests on

Evidence varies in strength, and a strong assessment gathers more than one kind:

• The manager’s opinion alone. It is the weakest of these, because the manager sees the employee from a single viewpoint and is influenced by the employee’s current performance.
• Opinions from several viewpoints. The 360 degree appraisal collects them from the manager, colleagues and subordinates, and it reveals what the manager does not see.
• Exercises designed for the purpose. One arrangement is the assessment centre, in which trained assessors observe each trait in more than one exercise.
• Performance in an actual assignment. The employee takes over the tasks of another job for a stated period without being appointed to it. This is an acting assignment, one of whose uses is to test the readiness of an internal candidate for a higher role. It reflects real work most directly, because it happens at work and not in a hall.

One question is put to each piece of evidence: has anyone observed it in a situation like the role in view? An employee’s behaviour on a project that the employee has grown used to says nothing about behaviour in what the employee has not met.

How a rating scale is described

A grade written as a number says nothing unless it is defined. So each level is described by behaviour that can be observed. An example is a scale for the dimension “learning in a new situation” on four levels:

• 1. The employee needs every step explained and repeats the same mistake in a similar situation.
• 2. The employee learns what is explained and applies it in a situation like the one learned from.
• 3. The employee learns from a new situation by reviewing what happened, and applies it in a situation that differs from it.
• 4. The employee looks for new situations and teaches others what was drawn from them.

A similar scale is written for each dimension, and the assessor is then asked to name an incident that the assessor observed in support of the grade. A grade of “3” with no incident is not accepted, because potential has no evidence except what is written.

Two employees on four dimensions

Suppose a supervisory role that requires at least level 3 in each of the four dimensions, on a scale from 1 to 4. The assessors rated two hypothetical employees:

• The first employee: 3, 3, 3 and 2, with an average of (3 + 3 + 3 + 2) ÷ 4 = 2.75.
• The second employee: 4, 4, 4 and 1, with an average of (4 + 4 + 4 + 1) ÷ 4 = 3.25.

Ranked by average, the second employee would come first, although the fourth dimension stands at 1, two levels below what the role demands. The first employee falls short by one level in one dimension. The average hides that what this role requires is a set of conditions, all necessary, and not a sum of points. Our reading is that each dimension is examined first against what the role requires, and the average is calculated only afterwards, for the sake of display.

From the result, what is needed becomes clear. The first employee needs a plan to raise one dimension. The second employee needs another question: is the weak dimension one that training can develop within a reasonable time, or is it what makes the role unsuitable for that person? This is a judgement that arithmetic does not settle.

How an organisation avoids disagreement between assessors

Two assessors may rate the same employee and differ. If one rates a dimension at 4 and the other at 2, the difference is two levels. If the average is taken, the result is 3, a figure that neither of them stated. The better course is to ask each of them about the evidence: what did you see, and when? It may emerge that the first saw the employee on a familiar project and the second in a new situation, so the difference lies in the situations and not in opinion.

This is the work of performance calibration, a session in which the assessors agree on the meaning of each grade through shared examples before the grades are closed. It suits potential as it suits performance, and our reading is that the need is greater for potential, because potential has no results to measure, so it depends on the assessors’ agreement on what counts as evidence.

Who assesses potential, and at what intervals

The direct manager assesses, being the closest to the work, and an assessor is added who is not in the employee’s direct line, so that the assessment is not the opinion of one person. Human resources keeps the framework and the evidence, and does not replace the people who have seen the employee at work. The assessment is made on a fixed date, and again at an event that changes the picture, such as a new acting assignment or a change of role.

It is not repeated every month, because repeating an assessment makes it swayed by the latest event. In our estimate an annual review, in which newly available evidence is added, is enough.

What spoils a potential assessment

• Taking current performance as evidence of potential. Someone promoted for mastering the present job may reach a role they cannot do, which is the observation on which the Peter principle rests. The criterion for promotion and the demands of the higher role are two different things.
• The effect of a single impression. The assessor is pleased with one skill and raises the other dimensions, which is the halo and horn effect. The remedy begins with a form that rates each dimension separately with its evidence.
• Similarity to the assessor. An assessor may lean toward someone who resembles the assessor in career path and style, and see greater potential in that person.
• A fixed classification. An employee is assessed once and stays at that rating for years, although the employee’s circumstances and wishes change.
• An assessment with no use. The effort is made and then the paper stays in a file.

Showing performance and potential on one grid

The result of the two dimensions, performance and potential, is displayed on the 9 box grid, a tool in which a placement needs two figures, so it obliges its user to judge each dimension independently. What fills the potential axis of the grid is the output of the assessment described above. The grid does not replace that assessment, because a handsome picture of a weak assessment remains weak.

How to tell whether a potential assessment was sound

Soundness can be established only by waiting and then comparing with what happened. Suppose 10 hypothetical employees were assessed as ready for a higher role after a year, and after two years 6 of them had moved into the role and 5 had succeeded. The success rate among those who moved is 5 ÷ 6 × 100 = 83.3%. The figure alone does not judge the assessment: for the four who were not moved we do not know what would have happened, and six employees is a small number. Before all that, success must be defined in advance, because if the meaning of success is fixed after the result is seen, it can be found to have been achieved in every case.

In each cycle the assessment is compared with what happened to those who were assessed, and if a particular dimension proves to mispredict, its scale and its evidence are reviewed. This is what turns the assessment from an annual routine into a tool that improves.

How the assessment is used once it is issued

The first use is to connect it to a plan for the employee concerned. An employee found weak in the fourth dimension needs a plan to develop it, an individual development plan, which names that dimension, the activities to raise it and a review after a set time. An assessment that is issued and followed by nothing lets the employee see that it was not made in the employee’s interest.

The second use is to understand that it is not a promise. A high assessment does not mean promotion, because the role may not be vacant and because the assessment is reviewed. Without that understanding, every delay may be felt as a disappointment and every slow step as unfair. What the assessment means and does not mean is written down when the employee is informed, and the result is reviewed on a set date, because what was a good estimate of an employee a year ago may not hold today.

This is an explanation of the concept, not legal advice.