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Performance management principles: part 1 – potential

In a 2016 study from LinkedIn, 65% of those surveyed said they would work harder if their achievements and hard work were recognised more. Recognition is a key part of the reward system in the human brain; whether this is recognising patterns in data or objects, or being recognised by others for our achievements.

Welcome to part one of our performance management principles series. This week, we’re looking at potential: what is it, why does it matter, and how can you identify it in your employees?

What is potential?

According to a quick Google search, potential is defined as “latent qualities or abilities that may be developed and lead to future success or usefulness”.

Meanwhile, a 2014 study from Harvard Business Review defines potential as “the ability to adapt to and grow into increasingly complex roles and environments”.

Why is potential important?

The above article goes on to discuss what the author refers to as the “four eras of talent-spotting”:

  • Physical attributes – lasting for most of human civilisation, these attributes respond to survival of the fittest and helped to select who would be best for protecting a social group, constructing a pyramid, or fighting in wars
  • Intelligence and IQ – through much of the 20th century, IQ and intelligence were prioritised, with particular focus on mathematical, logical, and analytical skills
  • Competencies – the 70s and 80s saw the start of increasing technological change and an increase in corporate monopolies. As jobs merged, previous experience ceased to matter, so competencies and emotional intelligence became more important
  • Potential – the dawn of a new era of “volatile, uncertain, ambiguous, and complex” environments. With things changing at a faster rate than ever before, the potential to develop and adjust have become vital

Talent-spotting in this sense refers to both recruitment and understanding the performance and development potential of those inside your organisation.

As technology develops, organisational structures shift, and “jobs for life” exist less and less in the corporate world, the ability to adapt quickly and continuously to change is one of the most sought after skills in the workplace.

How can you identify potential in your employees?

You may find that some employees are lacking potential to grow and develop, but it is important to remember those who perform consistently can still be a great benefit to your organisation; it’s just important to marry up development expectations with their performance.

When it comes to those with high potential, there are different things to look for depending on what it is you are seeking out. Potential doesn’t just mean reaching for leadership or senior roles (although this is important), it can also mean those who can fit in a number of different departments or who can/wish to cross-skill.

1. Potential for leadership

Identifying the potential for leadership comes down to a few simple factors, many of which fall into the realm of soft skills. Soft skills and emotional intelligence are some of the most important attributes of effective leaders as these can keep morale and productivity up within teams as well as improving their work as a unit.

In addition to the hard skills required for the job, some of the skills to look out for are:

  • Clear, concise, and persuasive communication
  • Strong time and priority management
  • Ability to delegate
  • Handling confrontation
  • Stress management
  • Emotional intelligence
  • Active listening

In order for someone to have potential for leadership, they don’t need all of these skills straight away. A selection of them works just fine, with the possibility of growing and developing their other skills through training.

2. Potential for cross-skilling

This is where performance ties in with learning & development. Nurturing a culture of continuous learning in the workplace can do so much to improve morale, engagement, and productivity. YouTube is a great example of people’s need to learn and grow, with millions taking to the site for tutorials each day, ranging in subjects from coding languages through to make up tutorials.

Identifying someone’s potential for cross-skilling comes over time and a huge part of it is their willingness to learn. If someone is keen to learn a new skill, spends time researching their chosen topic, and crops up with little nuggets of information about topics unrelated to their specific department, they may be on the road to cross-skilling.

Whatever your industry, this can be highly valuable as it allows for your people to specialise in new areas and broaden their skillsets. If identified at the right time, it can also improve retention as allowing employees to fulfil their potential in new areas can lead to greater job satisfaction and reduced job-role fatigue.


In the ever-changing working landscape, potential is incredibly important. As organisations shift, new technologies come in, policies develop, and priorities change, being able to recognise the talented individuals, in and out of your organisation, who have the potential to grow and develop into other roles can save time and money, as well as increase staff morale.

Career hopping is becoming more prevalent, so buck the trend and retain your top talent by recognising and nurturing potential sooner rather than later.

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Written by Claire Moloney

Claire is an enthusiastic and meticulous content writer whose passion is to support growth and continual learning for everyone.


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