Current State

To understand the potential of employees contributing to the future success of the business, employers focus predominately on reviewing, rating and rewarding their employees’ performance, according to Brandon Hall Group research. But even the best performer may not be the best employee for the future. Organizations must learn the best ways to identify and develop potential. 


Only 5% of organizations believe their performance evaluation processes are an accurate predictor of an individual’s future potential. 

That means the talent whom organizations identify as having high potential may not actually have the potential they need. This is why most organizations say their leadership development programs don’t produce leaders who can deliver business impact. Sure, leadership development can get a lot better — but the flip side is that many people in those programs might not have what it takes to be successful in the organization anyway. 

The irony is that most employers know what they must do to better evaluate employee potential. Their performance review processes are simply not set up to do it. 

How Could You Improve Evaluation of Employees’ Potential? 


The performance-management processes used by most organizations focus on what employees have done, not what they can do. There is a huge disconnect between the importance organizations place on understanding potential and their effectiveness in doing so. 

Critical Question

  • What are the qualities employees and leaders must have to make our organization successful in the post-COVID world? 
  • What must we do differently to understand and develop qualities that are more predictive of future success? 

Brandon Hall Group POV

Managers Discuss These Topics Frequently/Always During Employee Check-ins 

Based on our research study, How Do You Predict Future Performance?, and Brandon Hall Group’s experience advising clients on evaluating potential, here are five important strategies for evaluating and understanding employee potential. 

Assess Engagement. 

No matter how good employees are at their jobs or the skills and experiences they bring, they must be engaged with their work, their teammates and the organization to truly have potential to drive future success. If, for example, a talented employee is more focused on pursuits outside of work or is not exhibiting discretionary effort at work, that person may not have as much potential as someone with perhaps less talent or experience who is focused on the job and exhibits behaviors and values that are important for the organization to succeed. Therefore, engagement is a foundational element of potential. 

Enable Stronger Manager-Employee Relationships. 

Engagement can be measured in many ways, including surveys and focus groups. But the best way is for managers to connect with their employees on a regular basis beyond monitoring daily work. Managers must set goals, discuss progress, understand what motivates (and de-motivates) employees, recognize their contributions and create opportunities for them to continue to grow and develop as people and as employees. Managers who build and maintain relationships with their employees have the best chance to more accurately understand their potential. 

For better manager-employee relationships to develop, organizations need to clearly communicate to managers that building these relationships is a significant part of their jobs, create incentives for improvement and hold them accountable. Accountability must be paired with training and support resources to help managers carry out this responsibility. 

Understand Employees’ Capabilities. 

Understanding capabilities is different than evaluating performance. Employees generally have experiences and capabilities beyond what they leverage for their jobs, especially at the lower levels of an organization. Some capabilities can only be learned by getting to know employees and revealing “hidden” capabilities. Getting a full understanding of the skills and competencies employees have is critical for determining potential. 

Understand Employees’ Aspirations for New Experiences. 

Employees could be great performers, be highly engaged, have many capabilities beyond those used in their jobs, but their desire for new experiences beyond their current roles is critical. A person who is an average or slightly above-average performer, but who is engaged and highly motivated to learn new skills and move into new roles, has more potential than someone with high capability and capacity but does not seek to advance in the organization or have new experiences, such as special projects, coaching or mentoring. 

Learn Whether Employees’ Values Are Aligned with the Organization’s. 

An employee could be the most talented person you have ever run across, but if that person does not believe in the organization’s products, business objectives or corporate values — or even has no strong feelings either way — that person may not have the same potential as someone with great skills, high engagement and strong aspirations who actively supports what the organization stands for.

Additional Resource: Building the Business Case for Modern Performance Management

Performance management was broken long before the COVID-19 pandemic. But the pandemic did what years of prior advocacy for performance management reinvention could not: change the focus from annual evaluations to manager-employee interactions. The top focuses now and in the next one to two years, according to Brandon Hall Group’s Performance Management Study, are the frequency and quality of manager-employee check-ins, linking competency and skills to the performance management process, and goal-setting. While the focus on performance management has changed, most organizations still have work to do. This Business Builder serves as a blueprint for building the business case for change in performance management.

Download the Business Builder Now!


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Leading minds in HCM choose Brandon Hall Group to help them build future-proof employee-development plans for the new era. For more than 27 years, we have empowered, recognized and certified excellence in organizations around the world, influencing the development of over 10,000,000 associates and executives.

Claude Werder

Claude Werder oversees Brandon Hall Group's analyst team, new product development, corporate development, the HCM Excellence Conference 2015, publishing, and social media and marketing strategies for Brandon Hall Group. In that role, he manages Brandon Hall Group’s research priorities, Membership Program and Member Center, and Brandon Hall Group’s exclusive KnowledgeBases of research data and HCM solution providers, services and products.