Friday, February 6, 2015

Digital Master Tuning XXXIII: Performance vs. Potential - Which One is More Crucial

Performance keeps the business running, and potential moves the business to the next level.

Performance is how someone has performed in the past plus the present in various related contexts/ jobs. The potential is how one might perform in a different context or within the same context as a result of growth, maturity, skill development, or capability shaping etc. Performance keeps the business running; and potential moves the business to the next level; so performance vs. potential, how shall you assess them objectively; are organizations really buying-in to talent development? In this day and age of instant up-to-the-minute information of stock performance and earnings reports that are due on a quarterly basis, what are the real odds of companies that actually put in the time to develop their human capital so employees would achieve their full potential, and ultimately organizations can grow into a Digital Master?

The potential is very different from performance. Performance is well done of current assignments and demonstrated the capacity of doing great work. However, do not assume though that top performers are the “top talent” for the future. High performers may be at the top of their game at the moment, but the question is how well will they adapt to changes, having learning agility or their innate capability. This is where potential comes into play. Potential is about future performance, not past performance. How well does the individual continue to perform and grow in their current roles, how likely are they to take on new challenges at work, rapidly learn and grow into next-level roles, or roles that are expanded and redefined as business changes? Individuals showing potential are distinguished usually by their mastery of new roles quickly and effectively, learning more rapidly than their peers, more innovative, taking initiative proactively, and presenting emotional maturity in dealing with others.

Depending on what you are looking for, performance and potential do both play important roles in the organization. Performance keeps your business running, churning numbers etc, whereas potential looks at the employee that can bring your company to the next level, they usually fall into your talent employee grouping. Potential is the ability and interest to take on more responsibilities in the future which is displayed by their thought leadership or exemplified behavior ; it is to do with one’s reputation so it is qualitative whereas performance stands for expectations for current job & grade so it is to do with the action and, therefore, can be quantified. Potential does have quantitative elements in it too, depending on what tools you use to assess employees potential.

What gets more important depends on the purpose, moreover they go hand in hand. High performers are great at their job and take pride in their accomplishments, but may not have the potential - nor the aspiration - to succeed in a higher-level role or to tackle more complex work. High potentials have demonstrated consistent strategic insight or technical abilities and have future potential to lead and make a big impact. The fair reason for hiring self-motivated people is mainly not to cut cost, but let them work independently with minimal interference and guidance so that they think strategically new ways and means precisely " out of the box" techniques to enhance growth for themselves as individuals and for the company per se. Potential includes your ability to perform in the future and that's what really matters when you have to make a decision. The potential is an investment, employees with potential haven't performed to level where there is the actual performance in all the areas desirable.

Pygmalion Effect. The mere fact that you expect someone to have "more potential" causes you to treat them in a way that they actually do perform better. Why not establish personal and team baselines and always expect the best from everyone? You will see more qualitative and quantitative improvement from a much greater base in your organization. Measure performance, provide feedback, and allow each to exercise creative initiative in relation to how their work is done, and then recognize improvement. It is also true and very important that a company has a lot of responsibility on how potential can be deployed. The top management and the HR must do all their best in order to take advantage of high potential people, putting them in conditions to transform it in results.

In today's world, one’s business should feel blessed if they got one employee who is self-motivated to utilize his/her full potential to set targets independently to achieve business goals and yield returns in quantitative terms - performance. Performance is mostly a mix of past and present; potential relates to the innate talent and capability of employees. The importance of potential really depends on how & what the organization is utilizing potential for. So, the true aspect of any talent management strategy is to ensure that the true potential of the employees is transformed into performance.

Digitalization is like a flywheel, and Digital Masters are the one riding above it. Surf more Information about Digital Master:


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