Managing expectations

How to handle high-potential employees when promotions aren’t an option

Companies tend to think of the top three per cent to five per cent of their talent as high-potentials who consistently and significantly outperform their peers, according to a Harvard Business Review article.

“While achieving these superior levels of performance, they exhibit behaviours that reflect their companies’ culture and values in an exemplary manner. Moreover, they show a strong capacity to grow and succeed throughout their careers within an organization — more quickly and effectively than their peer groups do,” wrote Douglas Ready, Jay Conger and Linda Hill in the June 2010 issue.

But what happens after a company has identified a high-potential employee who stands head and shoulders above her peers in terms of performance and attitude? And what if you can’t identify a higher-level job for her?

Companies face a dilemma when they have a great leadership team and high retention rate, but no opportunities for promotion.

Recognition helps with retention

Most HR managers are wary of making promises about future advancement, sometimes to the point of keeping an employee’s high-potential status a secret. That’s a mistake, especially in a competitive and rapidly changing economy — other companies are searching for exactly this type of person. If a company doesn’t recognize superior performance, another employer will.

A high-potential employee stands out due to his attitude, work ethic and innate or developed skills and abilities. His performance results exceed the standard and this should be recognized in a positive manner, immediately and regularly.

Simply recognizing his contribution, by informing him he’s considered a high-potential, will often act as an effective retention tool — as long as his expectations are managed in relation to growth.

If an employer doesn’t acknowledge high-potential employees, it risks losing them or driving their performance underground.

If superior performance is noticed, other employees will also see the potential to earn that recognition. If high-potentials are not recognized, it will not be long before the message “Why work harder, they don’t care?” permeates the work environment.

On the other hand, most organizations have a diverse, multigenerational workforce with different aspirations and expectations that change over time. Not everyone wants vertical movement or feels equipped to succeed or seek the stresses of management.

Start with succession planning

From an organizational perspective, it’s vital to have a succession plan that includes a list of key positions and basic requirements for each. Prepare a list of anticipated vacancies (because of a retirement, promotion or current incumbent performance, for example) in those key positions and when they may occur.

The next step is to identify potential replacements for the key employees as they leave. This can also help an employer develop career paths if more than one step is involved before a high-potential employee is ready for a key position.

Although a high-potential employee may be outperforming others in her current position, it’s important to identify what development is needed for her to be successful in a new position. Will she be a good fit in a different role?

With every change in level, there’s a change in skills required. For instance, delegation skills may not be required at an analyst level but become critical in a job where leadership is expected.

Knowing the skills and abilities that differ among jobs helps in the review of a potential incumbent and the identification of gaps for training and development.

Some sort of bias-free assessment tool should be incorporated into the performance management program. The results can be used as a road map for the individual’s career planning.

Having this information provides a great opportunity to meet with the employee, recognize the contribution she is making and tell her the company is going to work with her to develop the skills needed for future vacancies. If needed, don’t shy away from telling the truth: “There is no vacancy now and I can’t predict when one will occur. But change is inevitable, so be as ready as possible.”

This will lead to an employee who is engaged in her own career development — a plus for retention. A promotion requires the right set of skills and the employee needs to share responsibility for building her skill set.

Once she has developed the skills needed to operate at the higher levels, the organization can open opportunities by:

• setting up a short-term project with clear project direction and goals, along with a clear start and finish date

• moving the employee into a higher-level position on a short-term basis while the current incumbent is assigned to a fixed-length project, allowing you to develop and engage two people at once

• moving the employee laterally to develop (such as a move from marketing to sales to prepare for a sales and marketing leader role).

Ted McNicol is managing director of HR solutions at Vancouver-based HR consulting firm Vertical Bridge Corporate Consulting. For more information, visit

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