Star performers and high-potential employees are hot property in the hierarchy of human capital. But they don’t come cheap and employers often fail to get a good return on their hefty salaries. One of the reasons why, according to David Collings, professor of sustainable business at Trinity College, is a lack of clarity both in terms of what is expected of these individuals and in the high-potential programmes that organisations run to foster future talent.
“Most organisations are actually pretty dissatisfied with the outcomes of their high-potential programmes,” Prof Collings says. “In one study in the US, 68 per cent of organisations considered them ineffective, notwithstanding the considerable investment they were making in them. This is a problem given these are the people their organisations have identified as having the greatest potential to make them successful.”
Recognising the context in which individuals perform is hugely important, Collings says, as there is ample evidence that when stars and high performers move from one context to another, their performance drops. “They have about a 50 per cent chance of retaining their high performance and it can take three to five years to get back up to that original level in a new context,” Prof Collings says.
“There’s also an emerging body of research that suggests organisational performance is not distributed as traditionally thought. So, if you think of it like a standard bell curve, there are a lot of average performers in the middle, a small number of top performers and a small percentage of low performers and the variation in performance between average and top isn’t that great. But the research is showing that, in some contexts, particularly if the work is intellectual or knowledge-based and done by people not machines, the difference in performance between an average and a top performer is much greater.”
In broad terms, the difference between stars and high-potential employees is that stars are stellar individual performers while high-potential employees are those most likely to become leaders in the future. Traditionally, they were treated as separate groups, but in a recent paper authored by Collings and two colleagues from the US, (published at the end of 2022 in Personnel Psychology), they looked at them together in an effort to understand how organisations could better manage their talent.
It may be better to leave the tech wizards and superb salespeople where they do their best work rather than trying to turn them into something they’re not
This involved identifying core assumptions about both, looking at where their skills intersected and at how significant recent trends in the world of work, such as increased employee mobility, a greater focus on diversity, inclusion and equity and changes accelerated by technology are redefining the landscape when it comes to managing stars and high-potential employees.
Collings says one of the problems with existing high-performance programmes is how they measure potential. Many focus on past performance as an indicator of potential, not on metrics that might indicate how a person will perform in future roles.
“With most programmes, the emphasis, and we would say the overemphasis, is on developing individuals for leadership roles,” he says. “This can mean that remarkable individuals who are contributing disproportionately to a business are often forced on to a leadership track because it’s the only way to progress.”
In practice, although these technical wizards or superb salespeople are at the top of their respective games, they don’t necessarily have the competencies to be a leader. Furthermore, they may never develop them even after time spent on a high-performance programme.
“Organisations often use the wrong criteria to put people on to programmes and subsequently into leadership roles and then they’re surprised when they don’t do well,” Prof Collings says. “The starting point should be to put more careful thought into deciding what competencies are required for future roles, honing the selection criteria for high-potential programmes and for how they assess people’s capability to develop the competencies required.”
In Collings’s view, it may be better to leave the tech wizards and superb salespeople where they do their best work rather than trying to turn them into something they’re not. That said, their contributions must still be well recognised and rewarded. For example, through a parallel career pathway that provides professional development and all the benefits of seniority.
“What’s needed is a separate growth path that’s not narrowly defined within the context of a leadership role,” Collings says. “Forcing people on to a leadership track is not a good idea if that’s not what they’re motivated to do. One of the key indicators of a successful leader is somebody who actually wants to do the job.”
Collings adds that other groups not well served by the structure of existing high-potential programmes are women and minorities.
“They are often disadvantaged by the selection process and studies have found that while females were generally rated slightly higher on job performance than males, when the same individuals were assessed in terms of their potential for a promotion, males were generally rated higher. This makes it harder for women to reach the thresholds to be considered either a star or a high performer. However, if they do make it, it’s one of the few situations in which the gender pay gap reverses,” Prof Collings says.
“Interestingly enough, though, a higher compensation package doesn’t seem to make up for other elements of the work experience that make them feel disadvantaged in their organisation. Money doesn’t paper over the cracks in terms of deficiencies in other aspects of their organisation’s HR practices and culture.”