Generally, people earn promotions on the basis of their past performance. The past performance is considered a good indicator of future job success. This could be true if the roles to be played by the promotes are similar. However, in actual practice, the roles that a job holder has played in the past may not be the same if he assumes a different job after his transfer or promotion to a new position. Past performance, therefore may not be a good indicator of the suitability of an indicator for higher role. To overcome this inadequacy, organisations must initiate the process of potential assessment.
Assessing potential is different from assessing performance. Potential refers to the abilities present but not currently utilized. It is the latent capacity to discharge higher responsibilities in future roles. On the other hand, performance implies the extent to which the requirements of the presently held job are being met by the employees.
The main objective of potential assessment is to identify the potential of a given employee to occupy higher positions in the organizational hierarchy and undertake higher responsibilities.
i. To advise the employees about their future prospects.
ii. To advise the employees about what they must do to improve their career prospects.
iii. To help the organization chalk out a suitable succession plan.
iv. To update training efforts from time to time.
The potential of employees can be judged by:
i. Reviewing present performance.
ii. Analyzing personality traits.
iii. Relooking at past experience.
iv. Considering age and qualifications.
v. Explaining unused knowledge and skills of an employee.
Mechanism of Potential Appraisal
Steps to be followed while introducing a Good Potential Assessment system are:
i. Role Description
Organizational roles and functions must be defined. To this end, job descriptions must be prepared for each job.
ii. Qualities needed to perform the role
Based on job descriptions, the roles to be played by people must be prepared ( i.e. technical, managerial jobs and behavioural dimensions).
iii. Rating Mechanism
Besides listing the functions and qualities, the potential assessment system must list mechanisms of judging the qualities of employees such as :
a) Rating by superior
The potential of a candidate could be rated by the immediate supervisor who is acquainted with the candidate’s work and also his technical capabilities.
b) Psychological tests
Managerial and behavioural dimensions can be measured through a battery of psychological tests.
Simulation games and exercises (assessment centre, business games, in-basket, role play etc.) could be used to uncover the potential of the candidate.
d) Performance records
Performance records and ratings of the candidate on his previous jobs could be examined carefully on various dimensions such as initiative, creativity, risk-taking ability, etc. which might play a key role in discharging his duties in a new job.
iv. Organizing the system
After covering the above preliminaries, he must set up a system that will allow the introduction of the scheme smoothly giving answers to some puzzling questions:
a) How much weightage to merit in place of seniority in promotions?
b) How much weightage to each of the performance dimensions – technical, managerial and behavioural qualities?
c) What are the mechanisms of assessing the individual on different indicators of his potential and with what reality?
The system must provide an opportunity for every employee to know the results of his assessment. “he should be helped to understand the qualities actually required for performing the role for which the thinks he has the potential, the mechanisms used by the organizations to appraise his potential and the results of such an appraisal.