So you think you’ve got what it takes: measuring potential

Citation

Edwards, R. (2011), "So you think you’ve got what it takes: measuring potential", Strategic HR Review, Vol. 10 No. 6. https://doi.org/10.1108/shr.2011.37210faa.003

So you think you’ve got what it takes: measuring potential

Article Type: Metrics From: Strategic HR Review, Volume 10, Issue 6

The latest ideas on how to approach measurement and evaluation of HR activities

There is an ever-widening range of opinions on how to measure potential. For some, it is about behaviors or competencies, and assessing whether the person is operating in an upper performance quartile. For others, it is about describing behaviors needed for success at different hierarchical levels (such as the Leadership Pipeline model developed by Stephen Drotter) and assessing whether the person is demonstrating behaviors associated with roles above where they are currently deployed.

Whatever the framework, it has to be relevant for your business, bearing in mind that in an ever-changing competitive world the skills required today and for tomorrow may keep changing. This gives real credence to models containing self-awareness and personal development as key elements in assessments of potential.

Human resources (HR) has a long tradition of trying to make objective selection decisions by employing a number of instruments in assessment methodology. All of these are of use but each also has its limitations when it comes to measuring potential. Let’s examine a selection of the most commonly used.

Psychometrics

There is evidence that certain psychometric profiles can be reliable predictors of ability and fit for an imminent role. However, measuring potential for future roles is more difficult. A robust tool that can measure the various types of “intelligence” (e.g., analysis and reasoning) will get you off to a good start and will at least identify people with “power under the hood.” When it comes to personality profiles, these can be helpful but beware of the reliability and validity of each instrument especially as it relates to your specific context.

360-degree feedback

This is frequently used and provides a holistic view of an individual’s capability. There is, however, real concern over its use as an assessment tool, as each person has a different set of raters, each of which has their own perspective and rating standard. For example, raters from an environment where critical feedback is rare (e.g. some Far East cultures) may assess more positively than a more open, critical and competitive culture, even though the individuals are similar. Also, 360-degree feedback relies on a person having had the opportunity to demonstrate each behavior, which, if it is related to a future role, may not yet have been displayed.

Structured interviews

These look for the evidence of past behavior. When done well, they can increase the predictive validity of the assessment process from 0.2 (for a biographical interview) to 0.51 (for a structured interview) (Huffcutt and Arthur, 1994). A positive aspect of this process is that every person assessed is exposed to a structured set of questions that force the person to draw only on what they have done, experienced or learned. A potential limitation has been noted in that introverts frequently do less well in these types of interviews although, if appointed, can often achieve as well as their extravert colleagues.

Assessment/development centers

This is where there needs to be the biggest change of thinking regarding the assessment of potential. Such centers, by their very nature, look at how participants interact with each other and with situations. This means that any individual’s performance will be affected by the others in the group. This is why it is often easy to rank individuals within a center, but sometimes difficult to objectively rank people across centers. To measure potential objectively, each person needs to face a set of challenges and simulations that will allow rating of the potential factors without the interference of external variables (like other participants). This is best achieved by using interactions that are scripted or at least governed by a set of predetermined rules (such as using actors and scenarios). In short, assessment centers still offer a high level of predictive validity (0.53 according to Woodruff (1990)) of potential as long as they are well constructed with a variety of progressive and adaptive simulations.

Psychological assessments

These usually require time spent with an occupational psychologist discussing past experiences and situations to explore drivers, coping mechanisms and values. These fell out of favor as they were seen as very expensive. But, they are re-emerging for identifying potential executive leaders.

In summary, when measuring potential, ensure that you build a business-relevant framework that articulates what it means to have potential for you, ensuring that factors that make people successful today and that can meet future needs are included. Secondly, use a combination of assessment methodologies to ensure a quality result (comprehensive, valid, reliable, differentiating, useful and defensible).

Roger EdwardsBased at Pilat HR Solutions.

About the author

Roger Edwards is Director of Consulting, Pilat HR Solutions. He has over 20 years of line HR management experience in companies such as Ford and GlaxoSmithKline. In his current role he heads up Pilat’s consulting operations, providing HR, talent management and organizational development expertise to clients. Roger Edwards can be contacted at: redwards@pilat.com