?

Basics of Potential Management

Subject: BASICS OF POTENTIAL MANAGEMENT Credits: 4

SYLLABUS

Potential Management: Definition, The Anatomy of a High Potential, Factors of High Potentials, Potential
analysis, Importance of Potential analysis, Business Potential, Potential Management Considerations, Potential
Management Strategies, Employee engagement in potential building programs, The capability approach.

Potential Analysis: Quality criteria of a potential analysis, Importance of the potential analysis, Objectives of
potential analysis, Employee selection criteria, Quality features of potential analysis, Risk, Potential Analysis
Tools, Potential problem analysis.

Importance of Potential Management: Mistakes in Potential Management, Moving away from the Mistakes,
Steps for getting started.

Business Potential: Identify Potential Business Customers, Components of Business Viability Analysis .

Potential Management Considerations: recommendations the study, Considerations for Potential Business
partner, Considerations dealing with Potential Investors, Considerations for Potential Participants.

Potential Management Strategies: Brief overview on Potential Management Strategies, strategies initiate to
boost morale and engagement.
Retaining High Potential Employees: Engaging Top Talent, Managing for Performance, Winning the Retention
Game, ways to retain high-potential employees.

How To Manage High Potential Employees, top tips for effectively managing, Nurture High Potential
Employees, recommendations the study offers for creatively corralling high potential employees: Tips for
managing high potentials, Maximizing Employee Potential.

Developing Employee Potential, Understanding Job Fit, Steps for Developing Employee Potential, Steps for
Developing Strengths in Employees.

High Potentials v/s High Performers: Identifying High Performers and High Potentials, Assessing Performance
vs. Potential, Development Strategies, difference between high-performers and high-potentials.

Employee Engagement in Potential Building Programs: tips leaders can use to identify, re-engage, and more
effectively manage high-potential employees, defining a high-potential, unlock high potential in employees,
objectives of potential developing programs, High Potential Program Design.

Capability Approach: Assessing capability, Functionings, Capabilities, Nussbaum's central capabilities, core
capabilities Nussbaum argues supported by all democracies, The measurement of human capabilities- General
overview- Women and cultural universals- Monetary vs. nonmonetary measures of well-being- Critique of
output-based measures, Capabilities-based indices.
Suggested Reading:

1. Jump up to: a b c "Opening Address at a Meeting on Issues to Create a Reserve Pool of Management
Personnel". Gorki, Moscow Oblast: President of Russia.
2. Jump up to: a b c Elder, Miriam. "Russian president Dmitry Medvedev poised to replace officials loyal
to Vladimir Putin". Moscow: The Daily Telegraph.
3. "Only 11 women among Medvedev's top 100". Russia Today.
4. Jump up “A list of the first hundred members of the high-potential managerial pool, selected under the
auspices of the Russian President, has been announced.". Presidential Press and Information Office.
 CONTENT

Chapter 1: Defining Potential

Chapter 2: Potential Analysis

Chapter 3: Importance of Potential Management

Chapter 4: Business Potential

Chapter 5: Potential Management Considerations

Chapter 6: Potential Management Strategies

Chapter 7: Retaining High Potential Employees

Chapter 8: How To Manage High Potential Employees

Chapter 9: Developing Employee Potential

Chapter 10: High Potentials v/s High Performers

Chapter 11: Employee Engagement in Potential Building Programs

Chapter 12: Capability Approach

 Chapter 1
Defining Potential

What is potential? In the context potential refers to the range of outcomes of any one situation.
Whether any of these outcomes actually occur depends on the configuration of conditions and
protective measures that coincide with the exposure. While the potential outcomes for many
exposures can range from "nothing bad happens" to fatality, the probability of every potential
outcome is not the same. Some exposures have higher potential than others for a life altering
injury, fatality or catastrophic event, and if we do not recognize the difference in likelihood of
serious outcome that occurs in different exposures our approach to managing safety will not be
effective. When we consider the probability of different exposures to cause a life altering injury,
fatality or catastrophe we are much better positioned to allocate appropriate resources and
oversight.

Are You a High Potential?

Some employees are more talented than others. That‘s a fact of organizational life that few
executives and HR managers would dispute. The more debatable point is how to treat the people
who appear to have the highest potential. Opponents of special treatment argue that all
employees are talented in some way and, therefore, all should receive equal opportunities for
growth. Devoting a disproportionate amount of energy and resources to a select few, their
thinking goes, might cause you to overlook the potential contributions of the many. But the
disagreement doesn‘t stop there. Some executives say that a company‘s list of high potentials—
and the process for creating it—should be a closely guarded secret. After all, why dampen
motivation among the roughly 95% of employees who aren‘t on the list?
Should You Tell Her She‘s a High Potential?
Whether or not a company should make its list of high potentials transparent is an evergreen
question. In our surveys of 45 company policies and in our work with firms during the past 15 to
20 years, we have found a growing trend toward transparency. The percentage of companies that
inform high potentials of their status has risen from 70% about a decade ago to 85% today.
Employers, we believe, are coming to see talent as a strategic resource that, like other types of
capital, can move around. Executives are tired of exit interviews in which promising employees
say, ―If I had known you had plans for me and were serious about following through, I would
have stayed.‖
Nevertheless, making your list of high potentials transparent increases the pressure to do
something with the people who are on it. If you tell someone you view her as a future leader, you
need to back that up with tangible progress in her professional development. Otherwise, she may
feel manipulated and even lose motivation. In one case, we witnessed a near riot at a company
offsite, where a group of high potentials said they felt ―played‖—that their status was just a
retention tactic, with no real plans to promote them. Either approach has risks: If you don‘t make
the list public, you might lose your best performers; if you opt for transparency, you‘ll heighten
the expectation of action.
For the past 15 to 20 years, we‘ve been studying programs for high-potential leaders. Most
recently we surveyed 45 companies worldwide about how they identify and develop these
people. We then interviewed HR executives at a dozen of those companies to gain insights about
the experiences they provide for high potentials and about the criteria for getting and staying on
the list. Then, guided by input from HR leaders, we met with and interviewed managers they‘d
designated as rising stars.
Our research makes clear that high-potential talent lists exist, whether or not companies
acknowledge them and whether the process for developing them is formal or informal. Of the
companies we studied, 98% reported that they purposefully identify high potentials. Especially
when resources are constrained, companies do place disproportionate attention on developing the
people they think will lead their organizations into the future.
So you might be asking yourself, ―How do I get—and stay—on my company‘s high-potential
list?‖ This article can help you begin to answer that question. Think of it as a letter to the
millions of smart, competent, hardworking, trustworthy employees who are progressing through
their careers with some degree of satisfaction but are still wondering how to get where they
really want to go. We‘ll look at the specific qualities of managers whose firms identified them as
having made the grade.

The Anatomy of a High Potential

Let‘s begin with our definition of a high-potential employee. Your company may have a
different definition or might not even officially distinguish high potentials from other employees.
However, our research has shown that companies tend to think of the top 3% to 5% of their
talent in these terms:
―High potentials consistently and significantly outperform their peer groups in a variety of
settings and circumstances. While achieving these superior levels of performance, they exhibit
behaviors 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.‖
Anatomy of a High Potential
High potentials always deliver strong results, master new types of expertise, and recognize that
behavior counts. But it‘s their intangible X factors that truly distinguish them from the pack.

The Four X Factors of High Potentials

1. Drive to excel
2. Catalytic learning capability
3. Enterprising spirit
4. Dynamic sensors
That's the basic anatomy of a high potential. Gaining membership in this elite group starts with
three essential elements.

Deliver strong results—credibly.

Making your numbers is important, but it isn‘t enough. You‘ll never get on a high-potential list if
you don‘t perform with distinction or if your results come at the expense of someone else.
Competence is the baseline quality for high performance. But you also need to prove your
credibility. That means building trust and confidence among your colleagues and, thereby,
influencing a wide array of stakeholders.

Potential analysis

Potential analysis describes the structural examination of specific characteristics and

competencies. Potential analysis´ provide information about abilities of employees, future
events, methods or organizations. Due to that the analysis of the branch of production, the
financial sphere, the research & development and the Human resources is differentiated.
A company might analyze its own potential (productivity, market position) by comparing it to
those of the competitors (Benchmarking). A market can be analyzed to estimate its potential for a
certain product. Processes can be structurally analyzed due to their optimization.

Importance of Potential Management

There are five mistakes that leaders make that can cause them to ignore or overlook significant
potential:
1. Judging an incident‘s potential by the severity of the injury
2. Assuming that lagging indicators show the total potential that exists organization wide
3. Believing that all injuries and exposures have the same potential to be serious or fatal
4. Devoting a disproportionate amount of resources to relatively low value-added injury
investigations and not applying adequate resources to high potential near miss events
5. Implementing systems that reinforce focus on measuring outcome instead of potential

Business Potential
How we can help unlock your business potential
Organizations need knowledge to succeed. And in business today, knowledge has never been
more important.
Knowledge is the most important tool businesses use to overtake their rivals. Better knowledge
means better products, better processes, better management tools, better values and better
behaviours – throughout a business. But perhaps most importantly, better knowledge can mean
developing a unique company, a key ingredient in outstanding success.
Too often, however, the unique knowledge that businesses possess goes to waste, while other
knowledge that could dramatically improve how they work is never imported from outside.
Potential Management Considerations

Of course all employees are valuable and should be treated accordingly, but in most workplaces
there are certain staffers that are disproportionately valuable in comparison to their
compensation. It‘s wonderful to have one or two of these rare albatrosses on staff, but you can
move your company ahead by leaps and bounds if you can build teams of high potential
employees.
High potential talent is, as defined by a recent study on Strategic Human Resources
Management, ―employees whose particular skills and knowledge value make them vital to
organizational success.‖ The study added, ―High potential employees are highly talented and
create a disproportional amount of value from the resources made available to them by the
organization.‖

POTENTIAL MANAGEMENT STRATEGIES

At a time when experts agree that homegrown talent is especially crucial, why are HR
professionals having so much difficulty identifying, retaining and preparing the best and the
brightest? Why are so many talented prospects dissatisfied?
First, researchers see a huge divide between what employers think motivates high-potentials and
what actually motivates them. Employers cite lists of what "we‘ve given them," including
outstanding remuneration, to demonstrate the strengths of their programs. These include
opportunities to more directly influence and direct their careers and more-challenging
assignments with real risks and rewards."
Second, high-potentials need smarts and experience to thrive, but ability and seasoning are only
part of the recipe. "We know from our benchmarking studies that high-potentials don‘t fail
because they lack ability," says Jean Martin, executive director of the Corporate Leadership
Council. "Most don‘t succeed because they are not engaged and because the assignment they‘re
in is not what they want."
Retaining High Potential Employees

Retention of talent, according to a Towers Watson study, is the second more troublesome area
for employers in India, after talent sourcing. If we try to correlate the market conditions of 2012
with the challenges employers are facing, it is a mixed bag. On one hand, the employees are
holding on to their jobs since the ‗external market‘ isn‘t too friendly, whereas the exodus of key
talent continues to beleaguer the employers in India. This brings us to the key question – Why do
high performers leave? What are the triggers that drive them to look out for better options? In the
absence of transparent measurement systems, it is difficult to have clear answers to such
questions. One of the consequences of this issue is the shift of limelight from exit interviews to
stay interviews. Stay interviews provide constructive information that can be utilized to pre-empt
and prevent future attrition of high performers (HIPOs). Another interesting feature of HIPO
churn is that the reasons that make them stay are not always the attraction in the job offer for
which they leave.

How to manage high-potential employees

A big part of a manager‘s job is to identify who is contributing to the overall success of the
company and who needs to pull their socks up.
However, the temptation is to concentrate too much on the staff members who need the most
help, while allowing high-potential employees to regulate themselves.
While they may enjoy the freedom to begin with, if left to their own devices too long they could
suffer from a lack of motivation.
This can result from them feeling ignored, overworked and underappreciated, which in a worst-
case scenario could see them fleeing to your biggest competitor.
Here are some top tips for effectively managing your rising stars, ensuring they achieve their full
potential and remain satisfied in their job.
Developing Employee Potential

Employee development is not just the responsibility of the employee. In today‘s diverse
workforce, business practices have evolved to reflect economic competitiveness in developing
and retaining talented employees. Organizations are continually seeking new solutions to assess,
understand, and strategize employee development. One of the greatest challenges faced by
managers is the strategic personal development of their employees in order to ensure effective
use of their talent. To properly manage this vital resource, they must identify their challenges and
then implement employee development and training for improvement. Profiles International‘s
employee development solutions will help managers effectively manage, motivate, and empower
employees.

High Potentials vs. High Performers

Mistaking a high-performing employee for a high-potential employee can be costly. As Vincent
van de Belt, a consultant at Cubiks, points out, ―If an organization is not able to distinguish
between performance and potential, it will have difficulty identifying talent.‖
This happens all the time. A top-performing sales rep is promoted to sales manager, and
struggles to transition from killing his sales goals to helping a team of junior reps kill theirs.
Meanwhile, the junior rep whose hard work has facilitated the success of sales teams for years
feels undervalued, and decides it‘s time to start looking for growth opportunities elsewhere. Both
scenarios hurt morale and drive turnover.
Performance and potential are not mutually exclusive. Van de Belt suggests that ―people always
possess a combination of both.‖
But a manager who understands the difference will be more effective in engaging and retaining
employees who exemplify aptitude in one or both. To that end, this article outlines strategies any
manager can apply to identify, assess, and develop high potentials and high performers.

Employee Engagement In Potential Building Programs

Employees aren‘t human capital assets or resources—they are unique and talented individuals
entitled to respect and the pursuit of purpose in their lives. They congregate in organizations to
perform meaningful work in a community with others of like mind to achieve their own goals
and to make a difference in the world or in other peoples‘ lives. And they like to feel good about
and enjoy the time they spend working in those organizations.

The Capability Approach

The capability approach (also referred to as the capabilities approach) is an economic theory
conceived in the 1980s as an approach to welfare economics. In this approach, Amartya
Sen brings together a range of ideas that were hitherto excluded from (or inadequately
formulated in) traditional approaches to the economics of welfare. The core focus of the
capability approach is on what individuals are able to do (i.e., capable of).
 Chapter 2
Potential Analysis

Potential analysis
Potential analysis describes the structural examination of specific characteristics and
competencies. Potential analysis´ provide information about abilities of employees, future
events, methods or organizations. Due to that the analysis of the branch of production, the
financial sphere, the research & development and the Human resources is differentiated.
A company might analyze its own potential (productivity, market position) by comparing it to
those of the competitors (Benchmarking). A market can be analyzed to estimate its potential for a
certain product. Processes can be structurally analyzed due to their optimization.
Quality criteria of a potential analysis
The bases of a qualitative potential analysis are the following quality criteria that need to be
fulfilled for any kind of potential analysis.
Validity
Validity should show that the used potential analysis tool is suitable and whether the significance
of the examination of future executives is established or not.
Reliability
Reliability in potential analysis means to make tests comparable. The potential analysis tools
should have the same result after being carried out several times.
Objectivity
The quality criteria objectivity should ensure that the results of potential analysis´ were not
disturbed by personal influences.[2]

Potential Analysis in the Talent Management

Importance of the potential analysis
The Potential Analysis in Human resources is pioneering as a part of a goal- and future-oriented
talent management. Talent Management characterizes the acquisition, development and long-
term retention of qualified employees. Due to the future demographic change the ―war for
talents‖, which is searching and retaining future talents/executives will be intensified.
Furthermore employers have to offer certain attractivity. Nowadays transparent career paths and
conveying processes are more important than solely high wages. Talents or ―High potentials‖
need to have a professional perspective, otherwise they will leave the company they are working
for or even the country. Every year a high number of well-educated persons leave their home
country. This knowledge-migration needs to be avoided and thus the potential analysis becomes
even more important. Talents need to be acquired, their skills must be developed and in the end
talents should be retained in companies.

Objectives of potential analysis

The objectives of potential analysis are mainly based on the punctual identification, development
and retention of talents or future high potentials. Potential analysis´ are used to identify talents,
who cannot be identified by school or college grades but for example in terms of social
competence, flexibility or emotional behavior. Using potential analysis, companies intend to
achieve the optimal fit of individual – job and organization. This means, an employee has to fit
his job and purpose, and the company and its corporate culture. Concerning costs, miscasts
should furthermore be avoided. For professionals, costs due to miscast amount to 50% of the
annual salary plus wage labor costs whereas for executives costs are a total of 75%-100% of the
annual salary plus wage labor costs. In addition, the company‘s future competitiveness and
efficiency should be improved as well as the attractivity as employer in the mentioned ―war for
talents‖.[5][6][7]

Employee selection criteria

Subsequent selection criteria of potential analysis´ are going to be explained. The selection
criteria of employees are based on characteristics such as methodological expertise, social
competence, professional competence as well as critical thinking and competence in
modification. All these characteristics are regarded as a part of an employee‘s potential. Because
of the fact that these characteristics are difficult to measure, subordinate criteria are assigned.
Due to a multitude of criteria, the division into cognitive, motivational and social interaction
criteria is used to make this multitude comprehensible. Cognitive criteria describe criteria that
can be observed like organization, problem-solving and flexibility. Leadership motivation,
stress-coping and self-confidence characterize motivational criteria whereas communication,
teamwork and empathy belong to social-interactive criteria. The choice of the selection criteria is
substantial to what extent potential analysis is accomplished carefully. The professional
differentiation of criteria out of future strategic requirements should be done by Human resource
management. Conclusively, the careful selection of criteria is founded on the knowledge about
the target group. In cases of a university graduate other criteria should be examined in
comparison to a professional who wants to become an executive.[5]
Quality features of potential analysis
In the preceding part quality criteria of potential analysis´ were described. In the following
features which have to be fulfilled to ensure a qualitative and professional implementation of
potential analysis´ in Human Resources are pronounced. First of all Human Resource managers
should combine various methods to identify more specific characteristics and skills of a
candidate. To achieve the already mentioned optimal fit of individual – job and organization, an
orientation of the candidates target profile and the competencies are needed for a job. Therefore
it is significant that a precise definition of the examined competencies is given. A qualitatively
good potential analysis is based on a solid preparation, requiring a certain period of time.
Potential analyses of single candidates require one day whereas the analysis of a group needs up
to three days. According to the mentioned time and preparation aspect, it becomes obvious that
both the Human resources and the candidates need to be prepared and introduced to the topic of
potential analysis. Furthermore it is important that candidates have the possibility to get feedback
and an explanation where their strengths and weaknesses are situated.[6]

Risk[
Companies, which ignore the demographic and social changes and do not recognize that their
future economic competitiveness and efficiency is based on talented and highly qualified
employees, are risk-prone. Not identifying ―High potentials‖ and developing their skills, leads to
an insufficient and unsatisfying succession planning and in the end to failed employee retention.
Employees, who are aware of their competencies and who do not have the possibility to develop
those by taking the next step on career paths, will leave a company immediately. In association
with a failed retention and high fluctuation companies are facing enormous costs due to the
already mentioned miscast of employees. Potential analysis and transparent career paths can
avoid this problem. Companies with a good reputation have less problems with obtaining young
and skilled employees, while companies with a negative image are confronted with the problem
of requiring but not getting talented, highly qualified employees. A problem that might cause
risks, considering the future ―war for talents‖

Potential Analysis Tools

Potential Analysis in Human resources uses numerous tools to examine a person´s potential. On
this occasion it is important to know that potential analysis´ are always target-group specific and
business-specific. Banks use other tools and selection criteria than an advertising agency.

Tests
Tests are the simplest and most standardized procedures for potential evaluation. They are
considered to be observer-neutral and objective. For this reason test are the most commonly used
potential analysis tools. Tests can be distinguished into intelligence tests, performance tests and
personality tests.
Intelligence test
Intelligence tests measure intellectual abilities like mathematical analogies in which the quality
and quickness of question-solving is crucial. Intelligence tests belong to the tests with a high
validity.
Performance test
Performance tests are used to determine special abilities such as the ability to concentrate and
responsiveness. These types of tests are used for the potential evaluation for jobs with high,
specific requirements..
Personality test
Measuring emotional, motivational and interpersonal characteristics is the purpose of personality
tests. The results of this test are compared to those of a reference-population.[5]

Interviews
In potential analysis interviews are largely distributed and are highly accepted by all persons who
are involved. The validity of interviews varies substantially in dependence of the used method.
Interviews can be divided into biographical and multimodal interviews.
Biographical Interview
By using this kind of biographical interviews the self-interpretation of one owns biography is
essential. The interviewed person should evaluate its own strengths and weaknesses. By that the
behavioral pattern of the interviewed should be determined.
Multimodal Interview
A multimodal interview is a semi-structured type of interview which combines a series of
standardized and unconcealed interview sections.[8]
Assessment Center
Assessment-Center are highly-structured procedures which are characterized by independent
exercises. By using this tool, a realistic simulation of important professional tasks is given.
Assessment-Center are usually group-processes with high validity and acceptance of the
involved people.
Single-Assessment and Hearing
Single-Assessments are structured procedures which combine various instruments and last
several hours. It is mainly used to select junior-specialist or experts. After passing the single-
assessment the candidate speak to a committee of future superiors, colleagues and the board of
directors.
Self-Assessment
By using the self-assessment type a candidate can try to examine his own knowledge, potential
and tendencies. The self-assessment method is based on an IT-supported questionnaire and is
mostly used in case of applications.[9]

360° Feedback
The 360° Feedback is a feedback method in which colleagues, superiors, customers and suppliers
and other employees participate. The comparison of the own valuation and the valuation of
others is essential. Due to this procedure deviations between the own valuation and the valuation
of the others can arise and been used for improvements. Therefore 360° Feedback method is
supposed to be repeated after a certain period of time.
Management Audit
A Management Audit is an evaluation process which estimates the leadership
qualities/management skills of the existing manpower. External consultants examine employee‘s
skills and potential with different tests. After that an interview is used to present the employees
experience, competencies and leadership-qualities. The result of management audits is
communicated by a recommendation.

Potential Problem Analysis

The potential-problem analysis method (PPA) is designed to provide a challenging analysis of a

developed idea or action in order to pre-empt any potential for going wrong (part of Kepner-
Tregoe‘s (1976 – qv),(see also Bullet Proofing and Negative Brainstorming).

The method is closely related to some of the methods used in identifying potential faults in
complex hardware systems, it has a ‗rational‘ rather than ‗creative‘ approach, but still provides
and first-rate supply of creative triggers if approached in an imaginative spirit.

A substantial amount of effort is required to carry out the analysis thoroughly and therefore the
method is usually set aside for the more ultimate action plan (or perhaps the final handful of
options).

1. Define the Key requirements, a ‗must‘ – outputs, actions or events that must take place if
the implementation is to be successful. Failure of any of these is likely to cause problems.
2. Record and investigate all possible problems for each of the key requirements that have
now been identified, listing all ‗potential problems‘ – i.e. potential ways it could go
wrong (a technique such as Negative Breainstorming could help) and look at each of
them (a technique such as Five Ws and H could help). If you have come up with an
excess of possible problems, it is advisable to make a initial estimate of the by and large
risk (see below) that each problem creates, so that you can give attention to the rest of the
analysis on those that offer the greatest risk.
3. List possible causes for each potential problem, and the risk associated with it, the risk
reflects both the likelihood of an event, and the severity of the impact if it did, so that
‗high likelihood / high impact‘ causes present the highest risk.
4. Develop preventative actions where possible rather than having to muddle through a
problem after it has happened. Where possible try to develop ways of preventing
potential problem causes or minimising their effects and estimate the residual risk that
might still remain even if preventative action were taken.
5. Develop contingency plans where necessary, i.e. where problems would have serious
effects, but you cant prevent them, or there is a high residual risk even if you do.
 Chapter 3
Importance of Potential Management

In workplaces around the world, days are diverse but most typically follow common paths that
are absent of injury. Yet sadly, when focus is cloudy or misplaced, these days can deviate from
rote (and safe) routine and move into a place where no one wants to go.
I went to the hospital today to see Sandy. Sandy‘s family was there. It was a tough visit. I wished
I had answers to their questions about how could this have happened. It‘s not like I wanted it to
happen or planned it. Could anyone really have predicted so many things coming together at the
same time and place to lead to this outcome? Sandy‘s leg is shattered; I hope they don‘t have to
amputate.Whataflukeevent.

Let me tell you a bit about Sandy. Sandy is, rather was, a foreman‘s dream. Twenty years on the
job, one of those employees you could always count on, always on time, first in and last out. I
could give Sandy the toughest assignments and Sandy never complained, not once. Sure, Sandy
had some injuries and close calls, and you had to be on Sandy about following the rules, but
neverbecauseofthewrongmotivation.

This was a non-routine job where we needed to lift a piece of steel deck plate to the second level.
It‘s not something we do all the time. I had a new employee who didn‘t have much experience
rigging this type of load, but he was certified. We did find out during the investigation that the
sling was bad and shouldn‘t have been in use. Maybe a more experienced rigger would have
caught it, but if we had rigged the load properly I don‘t think the sling would have been an issue.

We haven‘t had a serious injury at this site for 28 months and my department had gone over 4
years. In fact, we‘re known within our company as one of the best in safety and have lots of
awards to prove it. Our medical case rate is less than .75 per 200,000 hours worked and has been
for quite a while. With that kind of safety record this event should not have happened.

Every single employee at this site has the right to pause work if they believe there is a risk
present. That morning in the safety briefing I told the crew how important it was that we get this
steel plate lifted into place so we could finish up the work on the compressor below it. I really
thought we could beat the schedule. The operations department needed the compressor back up
and running to get the plant started. I never would have thought it would lead to Sandy entering
into the work area before we completed the lift. Several people had to have seen Sandy enter the
restricted area, but no one invoked the pause work policy. Work pauses hardly, if ever, happen
anyway, but in this instance you would have thought someone would have stepped up.

We put up a warning sign and told people in the safety briefing we were making the lift our first
item of the day. Sandy should have seen the sign and known not to enter. Now I wish we would
have put up the barricades, but we told everyone during the job safety briefing what was going
on. This kind of lift takes less than an hour, so the barricades seemed excessive.

The story about Sandy is fictional, yet in reading it one can see the many instances where
potential became reality. Consider this partial list of factors that were present:
A non-routine rigging job being performed by an inexperienced rigger
Production pressure levied to get the compressor online
A foreman who "thought" the crew could beat the schedule
Judgment that installing barricades was not needed
A bad sling and a system that allowed its continued use
A pause work policy that no one felt compelled to invoke
An employee who had to be repeatedly reminded to follow the rules
Each of the factors above represents potential. Leadership in this organization likely doesn‘t
consider potential at all, much less evaluate it on an ongoing basis. As a result, this organization
operates with an incomplete and insufficient understanding of their true level of risk, evidenced
by their surprise and lack of answers regarding the event‘s causal factors. This fosters leadership
that can easily drift into denial and dismiss such occurrences as "a fluke" that "could never
happen again".

There are five mistakes that leaders make that can cause them to ignore or overlook significant
potential:
1. Judging an incident‘s potential by the severity of the injury
2. Assuming that lagging indicators show the total potential that exists organization wide
3. Believing that all injuries and exposures have the same potential to be serious or fatal
4. Devoting a disproportionate amount of resources to relatively low value-added injury
investigations and not applying adequate resources to high potential near miss events
5. Implementing systems that reinforce focus on measuring outcome instead of potential

Mistake 1: Judging an incident’s potential by the severity of the injury

Consider the following possible outcomes of a hammer falling from a height of 20 feet:
The hammer lands on the steel decking about 5 feet away from workers in the area
The hammer strikes a worker with a glancing blow on the shoulder, causing a small bruise
The hammer strikes a worker at the base of the neck just below their hard hat and fractures their
vertebrae
In many workplaces the first outcome might be recorded as a near miss, the second as a first aid
and the third a medical case with lost time. The outcomes were significantly different, yet the
outcome potential was exactly the same. In analyzing this scenario it becomes obvious that no
matter the outcome this event needs to be fully investigated. Yet in many organizations the
opposite occurs, where the outcome of the incident would determine the level of follow-up
required. Then when it comes to reporting only the outcome would factor into the safety metrics.

Mistake 2: Assuming that lagging indicators show the total potential that exists
organization wide

Also problematic is the fact that some outcome metrics can be wholly misleading (e.g. severity
rate). Severity rate is typically calculated by dividing the total number of lost or restricted
workdays experienced by the total number of incidents experienced. If a leader doesn‘t
understand the variables within the calculation and the issues that come with them, unwarranted
beliefs about the rate‘s meaning can arise. In this instance, the following three questions must be
answered when considering severity rate:
How are fatalities factored into the rate? In some systems fatalities are excluded from the
severity rate altogether. In other systems fatalities trigger a one-time charge of a fixed number of
hours.
How does an incident‘s timing affect the Severity Rate? In many systems, severity rate is a
"rolling rate" where a lost time injury that occurs January 1st may have a certain span of days
from the previous year included in its calculation. In other systems the severity rate "resets"
annually, so this same January 1st injury would produce a completely different severity rate and
thus a different picture of what is occurring in the organization.
How is the site‘s case management capability factored into the rate? Depending on the site‘s
location (e.g. variability by state in the U.S.) and local bargaining agreements that are in place,
there can be considerable variation in how the same injury is "managed" across different sites
and organizations. For instance, some employees may be required to return to work on restricted
duty whereas others may not be allowed to return to work until they are capable of fulfilling all
their job duties. This is important as restricted time does not factor into most severity rate
calculations.

Mistake 3: Believing that all injuries and exposures have the same potential to be serious or
fatal

Determining whether an injury or exposure has the potential to be serious or fatal is a highly
important step. Unfortunately, it is also a step not commonly followed by many organizations. In
a recent study on serious injury and fatality prevention conducted by BST and ORC Mercer
Worldwide, the importance of taking this step was illuminated. In analyzing the extensive data
provided by participant companies, the study found that only 21% of the incidents classified as
minor had serious injury and fatality (SIF) potential. The other incidents are no doubt still
important, but they require a different prevention strategy.

Consider two incidents that have produced the same outcome, a broken wrist. Incident A finds an
employee who stumbled and fell while walking across a paved walkway, fracturing a wrist in
bracing for the impact. Incident B finds an employee who reached into an auger that moved
unexpectedly, caught the employee‘s hand, and fractured their wrist. These two incidents have
completely different potential, but identical outcomes. If Incident A were to happen 100 more
times, it is very unlikely to result in an outcome much worse than a fractured wrist. If Incident B
were to happen 100 more times, there is a very good chance there would be loss of limb or life.

It is important to also note that there are particular types or work activities with higher levels of
potential for serious injuries or fatalities. Working at heights, working in and around mobile
equipment, working on equipment that needs to first be de-energized, and working in a confined
space are examples where there is potential for a more serious outcome if there is variation in the
system.

Mistake 4: Devoting resources disproportionately to low potential events versus high

potential events

With outcome-based measurement systems it is logical that incident investigations are typically
triggered by outcomes and not by potential. Yet this approach can cause organizations to expend
significant time and resources on activities that produce very little in return. Let‘s be clear about
this point. We should report all incidents and apply some level of investigation to each event, but
the scope and depth of the investigation should be weighed carefully.

Let‘s again consider the broken wrist example outlined in Mistake 3. In incident 1, falling while
walking at the same level, a physical inspection of the accident scene and one on one discussion
with the injured employee to determine if there were any underlying physical causes that
contributed to the outcome would suffice in almost all instances. It is even likely that no action
items will be required as a result of the incident.

In the second incident however, there should be an exhaustive investigation that identifies
immediate and root causes and results in significant and meaningful action items. This
investigation should occur even if the machine cycled unexpectedly yet didn‘t result in an injury.

This all too common practice of treating every incident the same way often crosses into the realm
of near miss reporting. Some systems generate reporting that consider all near misses equally
valuable, even when the near misses that comprise the report have little or no potential for a
significant event. With a focus in many of these systems resting on quantity over quality, many
near misses are reported but few are of real value. This is especially the case if there are quantity
targets established which tie to performance management or reward systems.

It can be argued that getting employees to report any near miss is a step forward. Yet systems
should exist that sort these near misses by potential and trigger the appropriate level and scope of
investigation. Consistently practiced over time, such a system will raise management credibility
and ultimately "train" the organization to evaluate potential effectively and address it
appropriately.

This "focus on everything equally" mentality can also affect safety processes designed to identify
exposure before an incident occurs (e.g. observation systems, audits, and housekeeping
inspections). These systems can easily and predictably devolve into ones that detect the "easy to
find" exposure. The primary focus then results in identifying behaviors or conditions that have
low potential outcomes and an unintentional de-emphasis on high potential exposures.
Additionally, these systems can focus on planned, routine events, while events with high
potential go ignored.

Mistake 5: Implementing systems that reinforce focus on measuring outcome instead of

potential

One of leadership‘s toughest challenges is how to properly measure safety. We‘ve discussed the
attractive elements (availability, simplicity, mandates for use) of lagging indicators such as
medical case and restricted or lost time case rate. We also know that these indicators are rife with
caveats. In the example of medical case rates, rates can be declining even when serious injuries
and fatality rates are not. Medical case rate also gives no real indication of the rigor being
followed in the process safety arena. And sadly, if enough pressure is placed on Medical case
rates, then people can become creative in how they "manage" an outcome from recordable to
non-recordable.

Additionally, many individual employees are wrongly rewarded based on outcome measures.
Add to this a perception that they "do not have time" for capturing additional measures and there
will be little motivation for them to move their thinking and systems to include the measurement
of leading indicators. Lagging indicators certainly have their place, but (as is echoed by Mistake
2) using them as the sole source for monitoring the safety health of your organization is a recipe
for catastrophe.

Moving Away From The Mistakes

This change will not be simple. There are people who will strongly resist such a change because
they have invested significantly in systems and processes that leverage the safety pyramid
concept of reduce the base (minor injuries) to affect the top (serious injuries). For most
organizations, performance management systems are firmly rooted and have long been the basis
by which leaders are recognized and rewarded. Adjusting the long relied upon systems that move
on every incident with equal vigor and enthusiasm will require commitment and a new paradigm
about the goals of such systems. Further, a system based on potential will necessarily require
more time from a process and oversight perspective. However, the effort is worth it as several
benefits will result, including:
Employees will have more confidence that serious incidents are less likely to occur. Front-line
workers who are closer to the working interface often have a deeper and clearer understanding of
potential than higher level leadership. Front-line workers experience the "near misses" and know
the "luck" that is involved in escaping serious injury in these cases. They also see when a
disproportionate level of effort is expended in researching and investigating low potential
incidents and experience the frustration first hand. But when front-line workers see real focus
placed on the highest potential for injuries, they recognize that there is true commitment to safety
improvement.
The organization will be making the best use of its resources. If your organization is like most,
you have a limited amount of resources and they all need to be focused on the most crucial
activities. Recognizing differences in potential and targeting resources accordingly allows you to
get more value from the time invested.
The organization will develop new and more beneficial metrics to measure safety performance
effectiveness. A natural outcome of this approach will be the development of leading indicators
(like potential rate) to supplement the existing lagging indicators.

Steps For Getting Started

When it comes to committing to a focus shift of this magnitude, it is often difficult for leaders to
know where to start. The most important step is for leadership to first make a combined
commitment to include potential in their organization‘s view of safety. Once that alignment and
recognition is in place, consider these three steps to build momentum:
Distribute this white paper to your leadership team and have a facilitated discussion about where
your organization stands relative to understanding the need to consider potential and evaluating
and making a judgment on incidents relative to potential.
Commission a team to look at organizational safety elements such as the incident investigation
system and performance management systems which can often send the message (intended or
not) that outcome is more important than potential.
Establish a matrix for dividing incidents into low and high potential and start categorizing every
incident and near miss based on this matrix.
 Chapter 4
Business Potential

Identify Potential Business Customers

1. Product Innovation Approach
In the product development cycle, the market analysis and consumer research phases are used to
identify customers.
KEY POINTS
Organizations can be segmented by industry, size, function, level, and type of individuals
within the organization.
Industry classifications can assist in determining what specific industries potential customers
are in.
Preliminary research always saves time. Failing to analyze a prospect is the main reason for a
great deal of wasted prospecting time spent on a customer who should have been promptly
discarded after due research.

channel
A distribution channel.

marketsegmentation
The process of dividing a broad target market into subsets of consumers who have common
needs or desires, as well as common applications for the relevant goods and services.

Identifying your customer begins with formulating a value proposition. You have to be able to
answer this question: ―To whom is this proposition of value?‖ When trying to answer this
question, it helps to simplify matters by breaking the market down into components. There are
three broad categories of customers who could buy your product:
individuals, channels (intermediaries), and organizations. Each of these categories can be further
broken down into smaller segments. This is called market segmentation - picking out the
particular groups of people or organizations that benefit from your product, so you can better sell
to them. Organizations can be segmented by:
Industry
Size
Function
Level
Type of individuals within the organization
Many segmentation schemes are combinations of the above list. For example, let‘s say a venture
developing an innovative digital storage product decides to sell only to organizations, not
individuals. It segments its potential market by size of organization, size of data storage
requirements, and need for speed of retrieval. This would occur during the periods of market
analysis and customer research in the product development cycle (Figure 1). That leads, for
example, to a focus on large financial institutions and large medical centers. Within those
targeted organizations, the importance and cost of the purchase dictates that the venture focuses
on selling only to ―C-level‖ executives, such as the CIO or CFO. Finally, as the technology is
very new, the venture team chooses to target the executives who are technology enthusiasts—
people who love new technology for its own sake and are often willing to look at it in its
preliminary form.
Industry classifications can assist in determining market segmentation. The North American
Industry Classification System (NAICS) is used by business and government to classify business
establishments according to its primary type of economic activity (process of production) in
Canada, Mexico, and the United States. Thus, if a company identifies a potential customer but is
uncertain what industry that customer belongs to, using the industrial classification from the
NAICS can provide more detailed information on the specific business activities of that potential
customer.
Having decided on a specific market, the salesperson should try to limit his prospecting to
remain within that market. The ideal customer who will buy as soon as the salesperson talks to
him is probably nonexistent. Nonetheless, the closer a salesperson's prospect matches that ideal
customer, the fewer sales objections will be placed in his way. It therefore makes sense to ensure
that his prospects at least resemble the specification as accurately as they can. This means
identifying the potential of a prospect at the very outset.
In particular, the salesperson should know the requirements that a potential customer has set for
his future, his priorities, and in all probability, his financial resources. Failing to analyze a
prospect is the main reason for a great deal of wasted prospecting time spent on a customer who
should have been promptly discarded after due research. Good prospecting does not necessarily
dismiss those whose business appears to be static, but it is certainly improves the ability to select
and concentrate one's efforts where one is more likely to secure immediate success.
Unlocking business potential

How we can help unlock your business potential

Organizations need knowledge to succeed. And in business today, knowledge has never been
more important.
Knowledge is the most important tool businesses use to overtake their rivals. Better knowledge
means better products, better processes, better management tools, better values and better
behaviours – throughout a business. But perhaps most importantly, better knowledge can mean
developing a unique company, a key ingredient in outstanding success.
Too often, however, the unique knowledge that businesses possess goes to waste, while other
knowledge that could dramatically improve how they work is never imported from outside.

How standards can unlock the potential knowledge offers

In the early days of BSI at the start of the 20th century, standards were about achieving consistent
product quality. Later standards helped build strong, reliable processes throughout an
organisation. Today standards continue to do all this, while at the same time helping you unlock
and develop new streams of knowledge through your organization.
Increasingly today the emphasis is on using knowledge to help organizations tap into their own
business potential. How? By looking at the values and principles they operate by and the best
practice knowledge they have amassed in the area in which they work. By making sure these
unique values, principles and specialist knowledge are utilized to their full potential. And by
adopting tried and tested principles from outside in specific areas of their business, often gaining
huge improvements in productivity.
We help organizations realize what valuable knowledge they have, often overlooked, which
gives them certain unique advantages over others. This is an exciting new area for standards,
which includes issues such as corporate behaviours, business ethics, diversity and innovation
capability. It can encourage and provide linkages between many different technical domains to
solve an emerging issue.
These growing streams of knowledge within an organization accelerate the innovation cycle,
spread key expertise business-wide, and establish firm value-based principles to deepen the
company culture which is a key ingredient in unlocking your potential.
How To Evaluate Potential Businesses- 8 Key Components of Business Viability Analysis

Indeed, Business Viability Analysis is a boring topic. But this is also the most
critical component of your business & marketing plans which provides direction
on the potential market environment, market demand and supply, and to extent,
guides your potential market direction decisions. Note that financial modeling is
beyond the scope of this article.
About 70% of all businesses are Small Businesses. And you can never be more
wrong should you feel that this viability analysis outline is on ly for corporate
businesses. The framework below is met out for both segments with the basic
fundamentals in place.
I have segregated the Business Viability Analysis into two major categories,
namely Overview Evaluation models and Your Domain Business Eval uation
models. The former includes Porter‘s 5 Competitive Forces Model, P.E.S.T.
Analysis. The latter includes SWOT Analysis Matrix, Target Segment Analysis,
Product Life Cycle Analysis, Competitive Advantage Model, Product Growth
Directions, BCG Matrix. Both set of models will help you to qualify if the
business in question is viable from market demand supply as well as potential
market perspectives.
1. Porter’s 5 Competitive Forces Model
Porter‘s 5 Competitive Forces model is developed by Michael E. Porte r, an
important strategic analysis from a broad market environment perspective. It
explores the 5 major factors namely Bargaining Power of Supplier, Customer
Power/Buyer Power, New Entry Threats, Substitutio n Threats & Competition
Rivalry.
These 5 forces are interdependent, influencing and interplaying with each other at
any given point in time. This is a model which needs to be revisited on a
consistent basis, usually, over a half yearly time frame for re -evaluation of market
trend.
2. P.E.S.T. Analysis
Doing your ―PEST control‖ ensures good health a strong pulse for your business.
PEST analysis essentially means macro environmental evaluations such as
Political & Legal, Economic, Social & Cultural, as well as Technological.

Economic environment could make or break your business. In 2008, the US sub -
prime issue became a global financial crisis which not only affected the housing
market but nearly every facet of the economy by virtue of its spillover effect. The
interest rate at time of writing, is 2%, a f ar cry from 4% a year ago. Banks tighten
their lending belts and business loan borrowing become more difficult to obtain.
But if you manage to get that business loan, you should be incurring a much lower
interest repayment.

One Social factor which is growing in importance is the environment. Every large
corporation nowadays are involved in one way or another in reducing carbon
emission to the ozone and in dealing with climate change.
3. SWOT Analysis Matrix.
SWOT Analysis, is the acronym for Strengths, Wea knesses, Opportunities &
Threats affecting your business. Strengths component analyses internal
capabilities throughout all business functions which could become unique
propositions when mapping out business strategies. Weaknesses analyses the
internal gaps in current state. Likewise, Opportunities & Threats analyse your
business‘s external environment which could give rise to opportunities or threats
to your business. This is a fluid cheat sheet (not totally exhaustive & you should
add on to it to cater to your own business type) which should be revisited annually
as a reality business stop-check.

4. Target Segment Analysis

This is a very critical section of the marketing plan which helps you with your
market segmentation and defines your target markets. D efine & segment your
clientele-base into Primary & Secondary Target market groups using demographic
and psychographic information. Demographic data includes age, income group,
geographic location etc. Psychographic data includes life -stage needs, lifestyle,
consumer purchasing behavior etc. Upon completion, you would have a better
gauge on the potential size of your target segments. You may adjust the segments
to match your products, thereby expanding your segments for greater potential.

5. Competitive Advantage Model

The Competitive Advantage Model by Michael E. Porter suggests 4 approaches
benchmarking against your competitors namely, Cost Leadership, differentiation
or focus with 2 variants.

Cost Leadership strategy means leading in a low cost pricing strategy within your
industry. This is achieved from economies of scale. You must almost solely
dominate this competitive space otherwise more than one company in this space
will cause a price war.
Differentiation strategy indicates unique value propositi on, namely in areas such
as the product, service, image, distribution, marketing etc or a combination of
them.

Focus strategy aspires to be the best in a focused segment, with 2 variants of cost
focus and differentiation focus

6. Product Life Cycle Analysis

The Product Life Cycle Analysis helps you to identify the stage of your product.
All products go through four stages, namely the Introduction, Growth, Maturity &
Decline stage. Every product has a life cycle. You need to know each of your
products‘ life cycles thoroughly in order to plan to phase their life -stage across
the horizon.
This analysis is a fluid document which needs to be revisited annually for
planning purpose. If you believe that your product has other potential uses not
maximized currently, you should pro-actively look to rejuvenating the life cycles
of such products at their matured and declining stages.

7. Product Growth Directions

Product Growth Directions shed light on the possible growth approaches you can
adopt in driving your product sales. This is a matrix which maps your product
growth strategies across new vs existing markets and products. Potentially, the
four segments are Market penetration, Market development, Diversification as
well as Product Development. Market penetration essentially denotes leveraging
new markets with existing products. Market development means making inroads
on existing markets & products. Diversifica tion indicates leveraging on existing
markets with new products. And of course, Product development is expansion into
new markets with new products.

8. BCG Matrix
Boston Consulting Group developed this BCG Matrix which helps you to
determine what priorities should be given in your product portfolio of a product. It
has essentially two dimensions – market share and market growth rate, with 4
categories fitting into these quadrants.
Stars = Leaders of the Business – Products with high growth rate & high mark et
share. Generates high cashflow and requires high cash input. Usually, Net
cashflow is flat.

Cash Cows = Foundation of the Business (stars of yester years) – Products with
low growth rate & high market share. They generates high cashflow with low cash
input requirements.

Dogs = Drags of the Business – Products with low growth rate & low market
share. They must be avoided whenever possible. Liquidate as many as possible.
Question Marks = Ambiguity of the Business – Products with high growth rate &
low market share. Have high cash demand and low returns. If keeping question
marks, you must ensure increase in market share and deliver cash.

The identification of your products at the various categories will enlighten you to
apply the correct growth & funding strategy. For instance, cash infusion could be
provided to fund Question Marks &/or Stars to drive them towards the next level –
Cash Cow positions.

True application of all the above mentioned viability analyses is a cumulative

interplay of the different models, although they are developed separately by
separate strategists. I advocate a broad yet conjugative approach to the application
as therein lies great interdependence of each to the other.
 Chapter 5
Potential Management Considerations

Of course all employees are valuable and should be treated accordingly, but in most workplaces
there are certain staffers that are disproportionately valuable in comparison to their
compensation. It‘s wonderful to have one or two of these rare albatrosses on staff, but you can
move your company ahead by leaps and bounds if you can build teams of high potential
employees.
High potential talent is, as defined by a recent study on Strategic Human Resources
Management, ―employees whose particular skills and knowledge value make them vital to
organizational success.‖ The study added, ―High potential employees are highly talented and
create a disproportional amount of value from the resources made available to them by the
organization.‖
As an HR pro, this has got to intrigue you. Talent that can willingly produce far more output than
expected based on the wages, benefits and tools accorded to them are a boon to the bottom line.
So how can you attract these rare birds? And if you have them, or acquire them, how do you
keep them engaged, performing well and nurtured?
It‘s important that you be able to identify these creative, innovative, complex problem solvers
and develop plans to manage this talent effectively to ensure retention. The notion that they need
to be managed differently is a good reason to put these uber-staffers onto a team (or teams)
together. Having them work side by side with average staffers may create inequitable
management complaints, but clustering them can keep everyone happier.

Here are some of the recommendations the study offers for creatively corralling high potential
employees:
Admitted autonomy. These are not staffers you need to aggressively supervise – nor should
you. They need to know they have the freedom to think outside all of the boxes and solve
problems for the organization.
Equip them. If Iron Man doesn‘t have the tools, he can‘t build the metal super suits. Be prepared
to provide the tools needed so these higher-level thinkers can produce results from you. This is
critical!
Carve out borders. If you want great things from high potential employees, don‘t bog them
down in administrivia. Let them do what they do best and leave off paper pushing, rote staff
meeting and other optional detractors from their core function.
Tolerate mis-steps. Most great innovations have sprung from the ashes of failed attempts. Bell
didn‘t invent the phone in one go and Fleming almost tossed out the lab error that resulted in
penicillin. Genius evolves out of failed trials. Don‘t expect every idea to be a winner.
Goals, not guidance. High potential employees don‘t need to be told how to do the job or even
why you need them to. They are highly motivated people who are curious problem solvers. Just
tell them what you need the goal or objective – and let them go to it!
Grab a gaggle. If you‘re a fan of House, you‘ll remember he needed a team of smarties to
bounce his genius theories off. High potential employees need like-minded thinkers to
collaborate with. So grab yourself a fancy hat and accumulate an enviable stable of Derby-
worthy mental horse-flesh.
Accommodate accordingly. Higher potential employees need a less restrictive environment.
Mandating an 8:00 am start time, set lunch hours or other restrictive rules will dampen creativity
and demoralize this type of worker.
As an HR pro, you can participate in designing recruiting strategies to attract high potential
staffers. You can also help leaders develop management and feedback strategies to optimize the
results the company can get from these powerful hires. And if you‘re already stretched for time,
consider adding Jobscience apps and products to your HR process to eliminate inefficiencies,
optimize automation and free you from mundande (but necessary) administrative tasks to fully
tap your talent!
Considerations For Potential Business partner
Why Do You Want a Business Partner?
Consider why you want a business partner and whether you are ready for a partnership. Do you
need a certain skill set to enhance your business? Are you looking for access to certain clients or
networking opportunities? Are you prepared for relinquishing some control of your business?
What do you see this business partner bringing to your company?
Examine Strengths and Weaknesses in Your Business
When considering potential business partners, consider whether the candidate has expertise in a
specific field that you need or can benefit from. Look carefully at what your strengths are and
what someone else might be able to help elevate your business. You may be excellent in
motivating and managing your team, but could use some help in marketing your business.
Knowing what exactly you want from a potential partner will help you pick the right one.
Flexibility and Support
One benefit to taking on a partner is the flexibility and the added support. We have all heard
about the difficulties of single parenting. Likewise, running a business alone can leave you
stressed, exhausted and overwrought. A partner can help lead the direction of the company and
share the burden of so many responsibilities. However, sharing the burden means sharing the
power and the benefits. Negotiating this aspect of the business partnership requires extreme
precision.
Personality Compatibility is Important
Evaluate the potential partner's personality. Is it compatible with yours? Are you likely to be able
to make mutual decisions even when you may not agree? You may want to use a personality
assessment to give you a sense of the person. Finding out what motivates people to do a good job
is critical to finding out whether you have a good match or not. If his or her motivation is the
same as yours or complements yours well, you have a better chance of making it work.
Assess Potential Risk to Existing Relationships
If you are considering someone that you have a longstanding relationship with or family ties, you
may want to take a moment to consider whether the partnership is worth risking the
relationship/s. Avoid making partnerships because of money. In this situation, the person with
the money has substantial leverage and power. This can lead to problems in the long run,
especially if you are not a good match
Document Everything in Writing
Be sure to discuss your expectations and the aspects of the partnership before signing any deals.
Once you are ready to make a commitment, be sure to put everything in writing. , Document the
organizational structure and who is responsible for what aspects of the business. Additionally, be
sure to make a buy-sell agreement to protect both parties if someone decides to sell his or her
shares, retires or dies.

Considerations dealing with Potential Investors

I am often asked by my entrepreneurial clients about the relevant considerations to make relating
to intellectual property (―IP‖) issues when meeting with and pitching to potential investors. My
views on the matter are not necessarily profound, however the following considerations are not
always something that budding entrepreneurs turn their minds to during the early days of
building their start-ups.
Do your Homework!
Conducting thorough due diligence inquiries not only gives potential investors peace of mind
that the investment opportunity will not run afoul of any third party IP rights, but further
demonstrates that entrepreneurs truly understand their space, their possible competitors, and any
potential legal pitfalls that could otherwise go unheeded.
Due diligence can take many forms, and is greatly facilitated when the client has a close working
relationship with its IP counsel. This means that the lines of communication must remain open,
and both lawyer and client must be willing to challenge one another‘s thinking and preconceived
notions.
Further, many IP due diligence tasks (particularly prior art searches and review) can be
performed more efficiently and cost-effectively when the client (who is the expert in the space
and their business) takes an active role in the process.

Protect your Assets

Investors want assurance that the financial risk they are considering is mitigated as much as
possible. One of the most direct ways to mitigate the potential risk surrounding any start-up is to
ensure that the core IP concepts of the business are protected from potential competitors in the
space.

IP protection can take a wide variety of forms depending on the particular start-up business
model, but one thing remains constant: If you plan on pitching to investors, be prepared to
answer the question – ―What have you done to protect the IP surrounding your business.‖

From my experience, if you are not prepared to answer this question fully and completely, you
risk scaring off the very capital that you need to grow your start-up to the next level.

Build your Portfolio

With a strong IP portfolio that covers the core concepts surrounding its business, a start-up can
not only ensure it has the freedom to operate unfettered in its space, but can create additional
revenue streams from licensing the protected IP assets in tangentially-related spaces that are not
in direct competition with the start-up.

It is not hard to see that when additional revenue streams can be demonstrated in addition to a
start-up‘s core business model, the investment opportunity becomes even more enticing.
Investors certainly want to help get exciting start-ups off the ground with their experience and
capital, but there is still one goal in the end: to grow into an economically viable business.
Generating additional revenue streams through the strategic licensing of an IP portfolio simply
makes a start-up‘s business case that much more attractive to potential investors.

IP Strategy is an Investment that Grows your Business

As we all know, potential investors are reassured when they see entrepreneurs have personally
invested in their start-up opportunities. In my view, taking the steps to properly consider the IP
landscape around start-up businesses merely drives home the point that entrepreneurs are truly
savvy to the world they are entering into and intending on competing in.In short, intellectual
property protection should not be viewed as merely another cost associated with starting a
business, but rather as a direct investment in growing the business that can underpin its future
success.
Consideratons For Potential Participants

Informed Consent - A Process, Not a Form: Informed consent is much more than a document
or obtaining a participant's signature on a consent form. Informed consent is a process of
communication between an investigator and a potential research participant.
The purpose of the consent process is to:
Ensure that potential participants understand that they are being asked to participate in
research, and that they appreciate the differences between research and treatment
Foster potential research participants' understanding of what to expect from participation
in a study
Encourage and respond to questions about study participation
Facilitate discussion, reflection, and free and informed decision making
The consent form serves as a record of the information conveyed to the potential participant
about participation in the study. The signing of the consent form provides documentation that the
individual has agreed to participate in the study.

Improving Understanding and Voluntariness: A crucial outcome of the consent process is that
potential participants understand pertinent information about the research. Another important
outcome is that potential participants understand that the choice to participate is theirs and that
refusal to participate will not jeopardize their clinical care. A number of techniques have been
shown to increase understanding and voluntariness, including:
Having the potential participant take information home
Having a relative or friend present during discussions with the researcher
Using videotapes, question and answer pamphlets, drawings, computer modules, or other
educational tools to provide information about the research
Having a research nurse or another qualified person also talk to the potential participant
and offer to answer questions
A number of concepts that are crucial to improving understanding and voluntariness are
discussed more fully in the Voluntary Participation, Time for Decision-Making, Consent Form,
and Comprehensibility sections.

Chapter 6
Potential Management Strategies

At a time when experts agree that homegrown talent is especially crucial, why are HR
professionals having so much difficulty identifying, retaining and preparing the best and the
brightest? Why are so many talented prospects dissatisfied?
First, researchers see a huge divide between what employers think motivates high-potentials and
what actually motivates them. Employers cite lists of what "we‘ve given them," including
outstanding remuneration, to demonstrate the strengths of their programs. But attractive pay and
benefits are on a high-potential‘s " ‗I‘m given‘ list, meaning he or she can replicate them
elsewhere fairly easily," says Roland Smith, lead researcher at the Center for Creative
Leadership in Colorado Springs, Colo. "What they‘re looking for instead are the things that truly
differentiate employers. These include opportunities to more directly influence and direct their
careers and more-challenging assignments with real risks and rewards."
It often takes more than compensation, stock and options to retain people, says Raoul Buron,
vice president and chief learning officer at Prudential Financial in Newark, N.J. "If I know my
career is being managed, that I will be regularly reviewed and given options in choosing my next
move, it makes a big difference," he explains.

Second, high-potentials need smarts and experience to thrive, but ability and seasoning are only
part of the recipe. "We know from our benchmarking studies that high-potentials don‘t fail
because they lack ability," says Jean Martin, executive director of the Corporate Leadership
Council. "Most don‘t succeed because they are not engaged and because the assignment they‘re
in is not what they want."

Here are some strategies you can initiate to boost morale and engagement:

Tell them they’re special. Center for Creative Leadership research reveals that only about 40
percent of employers formally tell high-potentials of their status. A second study from the center
suggests that those who fail to do so pay a steep price in attrition. Of the high-potentials who
were not formally told of their status, 33 percent were looking for another job. Of the high-
potentials who were told they were special, only 14 percent were looking.
Align individual and company needs during a consultative process. High-potentials want to
be involved in planning their development, not dictated to. Often, they‘re presented with
assignments knowing that if they decline or hesitate, they will be left behind. "Historically, the
interaction has been a transaction—‗You do this, and we‘ll give you that,‘ " Smith says. "Now,
in best-practice situations, it‘s becoming more about mutuality and reciprocity. It‘s a dialogue
where interests on both sides are balanced."
The dialogue occurs around the time that the high-potential‘s performance is assessed, but
sometimes in separate discussions. At Fifth Third Bancorp, for example, development
discussions are separate from performance review discussions. Yet development discussions are
not viewed as once-a-year or twice-a-year events. "It‘s a continuous journey to match
organization needs with personal aspirations," says Lauris Woolford, executive vice president of
organization development and planning at the Cincinnati bank.
General Mills represents another case in point. There‘s a conversation that is driven by the
employer. "We‘re leading the way," says Mike Davis, senior vice president of global HR, based
in Minneapolis. "We know the experiences our high-potentials need to grow and flourish
probably better than they do. Still, if we say, ‗The next best opportunity is in Japan‘ and the
person says, ‗I don‘t want to go to Japan,‘ we scrap the plan and find another assignment."

Delegate real responsibility. Research shows that high-potentials thrive when they‘re truly
accountable for something. But employers are often reluctant to give them the reins. "When they
get the more significant assignments, they‘re being told what to do rather than being assigned to
direct or co-direct," Smith says. "Within reason, you have to be prepared to let them make
mistakes. What got them into your program is the ability to succeed on their own" expertise.
General Mills gives its high-potentials "really meaty assignments," Davis says. "They want to be
challenged all the time—to play backhand tennis even though they know forehand is easier. We
move them into stretch roles across borders, give them cross-assignments into new areas, or take
them out of a business they know and put them into another. They‘re pushed and expected to
produce."

Be flexible. Inflexible assignments, especially those that require relocation when people have
young children and employed spouses, can be morale busters or worse. Finding creative
solutions that respect lifestyle needs and still provide seasoning for advancement can
differentiate an employer. One alternative to a full-blown international experience: Put high-
potentials in charge of a country or a piece of a country requiring them to travel for two or three
weeks at a time, instead of the usual two-year deployment. Or, assign them to host when people
from other countries visit, says William Byham, chairman and chief executive officer of
Development Dimensions International, a consultancy in Bridgeville, Pa.
Show them they matter. The single biggest factor in retention is whether people feel valued,
says Michael Critelli, former executive chairman of Pitney Bowes Inc. in Stamford, Conn., and
current CEO of Dossia in Cambridge, Mass., an employer-led group dedicated to empowering
individuals to improve their health. "I spent a lot of time in one-on-ones with people at all
levels," recalls Critelli, who has experience as an HR leader.
"Hug your high-potentials because if you don‘t, someone else will," Woolford advises. "Make
them know that you would not want to run your business without them."

Tap effective mentors. Who the mentor or coach is makes a difference. High-potentials want
access to people in the hierarchy that they respect. "In a lot of mentoring arrangements, you‘re
assigned or pick from a pool," Smith observes. "That tends to be hit or miss, and often the
relationships are not really that good."
Finding leaders who can step into the mentoring role can be challenging. "C-suite executives are
good at challenging people and assessing them, but not always as good at supporting them,"
Smith says. "They may find it hard to invest the relational time that people want."

Foster visibility. Employers insist that substantive exposure to top decision-makers—not just
face time with them—is essential. Boards of directors should "get out to remote facilities to see
people in their native settings," says Critelli, who currently sits on the board of Eaton Corp.
"Boards should go somewhere away from headquarters at least once a year so members can see
promising people below the top tier in action."

Make learning and advancement seem never-ending. At Nestle USA Inc., "There are real
opportunities to move around location-wise," says Jeffrey Ertel, vice president of human
resources. "If you don‘t want to move, we can move you within your location and get you a
different experience." Ertel exemplifies someone who benefitted from the challenges that Nestle
continually makes available: "I‘m in HR now, but I started in marketing. Along the way, I‘ve
done sales, purchasing and been involved in a joint venture that sold coffee. I was fortunate. I
was asked by the division president when I was a marketing guy to go run a purchasing
department. He saw something in me that led him to give me a chance. I did OK, and they kept
moving me."
Naturally, HR professionals in mid-size and large companies can create more opportunities. With
195,000 employees, HCA Inc. in Nashville, Tenn., is an example. "There are always
opportunities available," says John Gering, group director of organization effectiveness. The
varying sizes of HCA hospitals and health care businesses let someone begin as an administrator
in a small facility and advance by moving up to a larger facility.
Promoting outside experience only works, however, if you‘re giving due weight to these
activities in selection and advancement decisions.

Focus on developing the attributes leaders are bound to need. High-potentials are savvy; they
read the business press, field phone inquiries from headhunters regularly and communicate
endlessly with colleagues through social media. They know what they want from a development
program. Keep their desires in balance with company objectives. "Target the competencies that
will enhance your organization," advises Sandi Edwards, senior vice president of AMA
Enterprise, a specialized division of the American Management Association in New York City.
Research from the association suggests that some employers are not focusing sufficiently on
developing the leadership capabilities their businesses will need to remain competitive. For
example, 68 percent of the 939 HR and other high-level managers who responded to the
Developing Successful Global Leaders survey said their development programs did not "to a
high or very high extent" build "agility and adaptability to manage global shifts." The study was
conducted with the Institute for Corporate Productivity.

Give managers assessment tools they need and will use for selection. Even with tools in
place, talent management and succession planning often falter because managers do not have
comprehensive systems for their high-potential programs. One area that suffers from lack of
attention in many companies, for example, is the selection process. According to a survey of 120
HR professionals responsible for high-potential programs, 48 percent of managers are ineffective
at identifying high-potentials because of a lack of standards or inconsistency or lack of rigor in
applying them, says George Penn, senior director for CLC PRO, a technology product offered
under the auspices of the Corporate Leadership Council.
Use a systems approach. The solution, Penn says, is to create a comprehensive system.
"Provide processes for creating criteria, assessing performance and controlling for compliance in
administration," he advises.
A systems approach does not require sophisticated software. Penn says about 25 percent of
organizations with systems use binders and Excel programs to monitor and chart performance.
But more-sophisticated software is worth exploring, and some options are described in "Sizing
Up Talent" in the April 2011 issue of HR Magazine.
Yet creating a database of employees‘ skills is only part of the process. Penn says newer
products are more comprehensive and may focus exclusively on high-potentials. Information
may be processed in-house, through a vendor or with a hybrid model. No matter how automated
the system is, the idea is to control the whole process from profiling and employee feedback to
standardizing, where possible, selection processes and criteria for judging performance. Many
types of integrated talent management software have these features.
General Mills is among many companies whose HR professionals have developed or are
developing comprehensive talent management systems. "We have been using a homegrown
system and are now looking to integrate a ‗grown-up‘ system. Candidly, it‘s not about the
software, ever," Wilde explains.

Put assessment to the transparency test. Morale suffers when employees say the selection
process is unfair or built around favoritism. This was the case at the Bermuda Hospital Board in
Hamilton, Bermuda, which runs the only hospital system serving the 65,000 residents of the
island nation of Bermuda. Initially, in targeting native Bermudians for high-potential status,
succession planners got off on the wrong foot. Favoritism trumped training and competence,
hurting morale and performance. And, "People were pushed ahead into positions they were
unprepared to fill," recalls Venetta Symonds, deputy CEO and executive vice president.

Part on friendly terms. Inevitably, some high-potentials will depart, making critics question the
investment in talent now benefiting others. Part on good terms, however. "We‘re good at keeping
someone in our plans even when they leave," Prudential‘s Buron says. "We‘re always trolling in
the market.
"We may go back out and recruit that same person later. For example, someone re-joined us
recently. When he left, we hated to see him go. But he went to a smaller company where he got
more experience than we could give him at the time. We let one of our colleague companies
continue to develop him," Buron adds.

Get buy-in from top leaders. Unless leaders agree to the financial investment and make a
personal commitment to the initiative, HR professionals‘ efforts are destined to end in
frustration. "When we look at organizations that are best in class in identification, selection and
development of high-potentials, the senior-most executives are directly involved and understand
it‘s a key responsibility," Smith says. "Where it‘s not as successful, development of high-
potential talent is not as important to the CEO."

Offer What You Can Afford

Meanwhile, Eric G. is back in the job market and weighing a short list of prospective employers.
Work/life balance and flexibility remain high priorities. "I‘m being more careful in screening the
culture of each of the companies, spending more time getting at what a typical day is like for the
department and team where I‘d be working," he says. "I expect to work hard, but having the
opportunity to manage my day so I can spend time with my son is essential. I‘m also looking for
a company with sufficient resources in place so taking a vacation will not be a problem. Where I
was before, because of the demands of the job, I couldn‘t get away."
Keep Eric‘s priorities in mind next time you‘re given responsibility for the care and feeding of
your high-potential employees. But note that balancing priorities goes both ways: Weigh
carefully whether your company can afford to pay the total rewards that high-potentials like Eric
want, given all other competing demands. Smart money says you‘d be wise to do so.
 Chapter 7
Retaining High Potential Employees

Retention of talent, according to a Towers Watson study, is the second more troublesome area
for employers in India, after talent sourcing. If we try to correlate the market conditions of 2012
with the challenges employers are facing, it is a mixed bag. On one hand, the employees are
holding on to their jobs since the ‗external market‘ isn‘t too friendly, whereas the exodus of key
talent continues to beleaguer the employers in India. This brings us to the key question – Why do
high performers leave? What are the triggers that drive them to look out for better options? In the
absence of transparent measurement systems, it is difficult to have clear answers to such
questions. One of the consequences of this issue is the shift of limelight from exit interviews to
stay interviews. Stay interviews provide constructive information that can be utilized to pre-empt
and prevent future attrition of high performers (HIPOs). Another interesting feature of HIPO
churn is that the reasons that make them stay are not always the attraction in the job offer for
which they leave.

Engaging Top Talent

Let's Consider some of the factors that cause top talent to stay are:

Pride in their Work: The thing with intelligent people is that they need challenging assignments
to keep them motivated and their contribution needs to be harnessed well with due credit and
visibility. Once these basics are met, the managers can rest assured that their A-team is engaged.

Career Advancement: Managing high potentials‘ career track well is an investment

rewarded with increased productivity and commitment to the organization. Their world
needs to keep getting bigger and bigger to ensure they aren‘t stifled by lack of adequate
challenges.
Visible Differentiation: As soon as one is aware of the fact that their contribution to the
table is out-sizing the others, they are quick to expect more returns as well. Particularly, in
the case of top talent, this could make or break their engagement levels.
Understanding the Big Picture and Role of HIPOs: Organizations need to ensure their high
potential employees are aware of the long-term plans and how they are helping in
achievement of those plans. Strategic narratives help simplify complex projects and get the
buy-in of top notch players in the organization.

Fair Compensation: Organizations need to have a handle on what the market offers to the peers
of their HIPOs and ensure they do not lose out in the field of compensation. All things remaining
equal, human psychology does associate salaries with caliber. Further, there are various studies
to prove that the productivity of one high performer does much more for the bottom line than a
few average performers put together.

It is quite evident from the above factors that the need to keep a high performer engaged at all
times is paramount.
The recruiters would always keep calling a good profile, who could practically become a star
performer anywhere. There is always a war for talent prevalent in the job market. The reason
why a star performer takes a recruiter‘s call seriously one day could only be a dent in satisfaction
on any of the afore-mentioned parameters.

Managing for Performance

Managing top performers is a tough call not adequately handled by many managers. They need
to be saddled with tons of security, creativity and ability to let go. In short, a high EQ (Emotional
Intelligence Quotient) manager is the only one who can manage a top performer. One can hardly
overemphasize the need of having trained managers in the organizations who understand the
need to retain talent and its importance to the larger goals. Some traits a manager needs to
possess in order to take on a top talent in his/her team would be:
Secure: Managing a team-member having more talent than the supervisor and one who in
all probability is destined to go higher than his seniors is no mean feat. Only an inwardly
secure person can manage such top talent. One who understands well that as managers their
contribution to the organization, as in the present case, is recruitment and development of
top talent and that is going to be their claim to fame!
Imaginative: Designing challenging projects that keep their star performers engaged is only
the start of the journey down the imagination lane for the managers. They need to keep
thinking of ways to ensure that the career track of their HIPOs is engineered well towards
accelerated growth.
Resourceful: Since plain, vanilla communication just will not do, managers need to be
resourceful in order to get skip-level managers involved with the HIPOs in conversations,
apart from the Human Resource department. This also creates a feeling of being valued,
another essential element for top talent engagement.
Synergistic: While managing the top talent, one cannot forget the existence of other
members of the team. The task of synergizing the overall team efforts towards a common
 direction without making anyone feeling left out, while piloting complex high performer
career path, can be a tough one!
Far-sighted: Once the star performers have been coached and nurtured, when the relevant
opportunity comes, the manager needs to keep the big picture in mind and let go of his top
talent for larger, sometimes more ‗visible‘ roles which fit in well with the team member‘s
career track. Doing so will ensure further engagement of the team-member as well as earn
respect – a keenly sought commodity by all managers.

The higher management in its turn, upon locating such a skilled manager should do all to ensure
that s/he is being rewarded adequately for extraordinary managing abilities. It is going to be
managers like these who can be entrusted with the task of developing a high performing team
and in effect, contributing that much more to the organization. Another interesting thought that
hits the mind at this juncture is why cannot such managers be recruited as a focused strategy
before getting the HIPOs in. There should also be a strategy to nurture and handhold them for
doing better jobs of managing the HIPOs.

Winning the Retention Game!

The average cost of replacing top performers is eating away the top lines of even the most
profitable organizations. Even when the bottom line remains intact, the loss of just a handful of
key employees who have a special expertise or who maintain valued customer relationships can
shake an organization to its roots. In this age of high stakes and unpredictable market and
organizational changes, it is imperative for organizations to educate their managers and create an
environment that nurtures their top talent.

The author is Gurgaon-based freelance writer, coach and HR professional. She has worked in
areas including project management, performance management, and compensation & benefits,
across sectors including IT/ITeS, Financial Services, and Insurance.

Tags:
Talent Engagement and Retention
Some other ways businesses try to retain high-potential employees
If you know you have been indentified as a future leader in your organisation or at least targeted
for greater responsibility, do you feel your employers do enough to retain your loyalties? Are
you truly invested in your companies big vision?. High-potential employees – or those workers
that companies have designated as their future leaders – are a growing source of high anxiety for
employers, according to OI Partners, a global coaching and leadership development and
consulting firm.
Employers are more anxious about losing high-potentials than any other employees. High-
potentials are naturally being targeted by other companies in their search for talent in a
recovering job market. The High-potentials bracket have had a high turnover rates during the
past year and are considered by employers to be their greatest flight risk, or most in danger of
quitting for other jobs. This is especially true in the financial sector where a brain drain is
actually feeding into the FinTech sector.

Here are some interesting stats from the survey:

Worried: Employers are more anxious about losing high-potentials than any other workers. 78%
of companies are concerned about high-potentials quitting.
Turnover: High-potentials have the second highest turnover rate of all organizational levels.
34% of employers reported an increase in departures of high-potentials in the past year, right
behind 51% that reported higher turnover for front-line workers.
Future Flight Risk: Almost half (48%) of employers consider high-potentials as their greatest
flight risk, particularly as the economy improves and ―portability‖ for key functions continues to
grow.
Loss of future leaders: About half (49%) of companies regard high-potentials as their biggest
source of future leaders. Yet, about one of four employers (37%)report they do not currently
have enough high-potentials on board.
So what can companies do to ensure greater retention?
―Offering coaching to high-potential employees ensures they will progress into the types of
leaders employers want and need. Coaching sharpens their leadership skills and polishes their
management and interpersonal skills. Coaching also helps high-potentials become better bosses,
which improves the retention of their subordinates‖ said Patty Prosser, chair of OI Partners.
Coaching is a powerful retention tool because it signals to high-potentials that employers are
committed to their career development. ―Receiving personalized, laser-focused coaching on
specific leadership and communication skills is highly valued by high-potentials in the Gen X
and Gen Y generations. Many in these generations are willing to go above and beyond in their
career pursuits, but don‘t always understand the political ramifications of their actions,‖ added
Prosser. OI Partners recommends that companies be pro-active in touching base with their high-
potentials, not just in the senior management ranks, but also in middle management.
The top 8 ways that companies are trying to retain high-potential employees are:

1. Developmental coaching
2. Better compensation and benefits
3. Flexible hours and schedules
4. Mentoring programs
5. Tuition reimbursement
6.Casual dress codes
7.Telecommuting
8. Retention bonuses

Resume based information is not enough to identify and assess a high potential employee.
"Determine the characteristics and traits of the individual whom you believe will succeed in that
job. The top management has to analyse overall behavioural traits, passion, leadership qualities,
performance and the readiness of an employee to take the next role," says Rajendra Ghag,
executive vice president, HR and Administration, HDFC Life.

"Just as an organisation needs the right talent to drive its business objectives, people need the
right environment to grow and achieve their career goals. At the same time, ignoring, or poorly
managing high potential can cripple the ability to executive the company's business strategy,"
states Ashok Ramchandran, director, HR, Vodafone India.
The cultural environment of organisations has immensely changed in the last few years. "Today,
as businesses focus on maintaining a pro-active attitude amongst the team, they should look for
the same in potential employees while hiring. An employee should be keen, and should aspire to
grow with the organisation. This will come across in the meticulous work ethic even in the
smallest of tasks," says Minal D'Rozario, director, Ideosphere Consulting.
The intent of working has to be analysed; one has to understand the intent beyond just the pay
packet. "High potential candidates are quite clear of their vision but they must possess, the skills
.The right balance needs to be found; this may be different for each organisation and position,"
states D'Rozario.

Challenging tasks
A high potential employee will never back down from a challenge, the organisation needs to
provide them with challenging situations that will allow employees to prove themselves. "When
it comes to retaining high potential employees it's a mutual give and take relationship,
empowerment by giving equal opportunities, motivation that creates the interest supported with
focused approach has been working in today's scenario," adds D'Rozario.
Communication
Many employees actively seek other opportunities, while they are on the job, so organisations
should inform them about employee plans for instance, if they are considered for the next role
etc. Clear, transparent, honest and timely communications cultivate employee involvement and
empowerment.
Trust
Positive ambience at the workplace matters for people to continue to it for a longer time. The
high potential employee must be able to trust the management and have confidence in them. He
must take pride in the company and be feel respected, recognised for his commitment. He should
have a say in the major strategies of the organisation for him to feel important and trust the
management.

Appreciation, rewards and incentives

Within a reasonable space based on their experience and ability, the employee should be given
more responsibility and shown appreciation when they are able to perform at a great level. A
high performance employee will value an appreciation mail from senior management rather than
just a higher monthly pay check. Monetary rewards, bonuses raises, tied to accomplishments and
achievement, help retain employees.
Enrich and mentor them
Identify and nurture such employees by paying special attention to them. Once talent is
identified, employees need to know the road map for their development and growth path.
"Rewarding performance with innovative development programmes that differentiate your high
performers," states Ghag. Another way to retain employee is to support employee development
and career progression so enroll them or some enrichment programme.

An organisation should have leadership development efforts which are well integrated across all
levels. Such tailor-made developmental programmes can help an organisation to groom and
retain critical talent pool within the organisation.
 Chapter 8
How to manage high-potential employees

A big part of a manager‘s job is to identify who is contributing to the overall success of the
company and who needs to pull their socks up.
However, the temptation is to concentrate too much on the staff members who need the most
help, while allowing high-potential employees to regulate themselves.
While they may enjoy the freedom to begin with, if left to their own devices too long they could
suffer from a lack of motivation.
This can result from them feeling ignored, overworked and underappreciated, which in a worst-
case scenario could see them fleeing to your biggest competitor.
Here are some top tips for effectively managing your rising stars, ensuring they achieve their full
potential and remain satisfied in their job.

Pair them with mentors

Partnering them with an effective mentor (which includes you) who is more experienced and
knows the ropes will ensure they get the best possible training and development from an early
stage.

This will make them feel engaged and important, and provides them with someone to bounce
ideas off and who will offer detailed feedback.

Not only this, you will have someone to call on should your more experienced staff take holidays
or phone in sick, providing a makeshift contingency plan.

An additional benefit is that your seasoned veteran may also feel honoured to be given the role of
mentor to some of the company‘s prospects – they may even learn a thing or two themselves.

Don’t bog them down with trivial duties

Your high-potential employees will already be ambitious, driven and capable – so wasting these
attributes by giving them mundane and trivial tasks is of no benefit to anyone.

Giving them visibly important assignments will not only make them feel valued, you can rest
assured they will throw all their effort into making them a success. While you may be reluctant
to give high-profile duties to those showing potential, they need to be taken out of their comfort
zone and throwing them in the deep end will ensure they get their hands dirty early.Remember,
they will probably make mistakes but that is a valuable part of workplace development.

Strike the right communication balance

As mentioned earlier, it can be easy for managers to simply let their high-potential employees
fend for themselves.
This is because they do not need hand-holding and are adept at motivating themselves, and it is
important not to stifle them by looking over their shoulder every five minutes.
But failing to acknowledge them at all – or overburdening them with thankless jobs because they
are a safe pair of hands – also isn‘t ideal.
Consider communicating to your high-potential employees that you value their opinions, see
great things ahead for them and encourage them to come to you with ideas of how to improve
business processes.
Also make sure to give regular performance assessments, as your best performers will always be
eager to see how they are doing and learn ways to improve.
Invest in training and development opportunities
Highly motivated and goal-orientated individuals will require new challenges to remain engaged
in the workplace.
Punctuating their regular duties with training and development opportunities will ensure they
don‘t get bored in their current role, while facilitating their progress into higher positions.
Don‘t be afraid to think outside the box. Many businesses offer certifications and courses, but
there are other ways to incentivise them through learning.
Are there opportunities to travel within the job? Preferably to overseas branches? A change of
scenery and the chance to travel the world will be well valued by your up-and-comers.
Identifying and Developing High Potential Employees

You‘ve heard it a million times before: It‘s far more efficient and cost-effective to retain and
develop your current employees than to have to recruit and hire new ones. But with every
employee being different and performing at different levels, how do you realistically evaluate
their potential and develop them accordingly?
The site, The New Talent Times, which offers strategies for building and managing today‘s
workforce, suggests identifying the ―high potentials‖ vs. the ―high performers‖ on your staff.
These two descriptions may sound similar, but knowing the difference—and there are big
differences—is the key to being able to see your employees clearly and objectively. Performance
and potential aren‘t mutually exclusive, and most people have a combination of both.
You probably know your high performers. They consistently exceed your expectations and
always get the job done, regardless. But this doesn‘t mean they‘ll do as well in a different or
higher-level job—or even that they would want to. With high potentials, on the other hand,
they‘ve demonstrated some initial aptitude and have future potential to make significant
contributions to your business. But they‘re difficult to identify. Their abilities in areas like
change management or learning are overshadowed by the more obvious skills of high
performers. And if you‘re like most, you may not know how to identify and assess potential. It‘s
just a lot easier to look at performance.
.
Citing a CLC (Corporate Leadership Council) study that contends that a quarter of high-potential
employees want to change companies in the next year, she lists six ways you develop employees
to re-engage them:
Stimulate them with challenging work, recognition and growth opportunities.
Test them to evaluate their abilities, levels of engagement and future aspirations.
Manage them from a higher level where there‘s more access to opportunities.
Challenge them so they can stretch and develop new skills.
Recognize them through differentiated compensation and other recognition tools.
Engage them in areas like strategic planning and future strategies for the business.

Contributor Victor Lipman writes on forbes.com that business owners and managers ignore
employee development at their own peril and refers to a recent Harvard Business Review study.
Employees reported not getting much in the way of training, mentoring and coaching (which
they value highly) and consequently, were pretty much in a non-stop job hunt. Lipman
acknowledges that there are legitimate reasons for letting development fall by the wayside, like
not having the time for it and needing to focus most on the here and now. But he also suggests
that finding ways to fit in thoughtful employee development efforts is just good business sense:
Your people will genuinely care if you take a genuine interest in their futures.
Developing people builds loyalty, and loyalty builds productivity.
Good people want to advance and appreciate real support in getting there.
The best news of all? Lipman stresses that development doesn‘t have to be elaborate or costly.
It‘s more a matter of good management: Taking one-on-one time to really get to know and
understand your employees…their skills and needs…and providing them the guidance to fill in
gaps. You‘ll not only have the benefit of employees who are more skilled and more satisfied, but
long-term loyalty will naturally follow.

How to Nurture High Potential Employees

Of course all employees are valuable and should be treated accordingly, but in most workplaces
there are certain staffers that are disproportionately valuable in comparison to their
compensation. It‘s wonderful to have one or two of these rare albatrosses on staff, but you can
move your company ahead by leaps and bounds if you can build teams of high potential
employees.
High potential talent is, as defined by a recent study on Strategic Human Resources
Management, ―employees whose particular skills and knowledge value make them vital to
organizational success.‖ The study added, ―High potential employees are highly talented and
create a disproportional amount of value from the resources made available to them by the
organization.‖

As an HR pro, this has got to intrigue you. Talent that can willingly produce far more output than
expected based on the wages, benefits and tools accorded to them are a boon to the bottom line.
So how can you attract these rare birds? And if you have them, or acquire them, how do you
keep them engaged, performing well and nurtured?
It‘s important that you be able to identify these creative, innovative, complex problem solvers
and develop plans to manage this talent effectively to ensure retention. The notion that they need
to be managed differently is a good reason to put these uber-staffers onto a team (or teams)
together. Having them work side by side with average staffers may create inequitable
management complaints, but clustering them can keep everyone happier.

Here are some of the recommendations the study offers for creatively corralling high potential
employees:
Admitted autonomy. These are not staffers you need to aggressively supervise – nor should
you. They need to know they have the freedom to think outside all of the boxes and solve
problems for the organization.

Equip them. If Iron Man doesn‘t have the tools, he can‘t build the metal super suits. Be prepared
to provide the tools needed so these higher-level thinkers can produce results from you. This is
critical!

Carve out borders. If you want great things from high potential employees, don‘t bog them
down in administrivia. Let them do what they do best and leave off paper pushing, rote staff
meeting and other optional detractors from their core function.
Tolerate mis-steps. Most great innovations have sprung from the ashes of failed attempts. Bell
didn‘t invent the phone in one go and Fleming almost tossed out the lab error that resulted in
penicillin. Genius evolves out of failed trials. Don‘t expect every idea to be a winner.

Goals, not guidance. High potential employees don‘t need to be told how to do the job or even
why you need them to. They are highly motivated people who are curious problem solvers. Just
tell them what you need – the goal or objective – and let them go to it!

Grab a gaggle. If you‘re a fan of House, you‘ll remember he needed a team of smarties to
bounce his genius theories off. High potential employees need like-minded thinkers to
collaborate with. So grab yourself a fancy hat and accumulate an enviable stable of Derby-
worthy mental horse-flesh.
Accommodate accordingly. Higher potential employees need a less restrictive environment.
Mandating an 8:00 am start time, set lunch hours or other restrictive rules will dampen creativity
and demoralize this type of worker.
Tips for managing high potentials
If you‘re not feeding these HiPos in the form of providing challenging assignments, achievable
stretch goals, opportunities for advancement (salary, title, and responsibilities), and investing in
their ongoing development then all you‘re really doing is providing an unintentional talent
pipeline for your competition. Good luck with that!
Here are some talent development tips I find helpful for high-potentials:
Meet with your high-potentials regularly, not just at appraisal time. Review
progress on their development plans and on their career planning. If there are
stumbling blocks, ask: ―What do you need to successfully meet this goal?‖ Do your
best to provide what they need.
Find out about the training and development opportunities available in your
organization, and pass this information along. Encourage high-potentials to participate
in these activities, and allow work time for this whenever possible.
 Learn how to empower high-potentials to contribute at higher levels through
providing special assignments, constructive feedback, and targeted development
opportunities.
Be a role model for development by openly pursuing learning and taking risk.
Look, we all know how important it is to properly identify these high-potentials and give them
the tools they need to succeed. It‘s not easy, it‘s certainly time consuming, and let‘s be honest –
we have a lot of other things on our plates that need attention.
I think most of you will agree with me though, that it‘s well worth the energy. The sooner we
realize the full potential of these overachievers, the better off our companies will be.
High Potential Programs

Maximizing Employee Potential

Your employees must be able to perform at their full potential in order to stay ahead of the
competition. Your managers need tools and information to get the very most from their people.

How can you maximise employee potential? Uncover an individual's inherent capabilities
Put the person in a job that builds on his or her strengths Provide targeted developmental
opportunities Help front-line managers coach and motivate

Chapter 9
Developing Employee Potential
Employee development is not just the responsibility of the employee. In today‘s diverse
workforce, business practices have evolved to reflect economic competitiveness in developing
and retaining talented employees. Organizations are continually seeking new solutions to assess,
understand, and strategize employee development. One of the greatest challenges faced by
managers is the strategic personal development of their employees in order to ensure effective
use of their talent. To properly manage this vital resource, they must identify their challenges and
then implement employee development and training for improvement. Profiles International‘s
employee development solutions will help managers effectively manage, motivate, and empower
employees.
Effective management requires insight about the core characteristics of individuals. Profiles
International provides invaluable tools for increasing consistency in managing employees. What
makes Profiles International‘s tools the leading tools in the industry is our exclusive Job Fit
technology. Good management is all about understanding "fit" and how employees fit with their
job, their manager, their team, and the organization. By understanding fit, managers have greater
knowledge of how to effectively interact with and coach the individual employees they manage.

Understanding Job Fit

Job Fit technology is the most advanced, state-of-the-art solution available today for measuring
human potential and predicting job performance. Using Job Fit as a key part of your employee
development solution, you will be able to uncover why some of your employees perform at
extraordinary levels while others, who appear to be equally qualified, are only average
performers. Job Fit is also valuable as a tool that predicts performance and behavior.
Profiles International‘s employee development solutions provide a variety of reports to help
measure an employee‘s core characteristics and understand fit. Coaching reports, for example,
are a manager‘s guide to helping the people they manage develop better work habits. The report
has specific suggestions for improving employee performance so it approaches the productivity
of the company‘s top performers. Using the reports to direct the development of employees
enables managers to develop their leadership abilities.
By including Job Fit technology as a key factor in your process for employee development, your
managers will be significantly more effective.
The first part of being an effective manager is knowing your own strengths and limitations. The
second part is knowing what motivates your employees so you can help them reach their full
potential.

Our approach clarifies what drives you and each of your employees so you have the insights and
perspective you need to make your most important employee development decisions.

1. Do your key players feel valued and motivated by their career path?
2. Are people in positions that play to their strengths so that productivity is enhanced?
3. Are you vulnerable to losing employees to a competitor?
4. Do you spend more time with poor performers than you do with your best performers?

Improve Employee Performance

We can create a customized, in-depth developmental plan for each of your employees by
pinpointing their abilities, motivations and growth opportunities. When individuals have clear
expectations and learn specific strategies for maximizing their potential and improving
performance, they feel valued, motivated and invested in their own professional development, as
well as in the growth of the company.

Develop New Managers

Most people in managerial positions have had little or no management experience or training
before taking on their current roles. And problems often occur because the individual's initial
expectations, as opposed to the real responsibilities of the position, are entirely different. When
people are promoted to management positions for the first time, it is vital that appropriate tools,
techniques and guidance are provided to make a successful transition from being a member of
the team to leading the team. Caliper can help new managers hone the skills required for making
decisions, managing priorities, developing others, communicating effectively and getting
projects completed through delegation.
Recognizing and Developing High-Potential Employees

Pinpointing and developing high-potential employees is the main ingredient to ensuring your
organization's continued success. Whether it's preparing them for a high-level role or helping
them take on more responsibilities, acknowledging your top performers will help you retain
valuable employees and set them—and your company—up for future success. Caliper can work
with you to discover the competencies necessary for success in your organization, to determine
who has leadership potential and to begin development programs so your high-potential
employees are ready take on more responsibility when you need them to.

4 Steps for Developing Employee Potential

Author: Joseph "Bud" Haney | Source: HCI | Published: March 21, 2013
Imagine the future of your organization. Your company is brimming with the potential found
within each of your employees. Developing this potential is a way to strengthen your employees
and your company in the same move. After all, it is people that make up a company and can
drive it toward success.

After spending money and time finding a job candidate, it is in developing employee potential
that you can begin to reap the benefits of your hard work, but it‘s important to use a specific,
targeted approach. Follow these four steps to help with developing employee potential:

1. Get to know your employees

Understanding the individual personalities of your employees can help you better understand
how to coach them and develop their skills. Assessing specific strengths and weaknesses will
help you know what areas can be improved, and may also help identify potential problems from
the start. Getting to know your employees will also help you discover the specific learning style
that is best for them. Some employees might need feedback at every turn, while others can carve
out their own route in reaching their potential.

2. Set specific achievement goals.

Once you know your employees, you can more effectively design a coaching plan with specific
and measurable goals. Goals will keep you and your employee on the same page and ensure that
clear expectations are set up at the onset of a development program. Be specific about what you
want them to achieve. This information can also help pair new employees with mentors and other
more informal development methods.

3. Boost employee engagement.

Targeted employee development will be difficult to achieve unless employees have a clear
understanding about how their development is related to the growth of the company. It‘s
important that employees are committed to their company so that they will want to work on
behalf of the organization‘s goals. This is not as simple as satisfaction or happiness. Employee
engagement is a deeper commitment that can be fostered with frequent, positive feedback and
constructive criticism.

4. Reinforce skill development.

Continue to coach your employees even after they reach specific individual goals. Continue the
learning and development process by evaluating and addressing new problems as they arise.
Many companies spend a disproportionate amount of time training employees at the start of their
job and then let individual development wane. Make training an ongoing effort.

How to Develop Strengths in Employees

If you find that some of your employees are demonstrating strengths in certain areas, consider
developing their potential. Building upon employee strengths in a manner that will enhance
productivity for your business is a smart investment to make. Review the following list of steps
as you look for ways to develop strengths in employees.
STEPS:-
1.Inform all your employees that you are willing to provide career growing
opportunities. Make it a known fact to all your employees that if they have a talent that they
would like to develop to enhance their career within the company, you are willing to nurture that
strength. Offering strong support and encouragement often motivates employees to actively
discover their strengths.

2.Get to know your employees and their abilities. You can do this by meeting with them
individually and discussing their strengths and weaknesses as they see them. You can also
understand your employees' strengths by analyzing their productivity.

3. Match employee strengths with the needs of your business. Recognize the strengths that are
being demonstrated with enthusiasm and determine how they can be utilized to fill neglected
areas of business. For example, if you are noticing that an employee demonstrates talents in
conserving energy and resources, then consider putting that person in charge of sustainability.
4. Provide training opportunities for those employees who show initiative in certain
areas. Let them know what qualities you see in them, and make sure that they are willing to
improve upon their strengths. You don't want to invest in anyone who is not willing to put in the
effort to utilize their strength and use it to help grow the company.

5. Consider cross training with staff that have strengths in certain areas. Partner those
talented employees with staff members who show a weakness in that same area. Such
opportunities will allow the strong employees to develop their talents and training abilities. The
trained employees will be given the opportunity to strengthen their talents.

6. Allow employees with potential to be responsible for their own career. Offer opportunities
such as special assignments and activities off-site, and let your staff members decide if they want
to pursue them. If certain employees choose not to take advantage of opportunities that can
enhance their careers, don't force them. A major part of developing strength is in the initiative
and drive. If an employee does not demonstrate either, then it may not be worth the investment.
7.Transform an employee frustration into a positive opportunity. Again, if an employee is
frustrated by the wastefulness of other employees, or the company as a whole, suggest that this
person find a way to resolve the problem. Present a timeframe for coming up with the solution,
and arrange a meeting at that time. Offer your support in strengthening the resolution, and offer
tools and resources that encourage the implementation of the solution. For example, if the
employee puts together a sustainability plan, then offer a budget or tools to assist in
communicating the policies as well as executing the plan.
In today's business climate, the pressures on us as individuals or organisations to improve
productivity, reduce costs, increase profitability or expand market share are immense. New
technologies, new demands and new challenges emerge daily. The market place expects more of
us, our people expect more of us and we have to ask more of of ourselves.

"The way we were yesterday doesn't guarantee success today!"

To stay ahead in this environment, we and our organisations need ready access to new skills, new
models, new development processes and new ways of thinking.

Potential Development offers a range of Organisational and Professional Development Services

specifically designed to meet these needs. These services include:

• Coaching and Mentoring

• 360 Feedback
• Leadership and Management Development Workshops
• Facilitation of Planning Sessions and Team Development Workshops
• Training for Trainers and Coaches

These services are effective, enjoyable, and ethically sound and are underpinned by the
following principles:

• Everyone is entitled to be treated with dignity, trust and respect

• At any point in time a person is doing their best with the resources they have
 • We all seek some sense of meaning, purpose and value in our work and our lives
Self awareness and personal development are key to individual and organisational
effectiveness.

We have successfully provided these services and worked with these principles in a range of
large and small organisations for over twenty years. To discuss how they could help you or your
organisation call me, Dave Burton, for an initial discussion; no charge, no obligation!
 Chapter 10
High Potentials vs. High Performers

Mistaking a high-performing employee for a high-potential employee can be costly. As Vincent

van de Belt, a consultant at Cubiks, points out, ―If an organization is not able to distinguish
between performance and potential, it will have difficulty identifying talent.‖
This happens all the time. A top-performing sales rep is promoted to sales manager, and
struggles to transition from killing his sales goals to helping a team of junior reps kill theirs.
Meanwhile, the junior rep whose hard work has facilitated the success of sales teams for years
feels undervalued, and decides it‘s time to start looking for growth opportunities elsewhere. Both
scenarios hurt morale and drive turnover.
Performance and potential are not mutually exclusive. Van de Belt suggests that ―people always
possess a combination of both.‖
But a manager who understands the difference will be more effective in engaging and retaining
employees who exemplify aptitude in one or both. To that end, this article outlines strategies any
manager can apply to identify, assess, and develop high potentials and high performers.

Identifying High Performers and High Potentials

High performers stand out in any organization. They consistently exceed expectations, and are
management‘s go-to people for difficult projects because they have a track record of getting the
job done. They‘re great at their job and take pride in their accomplishments, but may not have
the potential (or the desire) to succeed in a higher-level role or to tackle more advanced work.
High potentials are birds of a different feather. Malcolm Munro, President at Total Career
Mastery, LLC, says that ―High potentials have demonstrated initial aptitude for their technical
abilities and…have future potential to make a big impact.‖ In short, they can do more for the
organization–possibly much more–with the caveat that high potentials who are consistently low
performers are rarely strong candidates for management roles.
High potentials can be difficult to identify, for two reasons. First, high performance is so
blindingly easy to observe that it drowns out the less obvious attributes and behaviors that
characterize high potentials–like change management or learning capabilities.
Second, few organizations codify the attributes and competencies they value in their ideal
employees–which means that managers don‘t know precisely what to look for to assess potential.
As a result, most managers focus exclusively on performance, and that can be a problem.
―When performance is the only criteria employees are evaluated on,‖ warns Brian Kight,
Director of Performance at Focus 3, ―high performers will be the only ones moving up–and your
high potentials will be moving out.‖
Don‘t get me wrong–you should definitely value and reward performance. If your end goal is to
build a more robust talent pipeline, though, performance can‘t be the only point of entry. Kight
advocates working with leadership to profile what constitutes excellence in key roles, and
communicating that to managers to help them identify high potentials.

Assessing Performance vs. Potential

Because employees possess varying degrees performance and potential, you should assess your
employees across both dimensions. Figure 1 provides a framework for identifying where an
employee falls in the spectrum.

High Performance Regularly exceeds expectations Sets standard of excellence in role

Lacks skills for success at higher level Model leadership candidate

Low Performance Little-to-no aptitude Above-average aptitude

Weak, unsatisfactory performance Inconsistent performance

Low Potential High Potential

Figure 1: Typical traits of performance vs. potential.

After you‘ve determined which quadrant an employee falls under, you can develop a plan for
employee development. ―Each of these categories requires a specific approach when it comes to
discussing development opportunities,‖ says van de Belt.
Development Strategies
In an ideal world, every employee in your organization would be a high performer with high
potential–but that‘s obviously not realistic. The appropriate question is how to move employees
toward the upper-right quadrant, or at least to the high-performance tier.
It‘s not always possible, nor always the desired goal (you might want to keep your high
performers right where they are, for instance). There‘s no one-size-fits-all strategy, but Figure 2
provides a general framework.

High Performance Keep them where they are, Keep them where they are,
or promote or promote

Constant encouragement Provide autonomy

Challenging assignments

Soft skill development

Low Performance Performance plan Pair with a High Performer

Termination New role better aligned with skills

Training

Test with more responsibilities

Low Potential High Potential

Figure 2: Development strategies to consider.

―High performers need constant encouragement and challenging assignments. Recognition is

key,‖ says Munro.
Kight agrees, pointing out that ―High performers tend to be lone wolves, working for themselves
and their own success.‖ As such, they want something to execute on a bigger scale. Give them
the independence and autonomy that allows them to thrive, and engage them with projects that
they can take full ownership of.
Alternately, Munro suggests pairing high-potential employees with established high performers
who can serve as mentors.
―They need to know that while they are high potential, they need seasoning. On-the-job training
is a great way to accomplish this.‖
As they develop a stronger understanding of the organization and their role in it, test the
capabilities of high potentials with more projects to manage, new hires to train, put them in
charge of an intern or two, or offer cross-training opportunities. If they do well, consider moving
them into a different role–perhaps one with more responsibilities–in which they may perform
better.

A Stronger Talent Pipeline for a Stronger Company

Your managers play a bigger role in building a pipeline of thriving talent than they may realize,
and it‘s increasingly important that you empower them to do this successfully. While employee
development is no cakewalk, failure to assess performance versus potential is a very real
business problem.
The good news is that it‘s a solvable problem. It simply takes dedication to identifying your
high-potential and high-performing employees, assessing their competencies and attributes, and
putting them on the path to success. It‘s time well spent.

Assess Potential V/S Performance

Even if your company is not currently in the market for a team of entertaining mercenaries, that
doesn‘t mean that you shouldn‘t be focusing on actively identifying and developing all-star
employees and giving management the tools needed to form their own A-Teams.
Technically, organizations should strive to have nothing but all-stars on their talent roster;
however, chances are that most companies are lucky if 10%-20% of their workforce is labeled as
‗high-performing‘ (there are many process-related reasons that account for this but that is a
whole other discussion). Unless you are willing to settle for an organization filled with B and C
Teams, you need to get tactical about the way you identify and develop top-talent.
The first thing to consider is employee performance vs. employee potential. Historically,
employee performance was the main driver in determining succession, rewards, and recognition;
however, recent years have shed light on the importance of considering employee potential when
creating development plans and performance strategies. Think of it this way – a seed doesn‘t
look like much next to a plant, but invest a little time and energy into it, and it has the potential
to become a flower or one of those neat plants that kills flies. You should think of identifying
your all-stars along the same dimensions – who is great now and who can be even greater
sooner?
The difference between high-performers and high-potentials:

High-performers give immediate return on investment, with estimates averaging from more
than 50% additional value, to as much as a 100% increase in productivity over average
performers. i

High-potentials are typically defined as those demonstrating high-level contributions,

organizational values, potential to move up to an identifiedposition within a given timeframe,
and potential to assume greater responsibility. i For example, some organizations operationally
define high-potential employees as those who are able to assume greater responsibilities within
the next two years and who exhibit a history of high-performance and leadership potentials; also
may be defined as employees who are able to advance two leadership levels within 4-8 years and
who score well on various assessment criteria.iv

Most high-performers are not high-potentials BUT all high-potentials are high-
performers.iii
The second thing to consider is a way of mapping performance vs. potential data in a way that
allows you to quickly identify the performance status of employees and the organization as a
whole. Luckily – the popular Nine-Box Talent Matrix does just that. It uses performance data
from 360 reviews, performance appraisals, peer reviews etc. and maps it along the potential data
from self-assessments, surveys, manager assessments etc. and tada! A real-time snapshot of
organizational health is available.
As you can see – employees that are in the blue section need to be rewarded and retained! They
are your A-Team – especially the top performing/top-potential employees. Efforts should be
made and strategies devised to hold onto those employees for as long as possible. Ensure that
managers are aware of who these individuals are, how to make sure that they are properly
engaged and satisfied in their roles, and what positions they are primed to grow into.
Employees located in green are your B-Team. They should be strategically developed and
monitored in an effort to push them into the next level. Managers should be prepared to assess
what is preventing better performance or how to handle high-performers with low potential.
Employees in purple are special cases. They are either all performance or all potential. One-on-
one meetings with the employee should be conducted to assess their level of engagement and
historical data should be revisited to locate possible trends or recent dips in performance or
potential. Efforts should be made to answer. What is going on with this employee, can it be
remedied, and how? Is the employee not given enough performance feedback? Have they been
given the opportunity to show potential? Are they engaged in their current role? Etc.
Lastly, people in orange can be problematic. Are the low performing / low potential employees
at the right place? What is preventing them from performing, why do they have such a low
potential? Is this a problem of motivation? How long have they been working there? Are they
just waiting for a better opportunity? How driven were they in the past? Many things should be
considered and acted upon – quickly.
I have read a few online posts that claim manually mapping the matrix is possible but to be
honest – I pity the fool who attempts it (couldn‘t help myself). There are far too many variables
(appraisal results, 360 results, self-assessment criteria, etc.) that should be included to attempt an
accurate mapping. Why not let technology do the work for you? With an automated EPM
software solution then there is no need to map this out manually as the software automatically
imports the results from appraisals, assessments, surveys, development plans etc. into the matrix.
If you are using an automated talent matrix, then opt for one with an adjustable performance vs.
potential sliding scale so that a more accurate drill down of performance can be conducted to
suite each department or role. CRG emPerform‘s succession manager offers the Nine-Box talent
matrix with this sliding scale.
 Chapter 11
Employee Engagement In Potential Building Programs

Employees aren‘t human capital assets or resources—they are unique and talented individuals
entitled to respect and the pursuit of purpose in their lives. They congregate in organizations to
perform meaningful work in a community with others of like mind to achieve their own goals
and to make a difference in the world or in other peoples‘ lives. And they like to feel good about
and enjoy the time they spend working in those organizations.
As enlightened leaders, we owe this to all our employees, as well as creating a work environment
that nurtures their personal and professional development while they attend to achieving the
goals of the organization. This isn‘t a passive exercise though—if we truly want to bring out the
best in the people working with us and for us, we must pay attention to them, their efforts, and
the results of their labor.
Enjoyment and engagement in work also depend on how much meaning employees can attribute
to their efforts. Leaders who want to help their workers become more engaged and productive
should impart some meaning in the work—not just through a mission or vision statement—but
by allowing employees to feel a sense of completion and ensuring that a job well done is always
acknowledged. Leaders who are present and attentive are a huge positive influence on employee
satisfaction and productivity.
While every employee deserves this attentiveness from their leaders, the best and brightest in our
workforce often demand it. High-potential and skilled knowledge workers want to contribute
based on their strengths; be given autonomy over how they do their work, and be convinced
rather than controlled. This attitude may not fit well with command-and-control organizational
hierarchies, but it‘s an essential mind-shift for leaders who are serious about attracting and
retaining the best talent.

Unfortunately, many employees—and especially the rising stars—have become increasingly

disengaged in their work and are actively seeking new employment opportunities, according to a
study by the Corporate Leadership Council (CLC). The study found that 25 percent of
employer-identified, high-potential employees plan to leave their current companies within the
year. However, the CLC identified six tips leaders can use to identify, re-engage, and more
effectively manage high-potential employees:
1. Stimulate. Emerging leaders need stimulating work, recognition, and the chance to grow. If
not, they can quickly become disengaged.
2. Test. Explicitly test candidates for ability, engagement, and aspiration to make sure they‘re
able to handle the tougher roles as their careers progress.
3. Manage. Having line managers oversee high-potential employees only limits their access to
opportunities and encourages hoarding of talent. Instead, manage these high-potential employees
at the corporate level.
4. Challenge. High-potential employees need to be in positions where new capabilities can—or
must—be acquired.
5. Recognize. High-potential employees will be more engaged if they are recognized frequently,
so offer them differentiated compensation and recognition.
6. Engage. Incorporate high-potential employees into strategic planning. Share future strategies
with them and emphasize their role in making them come to fruition.
Although the CLC study focused on high-potential employees, their recommendations are sage
advice when dealing with any employee. The bottom line is, don‘t take your employees for
granted.While engagement may be hard to sustain, it‘s infinitely easier when you nurture,
recognize, stretch, and develop your team.
Now, each of these has messaging, or themes, that could be related in some fashion or another to
Corporate America – risk/reward; entrepreneurial spirit; getting ahead with good deeds and jobs
well done; dropping down a few rungs on the ladder for our mistakes, etc., etc.
However, I‘ll spare you my trite connections (Connect Four!) on these beloved games, and
instead turn my attention towards the world of the hungry, hungry High-Potentials.

Defining a high-potential
Let‘s first talk about in plain, simple terms what it means to be a high-potential, or HiPo.
Generally speaking, high-potentials are employees who can develop into leaders, rather than
those who just do the job. Research by the Harvard Business Review shows high potentials
represent the top 3 to 5% percent of a company‘s talent.
High-potential employees are generally considered highly intelligent, talented, ambitious, and
extremely motivated. They represent the company‘s values and continue to produce work that is
above and beyond what is required.
When it comes to grooming new managers and leaders, you need to identify the right employees
as high potentials because obviously not everyone is qualified to be a leader. Once these high-
potentials are identified, the company must ensure it is providing these workers with the
resources to grow and evolve within the company.
However, it seems most companies are failing to do so.

Taking our best for granted

After all, we spent a meaningful amount of time and energy defining the roles these individuals
would fill, interviewing them, training them, and providing on-the-job feedback; seemingly so
that they would stay with our organization and succeed. It reminds me of all the companies out
there vying for our personal business, only to finally grab our attention, sign us up, and then
promptly take us for granted. You know who you are.
Getting back to the ―Why,‖ talent development is often not deemed a priority, or is grossly
underfunded. Do you think some companies, or managers within those companies, simply regard
training and development as distractions from work and barriers to productivity? Perhaps, they
view employees only as resources to complete today‘s assignments? Another cog in the wheel –
easily replaced should one break down.
Take a few seconds to think of a skilled employee at your company, and contemplate the
difficulty of having to replace that employee. How long would it take to train a replacement?
Does the thought scare you a bit? It should. It scares me.
This is why so much emphasis needs to be placed on talent development.

Unlock High Potential In Employees

Hudson‘s high potential programs identify high potential talent within your organisation. They
assess high potential employees against determined leadership success criteria and use this
assessment to identify each high potential‘s strengths and weaknesses. These insights are then
applied to develop tailored and targeted developmental activities to enhance your talent pool.
 Identifying High Potential Employees
Hudson‘s tailored high potential programs help develop and retain talented future leaders -
identifying a pool of in-house talent that can be closely monitored and developed in line with
your organisation's strategic plan. Hudson provides expert advice for developing your talent
strategy, identifying high potentials, determining their development levers and barriers through
to action planning and development.
Hudson has identified five key indicators of high potentials:
 the ability to manage complexity and change;
 mental efficiency;
 personal drive
 people leadership and
 relational and cultural sensitivity
Our methodology can be linked to your existing organisational framework and development
opportunities currently offered within your organisation. High potential programs are best suited
to fast-track individuals who have handled increasing responsibility.
Developing High Potential Employees
Hudson's high potential programs help your organization to:
 Increase engagement levels of your most valuable employees
 Retain talent and reduce turnover risk
 Support development and succession of your talent pool
 Ensure your organisation has the intellectual property, human resources and talent to cope with
future needs including attrition and growth
 Support continuous achievement of business objectives.
Maximising a High Potential Program
To maximise effectiveness, High Potential Programs need to be consistent, sustained, have a
clear purpose and can be evaluated against business objectives such as retaining key staff, filling
roles internally, filling roles quickly, and higher performance from high potential employees.
Common elements of effective programs are high touch, individually customised development
action plans supported by mentoring, coaching and exposure to new experiences.
There is often a misconception that High Potential Programs are high cost, yet the key elements
of a successful program are within the reach of most organisations, although, it is imperative that
the organisation delivers on its promises with a long-term view to developing, retaining and
accelerating the careers of high potentials.
In conclusion, organisations should not be afraid to evaluate their current employees and
approach their high potentials in a formal way. The strength of organisations the world over are
always, their people. Having the courage to differentiate and be consistent in your talent
management, will mark your organisation out for future success.

Objectives of Potential Developing Programs

Following are the objectives:
Exposure to systemic and strategic views
Providing knowledge and skills for accelerated growth at the organizational and personal
level
Establishing a good networking group as a model for collaboration within Amdocs
Supporting personal development

High Potential Program Design

"You must capture and keep the heart of the original and supremely able man before his
brain can do its best."— Andrew Carnegie
High Potential employees (HiPos) are an organization‘s next generation of leaders. Given the
costs and high failure rate associated with hiring new leaders, HiPo management is a key
business process. Axiom helps clients establish the right criteria and development intitiatives to
build a strong field of internal candidates for future leadership positions. Our approach towards
improving a client‘s internal leadership pipeline binds employees to the organization, develops
them in effective ways, and builds valuable win/win relationships.
We believe that
An internal leadership pipeline is a hallmark of successful organizations. Invest in your
HiPos by providing them with the right set of development initiatives to improve themselves
and realize their full growth potential.
 HiPos should be identified as early as possible and responsibility for their development
should be owned by senior management, not HR.
High performance does not equal high potential. It is important to understand the concept of
"ceiling potential" versus "transitional potential."
HiPo identification is often overly subjective and based on a "cloning" reflex that excludes
women and minorities;
HiPo development should be a lifetime process allowing the organization to grow its own
future leaders.
Our Approach
Define and establish the right identification criteria and processes.
Set up Talent Review processes and committees, which review the nominated candidates and
follow-up on realizing the full growth potential of HiPos.
Advise and support companies in their communication process with HiPos as they progress
in their careers.
Validate the "transitional potential" of HiPo candidates in offsite development centers and
create in-depth personal development plans.
Implement Learning Centers where HiPo‘s, senior management, coaches and assessors meet
and create a multitude of insightful learning opportunities.
Develop suitable sets of development actions and career steps that promote engagement and
retention through a) on-the-job training and practical assignments, b) mentoring programs,
and c) coaching and management training.
Benefits
The certainty that internal future leaders are correctly identified and guided to realize their
growth potential.
Reduce the dependency on external "superstars."
Improve the success rate of leadership transitions and succession management.
Help solidify the employer brand and attract top young talent to the organization.
Mitigate the risk of unforeseen leadership gaps.
The Amdocs High Potential Program aims at identifying and cultivating a pool of outstanding
leaders, equipped with the skills and capabilities to hold future senior leadership positions in
Amdocs. The program - a one-year process with formal seminars and activities - is derived from
the company‘s business strategy and based on our uncompromising strive for excellence.
It focuses on leadership skills, such as strategic thinking, managing collaboration and coping
with high levels of complexity, while providing the participants with the knowledge and mind set
needed to lead change.
 Chapter 12
The Capability Approach

The capability approach (also referred to as the capabilities approach) is an economic theory
conceived in the 1980s as an approach to welfare economics. In this approach, Amartya
Sen brings together a range of ideas that were hitherto excluded from (or inadequately
formulated in) traditional approaches to the economics of welfare. The core focus of the
capability approach is on what individuals are able to do (i.e., capable of).

Assessing capability

Initially Sen argued for five components in assessing capability:

1. The importance of real freedoms in the assessment of a person's advantage

2. Individual differences in the ability to transform resources into valuable activities
3. The multi-variate nature of activities giving rise to happiness
4. A balance of materialistic and non materialistic factors in evaluating human welfare
5. Concern for the distribution of opportunities within society

Subsequently, and in collaboration particularly with political philosopher Martha Nussbaum,

development economist Sudhir Anand and economic theorist James Foster, Sen has helped to
make the capabilities approach predominant as a paradigm for policy debate in human
development where it inspired the creation of the UN's Human Development Index (a popular
measure of human development, capturing capabilities in health, education, and income). In
addition, the approach has been operationalised with a high income country focus by Paul
Anand and colleagues. Furthermore, since the creation of the Human Development and
Capability Association in the early 2000s, the approach has been much discussed by political
theorists, philosophers and a range of social sciences, including those with a particular interest in
human health.

The approach emphasizes functional capabilities ("substantive freedoms", such as the ability to
live to old age, engage in economic transactions, or participate in political activities); these are
construed in terms of the substantive freedoms people have reason to value, instead
of utility (happiness, desire-fulfillment or choice) or access to resources (income,
commodities, assets). Poverty is understood as capability-deprivation. It is noteworthy that the
emphasis is not only on how human beings actually function but also on their having the
capability, which is a practical choice, "to achieve outcomes that they value and have reason to
value". Someone could be deprived of such capabilities in many ways, e.g. by ignorance,
government oppression, lack of financial resources, or false

Functionings

In the most basic sense, functionings consist of ―beings and doings‖. As a result, living may be
seen as a set of interrelated functionings. Essentially, functionings are the states and activities
constitutive of a person‘s being. Examples of functionings can vary from elementary things, such
as being healthy, having a good job, and being safe, to more complex states, such as being
happy, having self-respect, and being calm. Moreover, Amartya Sen contends that functionings
are crucial to an adequate understanding of the capability approach; capability is conceptualized
as a reflection of the freedom to achieve valuable functionings.

In other words, functionings are the subjects of the capabilities referred to in the approach: what
we are capable, want to be capable, or should be capable to be and/or do. Therefore, a person‘s
chosen combination of functionings, what they are and do, is part of their overall capability set
— the functionings they were able to do. Yet, functionings can also be conceptualized in a way
that signifies an individual‘s capabilities. Eating, starving, and fasting would all be considered
functionings, but the functioning of fasting differs significantly from that of starving because
fasting, unlike starving, involves a choice and is understood as choosing to starve despite the
presence of other options. Consequently, an understanding of what constitutes functionings is
inherently tied together with an understanding of capabilities, as defined by this approach.

Capabilities

Capabilities are the alternative combinations of functionings a person is feasibly able to achieve.
Formulations of capability have two parts: functionings and opportunity freedom — the
substantive freedom to pursue different functioning combinations. Ultimately, capabilities denote
a person‘s opportunity and ability to generate valuable outcomes, taking into account relevant
personal characteristics and external factors. The important part of this definition is the ―freedom
to achieve‖; the reason being, if freedom had only instrumental value — valuable as a means to
achieve an end — and no intrinsic value — valuable in and of itself — to a person‘s well being,
then the value of the capability set as a whole would simply be defined by the value of a person‘s
actual combination of functionings.

Nussbaum's central capabilities

Nussbaum (2000) frames these basic principles in terms of 'ten' capabilities, i.e. real
opportunities based on personal and social circumstance. The capabilities approach has been
highly influential in development policy where it has shaped the evolution of the human
development index HDI, has been much discussed in philosophy, and is increasingly influential
in a range of social sciences.

The core capabilities Nussbaum argues should be supported by all democracies are:

1. Life. Being able to live to the end of a human life of normal length; not dying
prematurely, or before one's life is so reduced as to be not worth living.
2. Bodily Health. Being able to have good health, including reproductive health; to be
adequately nourished; to have adequate shelter.
3. Bodily Integrity. Being able to move freely from place to place; to be secure against
violent assault, including sexual assault and domestic violence; having opportunities for
sexual satisfaction and for choice in matters of reproduction.
4. Senses, Imagination, and Thought. Being able to use the senses, to imagine, think, and
reason—and to do these things in a "truly human" way, a way informed and cultivated
by an adequate education, including, but by no means limited to, literacy and basic
mathematical and scientific training. Being able to use imagination and thought in
connection with experiencing and producing works and events of one's own choice,
religious, literary, musical, and so forth. Being able to use one's mind in ways protected
by guarantees of freedom of expression with respect to both political and artistic speech,
and freedom of religious exercise. Being able to have pleasurable experiences and to
avoid non-beneficial pain.
5. Emotions. Being able to have attachments to things and people outside ourselves; to love
those who love and care for us, to grieve at their absence; in general, to love, to grieve, to
experience longing, gratitude, and justified anger. Not having one's emotional
 development blighted by fear and anxiety. (Supporting this capability means supporting
forms of human association that can be shown to be crucial in their development.)
6. Practical Reason. Being able to form a conception of the good and to engage in critical
reflection about the planning of one's life. (This entails protection for the liberty of
conscience and religious observance.)
7. Affiliation.

Being able to live with and toward others, to recognize and show concern for other humans, to
engage in various forms of social interaction; to be able to imagine the situation of another.
(Protecting this capability means protecting institutions that constitute and nourish such forms of
affiliation, and also protecting the freedom of assembly and political speech.)

Having the social bases of self-respect and non-humiliation; being able to be treated as a
dignified being whose worth is equal to that of others. This entails provisions of non-
discrimination on the basis of race, sex, sexual orientation, ethnicity, caste, religion, national
origin and species.

Other Species. Being able to live with concern for and in relation to animals, plants, and the
world of nature.

Play. Being able to laugh, to play, to enjoy recreational activities.

Control over one's Environment.

Political. Being able to participate effectively in political choices that govern one's life; having
the right of political participation, protections of free speech and association.

Material. Being able to hold property (both land and movable goods), and having property rights
on an equal basis with others; having the right to seek employment on an equal basis with others;
having the freedom from unwarranted search and seizure. In work, being able to work as a
human, exercising practical reason and entering into meaningful relationships of mutual
recognition with other workers.
The measurement of human capabilities

General overview

While the conceptual debate on whether or not a core set of capabilities should be specified and
used as universal policy goals continues (for example, with differing positions taken by Martha
Nussbaum and Amartya Sen), the measurement effort has moved forward to identify measures of
capabilities. These measures are put forth as better indicators of development, well-being and
quality of life, specifically in comparison with output-based measures (also referred to as
resource-based), such as the Gross Domestic Product(GDP) and Gross National Product (GNP).

Women and cultural universals

Nussbaum attempts to apply the capability approach to feminism. While she acknowledges
feminism is multi-faceted and that utilizing universal claims about fundamental human principles
can be interpreted as imperialistic, she nonetheless argues that a universal approach is necessary
to battle injustices against women. This task Nussbaum has undertaken illustrates the fine line
between the respect and preservation of a culture and the conflicting agenda it has in
emancipating women from patriarchal structures.

Culture should not be understood as a monolithic entity to be dismantled, but rather what needs
to be examined is the socialization which occurs that allow certain cultures to persistently act
against the physical, psychological and social well-being of women. By chipping away at aspects
of a culture that endanger women does not eliminate the problem. Without the understanding of
the socialization of cultural values, attempts to tackle the "monolith of tradition and culture" can
only serve to treat the issue symptomatically. Symptoms of a patriarchal culture can be
alleviated, but there are no guarantees that such symptoms cannot return as the illness itself has
not been properly treated.

Monetary vs. nonmonetary measures of well-being

Monetary and nonmonetary measures of well-being are ideal when used to complement each
other. Understanding the various aspects of economic development process not only helps
address issues of inequality and lags in human development, but also helps pinpoint where
countries are falling behind, which once addressed can further promote well-being and
advancement.
Critique of output-based measures

The use of GDP and GNP as an approximation of well-being and development have been
critiqued widely, because they are often misused as indicators of well-being and human
development when in fact they are only telling about the economic capacity of a country or an
average income level when expressed on a per person basis. The fields of feminist
economics and environmental economics, in particular, offer a number of critiques. Critics in
these fields typically discuss gender inequalities, insufficient representation of environmental
costs of productions and general issues of misusing an output-based measure for unintended
purposes. In sum, the conclusion of Capabilities Approach is that people do not just value
monetary income, and that development is linked to various indicators of life satisfaction and
hence are important in measuring well-being. Development policies strive to create an
environment for people to live long, healthy creative lives.

Feminist critiques

Nussbaum highlights some of the problematic assumptions and conclusions of output-based

approaches to development. First, she points out that GNP and GDP do not take into account the
special requirements to aid those that are the most vulnerable, such as women. Specifically,
Nussbaum mentions that output-based approaches do not consider the distribution needs for the
varying circumstances of people, for example a pregnant woman will need more resources than a
non-pregnant woman or a single man.

Furthermore, feminist economists critique output-based measures because they do not account
for women‘s unpaid work, which includes child rearing and all the societal advantages that result
from a mother's work. Marilyn Waring, a political economist and activist for women's human
rights, elaborates on the example of a mother engaged in child care, domestic care and producing
few goods for the informal market, all of which are likely done simultaneously.

These activities have economic benefits when provided but are not valued in national accounting
systems and so her critique suggests that the definition of unemployment used in output-based
measures is inappropriate. This idea can be applied to much of women‘s work and it is part of
the critique that Waring offers, and that is, that women‘s work is invisible and that traditional
output-based measures do not consider women‘s unpaid work, or work in the informal sector,
gender inequalities and women‘s well-being (see the section titled ―Well-being‖ under Feminist
economics for more detail).

Environmental critiques

Another critique made by Waring is that the output-based measures do not factor in negative
consequences of economic growthand so commodities that lower social welfare (like nuclear
weapons) are considered a good input, the same can be said of the costs of cleaning up oil spills.
The ―anti-bads‖ or the defensive expenditures to fight "bads" are not counted as a deduction in
accounting systems Furthermore, natural resources are treated as limitless and negative outputs
such as pollution and associated health risks, are not deducted from the measures.

Technical and misinterpretation critiques

When GNP and GDP were developed, their intended use was not for measuring human well-
being, the intended use was as an indicator of economic growth and that does not necessarily
translate into human well-being. Kuznets has often made this point, in his words, ―distinctions
must be kept in mind between quantity and quality of growth, between costs and returns and
between the short and long run. Goals for more growth should specify more growth of what and
for what‖

Capabilities-based indices

The following are a few of the major indices that were created based on the theoretical grounds
of Capabilities Approach.

Human development index

The Human Development Index takes into consideration a number of development and well-
being factors that are not taken into account in the calculation of GDP and GNP. The Human
Development Index is calculated using the indicators of life expectancy, adult literacy, school
enrollment, and logarithmic transformations of per-capita income. Moreover, it is noted that the
HDI ―is a weighted average of income adjusted for distributions and purchasing power, life
expectancy, literacy and health‖

The HDI is calculated for individual countries with a value between 0 and 1 and is
―interpreted…as the ultimate development that has been attained by that nation‖ (Currently, the
2011 Human Development Report also includes the Inequality-adjusted Human Development
Index which accounts for exactly the same things that the HDI considers however the IHDI has
all three dimensions (long and healthy life, knowledge and a decent standard of living) adjusted
for inequalities in the distribution of each dimension across the population.

Gender-related development index

The Gender-related Development Index is defined as a ―distribution-sensitive measure that

accounts for the human development impact of existing gender gaps in the three components of
the HDI‖ In this way, the GDI accounts for shortcomings in the HDI in terms of gender, because
it reevaluate‘s a country‘s score in the three areas of the HDI based on perceived gender gaps,
and penalizes the score of the country if, indeed, large gender disparities in those areas exist.
This index is used in unison with the HDI and therefore also captures the elements of capabilities
that the HDI holds. In addition it considers women‘s capabilities which has been a focus in much
of Sen‘s and Nussbaum‘s work (to list a few: Nussbaum, 2004a; Nussbaum, 2004b; Sen, 2001;
Sen, 1990.)

Gender empowerment measure

The Gender Empowerment Measure (GEM) is considerably more specialized than the GDI. The
GEM focuses particularly on the relative empowerment of women in a given country. The
empowerment of women is measured by evaluating women‘s employment in high-ranking
economic positions, seats in parliament, and share of household income. Notably this
measurement captures more of Nussbaum‘s 10 Central Capabilities, such as, Senses, Imagination
and Thought; Affiliation; and Control Over Ones Environment.

Gender inequality index

In the 2010 Human Development Report the Gender Inequality Index was introduced in order to
correct shortcomings of the GDI and the GEM. This new experimental composite measurement
uses three dimensions: reproductive health, empowerment, and labor force participation. When
constructing the index the following criteria were key: conceptual relevance to definitions of
human development and theory; Non-ambiguity so that the index is easily interpreted; Reliability
of data that is standardized and collected/processed by a trustworthy organization; No
redundancy found in other indicators; and lastly Power of discrimination, where distribution is
well distinguished among countries and there is no ―bunching‖ among top and bottom
countries This index also captures some of Nussbaum‘s 10 Central Capabilities (Senses,
Imagination and Thought; Affiliation; and Control Over Ones Environment).
“The lesson content has been compiled from various sources in public domain including but not limited to the
internet for the convenience of the users. The university has no proprietary right on the same.”

Rai Technology University Campus

Dhodballapur Nelmangala Road, SH -74, Off Highway 207, Dhodballapur Taluk, Bangalore - 561204
E-mail: info@raitechuniversity.in | Web: www.raitechuniversity.in