Potential can be defined as a latent but

unrealised ability.

Many companies, which carry out

performance appraisal, also keep records
on the
potential of their employees for future
promotion opportunities. The task of
identifying
potential for promotion cannot be easy for
the appraising manager, since competence
of a member of staff to perform well in the
current job is not an automatic indicator of
potential for promotion.

There are many people who have

the desire and potential to advance
through the job they are in, wanting the
opportunity to operate at a higher level
of competence in the same type of
work. The potential is the one that the
appraiser should be able to identify and
develop because of the knowledge of
the job.

This requires an in-depth study of:

the positions which may become vacant, looking
carefully at the specific skills that the new position may
demand and
also taking into consideration the more subjective areas
like qualities required.
These may be areas where the employee has not had
a real opportunity to - demonstrate the potential ability
and there may be areas with which you, as the appraisers
are not familiar.
There are few indicators of potential which may be
considered.

1.

A sense of reality: This is the extent to which a person thinks and acts
objectively, resisting purely emotional pressures but pursuing realistic projects
with enthusiasm.

2.

3.

Imagination: The ability to let the mind range over a wide variety of

possible
causes of action, going beyond conventional approaches to situations and not
being confined to This is the way it is always being done!

Power of analysis: The capacity to break down, reformulate or

transform a
complicated situation into manageable terms.

4.

Breadth of vision: The ability to examine a problem in the context of a

much
broader framework of reference; being able to detect, within a specific
situation, relationships with those aspects which could be affecting the situation.

5.

Persuasiveness: The ability to sell ideas to other people and gain a

continuing
commitment, particularly when the individual is using personal influence rather
than management authority.

In Indian org, it is a normal practice to

promote people on the basis of their past
performance.
Most of the org. are hierarchical in nature,
where the functions & resp. depend upon the
level at which the role is located in the
organizational hierarchy.

When the nature of roles,

resp. and functions differ
substantially, promotions only
on the basis of past
performance are likely to
create problems.

The objective of Potential

Appraisal is to identify the
potential of a given employee
to occupy higher positions in
the organizational hierarchy and
undertake higher
responsibilities.

A good potential appraisal system

attempts to:
generate data about employees and their
potential for occupying higher positions
from a variety of sources, and
helps the top mngt. to make decisions
about the suitable persons for a given job
also helps the mngt. in identifying
employees whose capabilities can be
developed through job rotation, training,
etc.
Thus, potential appraisal is
linked with career development.

1.
2.

Role Descriptions
Qualities required to perform the
roles:
technical knowledge and skills
managerial capabilities and
qualities
behavioural dimensions.

3. Indicator of Qualities

Rating by Others If the

employee being appraised has
performed functions in the past
that had required similar qualities,
an assessment of his performance
of these functions can be a good
indicator.

Psychological Tests
Most of the managerial and
behavioural dimensions can be
measured through these tests.
Simulation Games & Exercises
Assessment centre approach
Performance Appraisal Records

4. Organising the System

To what extent is the org. willing to go
by merit rather than seniority in
promotions?
What is the relative weightage to be
given to the technical, managerial and
behavioral qualities and, within each of
these categories, to different qualities?

What are the mechanisms of

assessing the individual on different
indicators of his potential and with
what reliability?
(If worked with a no. of higher
officers, formal interview, etc.) After
obtaining the ratings, deciding the
relative weightages to be given to the
assessment by diff. officers.

5. Feedback on potential appraisal for career

development
If the organization believes in the development and
multiplication of human resources, it should attempt to
generate a climate of openness.
A good potential appraisal system shld. provide an
opportunity for every employee to know the results of this
assessment.
A good Potential Appraisal System continuously provides
opportunities for the employee to know his strengths and
weaknesses. These are done through periodic coaching and
guidance by either the personnel department or the
managers concerned.

6. Introducing Potential Appraisal

Most co.s do not have any systematic
way of appraising the potential of their
employees. Even though a co. encourages
internal talent.
A formalised policy, plus making clear
the organizational beliefs and orientation,
would build up the morale of the employees.

1.
2.
3.
4.
5.

The potential appraisal system will

have to be linked with the subsystems of HRD:
Feedback & Counselling
Training
Job rotation
Data storage
Manpower planning

Feedback & Counselling

Feedback should be given through
counselling sessions.
It should aim at helping the individual
to discover his strengths and
weaknesses so that he would develop
career ambitions that suit his potential.

Training
Appraisal systems should also provide
training opportunities for developing the
individual.
Regarding potential appraisal, wherever a
sizeable no. of employees have been found to
lack certain common qualities, the training
dept. may attempt to organize in-company
programmes to develop them.

Job Rotation
In cases where the employees
have been found to possess certain
qualities, but do not have the
opportunity to develop them, they
may be put into jobs that would
help this development.
Job rotations can be planned on
the basis of potential appraisal.

Data Storage
Good maintenance of data will help
in managing the human resources
systematically.
The data generated by the potential
appraisal system should be stored in
the individual files.

Manpower Planning
In orgs that are expanding or that
have a higher turnover, potential
appraisal records help greatly in
manpower planning when the
organization requires more people to
meet the expansion or other needs.

Continuous self and staff development are

essential to continuous performance
improvement. Ones own self-development
needs to be related to personal strengths and
weaknesses and to the career aspirations.
This requires planning of career progression
and setting career goals. This can be
achieved by identifying potentialities of
employees with the help of potential
appraisal and various methods involved in it
viz. assessment centre.