Performance Vs Potential

I have had some serious discussions with my team members and my seniors on the topic of Performance Vs Potential.

In short, the agreed definition of "Potential" is the capability of the individual, something to do with future, for example: "This person has the potential to be a Manager in 5 years". "Performance" is something more "real", an evaluation of the past, what an individual has achieved in the past.

Candidates are hired based on the potential because the performance cannot be judged in a few minutes or hours, but then this is where the importance of "potential" ends. When the candidate assumes the role of an employee, then it is "performance" all the way, little weightage is given to "potential".

Employees are appraised to evaluate their performance for the past months, to evaluate the plan and the achievements against those plans, and then rate the employee whether he/she was below expectations, met expectations or exceeded expectations. A feedback is provided and areas of improvement are identified, targets are discussed and the employees' feedback is received on the team and the organization.

One of the most expected outcomes of an appraisal is the "raise". Gone are the days when people used to take the feedback constructively and try and get better in what they do, enhance and align their skills to the company's objectives. It is unfortunate that the appraisal meetings are now reduced to a marketing gimmick, where the appraisee is trying to present a "larger than life" picture of his/her achievements and the appraiser is trying to the punch holes in this picture, telling the appraisee that he/she is not as good as he/she thinks - sad, but true.

Professionals must think objectively on the "performance" and not on the "potential" because it is the performance that helps build a career.

Managers must also be more objective while appraising their team members. Today, the managers are governed by trying to fit the performance of the team members to the "Bell Curve". A quota for the number of people in the team that can get an "outstanding", numbers who can get an "exceeds expectations", number who can be assigned a "meets expectations" and finally the number who can be assigned "below expectations". The Manager's point out the personality issues rather than focus on the performance of the individual. Managers must identify the potential in the team members are try and maneuver their careers thru' a discussion and by counseling. The Manager's responsibility is to help build careers.