It’s that season where we start gathering all of our accomplishments for the year in preparation for the annual performance appraisal event. We will all bring much in the way of evidence to support our performance, but will you have any evidence to support your potential? Will your employees?

A common challenge in performance management is emphasizing performance and leaving potential to the wayside, chalking it up as a derivative of performance. Often, performance is a quantitative result, while potential relies on assumptions and has no transparency regarding its conclusion. Let’s explore this issue in three areas: the philosophical basis of potential and performance, the fallacy of statistics, and the commercial viability of the 9-box.

The Philosophical Basis of Potential and Performance

We need to return to Aristotle to understand the relationship between potential and performance fully. Aristotle defined performance as actualization, suggesting that the connection between potential and actualization is a zero-sum system. Let’s say we are born with 100 units (whatever they may be) of potential and zero units of actualization, as we haven’t done anything (lazy babies!). The minute we fulfill one unit of actualization, we now have 99 units of potential, and so on. For us to live a fulfilled life, we must realize all of our original potential. The same can be said at a micro level when it comes to our careers. If we are to enjoy a fulfilling career, we must realize our full professional potential.

The 9-Box

The 9-box, a three-by-three matrix, measures the intersection of performance and potential:

9-box

When engaging in a 9-box calibration, leaders gather these scores for all staff and plot them on one matrix, usually under the shroud of secrecy. In this way, the 9-box is a line that moves from left to right as the employee continues to actualize (perform). So, do we change the representation of the 9-box to a linear view, or do we change the definition of potential so that it is not a direct derivative but only possesses a relationship to performance? Let’s take a look at the latter for now.

The Theory of Reasoned Action

In layman’s terms, potential is the ability to predict future behavior. For some scientific help to guide us in thinking about the problem, let’s use the theory of reasoned action (TRA), which suggests the following that our pre-existing attitudes and behavioral intentions will provide a predictive model as to how we will behave in the future (i.e., potential). The key, then, is to have a different discussion – one that addresses potential in the future. This proposed discussion also suggests that we have yet another assessment tool outside of the performance tool: one based on the TRA.

For example, in a traditional performance assessment, we are given a competency definition and asked to provide a self-reported rating of our accomplishment (e.g., “Employee is widely viewed as a team player and collaborative”). In the proposed assessment for potential, the statement might appear as, “Being a team player who is collaborative is…” (Circle one number on a scale from 1 to 7, with 1 being “good” and 7 being “bad.”) This approach provides an encapsulation of an employee’s attitude toward an outcome.

The Fallacy of Statistics

Correlation does not imply causation, yet we often suggest that it does. As much as correlation is misunderstood, and misused, there is another aspect of correlation that is not well known, and it is key to this discussion: multicollinearity. Multicollinearity is a test that you perform after the correlation test, partly to ensure that you are not measuring a derivative of the dimension you’re looking at.

Most people measure performance and potential in the same way, but if you ran a multicollinearity test, it would come back positive, meaning that potential is a derivative of performance – in essence, they measure the same construct. The bottom line here is that both performance and potential are based on the same data; thus, we need to find another way to connect potential to performance.

Commercial Viability

There is a commercially viable reason to continue the 9-box practice. It is a staple of the unified talent management (UTM) system. We have all been conditioned to accept the 9-box as essential in the UTM space; however, that does not mean that we need to adhere to older practices. We have the opportunity to change the way we deploy the 9-box. We can use a new assessment along with our current assessment.

There is still time to think about how you can develop the people who are under your management. See the potential outside of their performance, and you might be surprised.

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