Every organization uses at least two key criteria in a Talent Review: performance and potential.
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Performance
Performance is what you see in how an employee has acted and delivered over time. When assessing performance, it’s important to consider both the results achieved and the behaviours that led to those results.
💡 Golden tip:
Treat behaviour as equally important as results when evaluating performance. A manager might achieve great results, but if turnover rises, conflicts emerge or development stalls, the organization pays a price. Set clear expectations: which results matter, which behaviours you value, and how to balance the those two in an employee’s performance evaluation.
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Potential
Potential is about looking ahead: to what extent can someone take on more complex tasks and broader responsibilities in the future?
Estimating potential is much harder than assessing observable performance. Research shows that three factors combined strongly predicts future potential:
- Cognitive ability (IQ): Can a person process complex information and solve complex problems?
- Conscientiousness (Goal orientation / Reliability – Big Five): Is a person diligent, persistent, and focused on completing a task?
- Learning agility: Can the person learn by applying insights from past experiences to new situations?
When these three factors are reliably measured using an assessment tool, they provide roughly 50% predictive validity for someone’s potential.
This allows you to provide stronger, evidence-based feedback and have a more objective discussion about an employee’s future growth.
Many organizations add extra talent criteria such as turnover risk, change readiness, or innovative thinking. These additional dimensions should align with the specific objectives of the Talent Review.
For example, if one of your goals is to improve retention of top performers, then assessing attrition risk becomes relevant.
Conclusion
Most organizations base their Talent Review on two main criteria: performance and potential. Performance is easier to assess because it focuses on observable behaviour and achieved results.Potential, on the other hand, is harder to predict, but research consistently highlights three reliable indicators: cognitive ability, conscientiousness, and learning agility.
Use an assessment tool that measures at least these three factors to make your evaluation of potential more grounded and objective.
Would you like to train managers to interpret what “performance” and “potential” truly mean in your organization?
Please feel free to contact us so that we can discuss together what support we will offer managers to gain a better shared understanding of the talent criteria.
Frequently Asked Questions
- Which talent criteria should I use for the Talent Review in my organization?
Start from the main objective of your Talent Review to decide which criteria to apply.
For example:
- If your goal is to prepare successors for new roles, focus on potential.
- If you want to strengthen retention among recently hired employees, assess attrition risk.
- If your goal is to develop stronger leadership, include specific leadership behaviours in your criteria.
- How can I ensure managers interpret the Talent Review criteria consistently?
- Co-create clear definitions together with a few managers, starting from a scientifically sound framework.
- Provide managers with a practical tool, for example a short questionnaire, to clarify what ‘performance’ and ‘potential’ mean in your organization.
- Facilitate workshops where managers practice interpreting the criterion using real-life examples.
- Facilitate a Talent Review meeting where managers share their reasoning and discuss how they assess each employee against the criteria.
- How can organizations measure potential?
There are several tools to assess potential, for example:
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- Through a questionnaire (including a cognitive ability test) completed by the employee, their manager, and peers.
- Through a development center focused on the next leadership level or a significantly more complex role.
