The Secrecy Surrounding High-Potential Programs

A recent study finds many companies reluctant to share information about high-potential selection and leadership development programs with employees. HR leaders should jump at the chance to help set criteria for these programs and communicate development opportunities to the workforce, experts say.  

Friday, November 30, 2012
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While employers have taken significant steps toward making most HR practices and processes transparent, a recent survey suggests many companies are still slow to share criteria for high-potential selection and leadership development programs with employees.

The study, conducted by AMA Enterprise, the New York-based division of the American Management Association, found just 18 percent of 289 executives, employees and senior-level managers describing their organizations as being "very" transparent with respect to high-potential selection criteria, with only 15  percent saying the same regarding admission to their companies' leadership programs.

These figures contrasted with the survey's other findings, which saw respondents saying their organizations were "very" transparent about HR processes such as employee survey findings (41 percent), corporate strategy (35 percent) and performance reviews (33 percent).

So, why the shroud of secrecy around leadership development programs and high-potential selection standards?

Experts identify two potential factors at work.

"One is a lack of courage; a fear of the fallout [from making selection criteria and development opportunities known throughout the organization]," says Kim Ruyles, president of Coral Gables, Fla.-based talent management and organization-development firm Inventive Talent Consulting. "I've actually had a client tell me his company maintained a 'public' list of high-potentials, and another list with the real high-potentials."

Some organizations indeed worry that sharing too much information about talent-development opportunities may foster a perception among employees that the selection process for such programs is "political and capricious," according to Sandi Edwards, senior vice president with AMA Enterprise. She cites additional AMA research which finds as many as 25 percent of employees saying they consider talent-development programs to be less than equitable, a view that Edwards says could undercut the programs' success.

"When employees don't understand how to play the game, when they don't know how to be selected to be an 'all-star,' they make their own rules. They make up their own reasons why one employee is in the program and another is not. If part of your employee population isn't sure how these programs are designed or how people are selected, that's going to have a negative impact."

Another concern for companies is the difficulty in managing the expectations of those selected for leadership development programs, she adds.

"I think there's a fear that employees will feel being told they are high-value contributors that are going to get these opportunities automatically means they are going to get promoted," says Edwards. "But you can't guarantee anything. So there's a fear that, if promotions aren't available, [high-potentials] will be demotivated."

Promotions, however, aren't the only way to grow and develop employees, she says; noting the need to outline additional advancement paths available to those selected for leadership programs as well as high-value employees not interested in leadership programs.

"How do you encourage people -- including the high-value contributors not involved in high-potential programs -- to be as vested as possible? If everyone feels they have a path of some sort, and that path contributes to the future and growth of the company, then you have balance in your organization, and employees are engaged."

HR should seize the chance to provide career support and help identify these career tracks for their best and brightest, continues Edwards.

HR leaders "should be jumping up and down for joy about the chance to work with business units to identify the talented people the organization needs not just now, but in the future," she says. "HR has a significant role in setting the criteria for [leadership development] programs and communicating them to employees, as well as coming up with exciting and interesting coaching and mentoring opportunities."

The organizations that excel at leadership development are "masters at differentiating talent," adds Ruyles. That process requires collaboration between HR leaders and line managers, he says.

"Talent reviews and conversations about performance and immediate development are the primary job of [a high-potential employee's] immediate boss. Facilitating talent reviews, as well as providing the support, the infrastructure, laying out the long-term career path -- that's where HR comes in.

"Every organization has a need for somewhere between 70 percent and 90 percent of its workforce to be solid core employees. Some may be in lower-level management, for instance. You also have leadership roles that are generalists. And you also have expert specialists that are really responsible for driving some sort of expertise or knowledge -- a chief research scientist, for example," he says.

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"The tracks for top-talent generalists and specialists are very unique. Those talents are developed differently. Let employees know how these careers are developed if they want to ascend to senior leadership and strategic positions."

HR should also be charged with determining how and why these distinctions are made, and explaining as much to employees, says Edwards.

"Communication within the organization needs to be very clear. Make the rationale clear to everyone. If we have leadership [programs] for certain people, there needs to be clarity on what other workers are going to receive in the way of development opportunities.

"For those that aspire to management positions, for example, they need to know what the criteria are - you may need a certain performance appraisal score, for instance. Or there needs to be visible signs of contributions to the organization. There are all kinds of criteria, but most companies will use some form of performance appraisal and management observation. Recommendations of senior managers are usually going to carry a lot of weight."

Ultimately, HR professionals should "help architect a process for defining what a high-potential employee knows and does," and make the criteria -- whatever they may be -- "explicit, transparent and useful" for employees and managers alike, says Dave Ulrich, professor at the Ross School of Business at the University of Michigan and a partner at the RBL Group, a Provo, Utah-based consulting firm.

"To get high performance, companies have to first define what they are trying to accomplish -- strategy, mission, goals or objectives -- then they have to define specific measures that turn this strategy into trackable standards," says Ulrich.

"There also has to be financial and/or non-financial consequences tied to meeting those standards. Finally, there has to be open feedback with employees about how they're doing. If these four steps - strategy, metrics, consequences, feedback -- are not transparent and followed, employees will not know what is expected of them."




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