Pinpointing Performance Potential: A conversation with Maria Rotundo
Maria Rotundo, associate professor of organizational behaviour and human resources management at the University of Toronto’s Rotman School of Management, recently served as moderator for the latest Excellence Canada roundtable consisting of some of Canada’s top-ranking executives. In this edited transcript of her recent conversation with the Financial Post‘s Dan Ovsey, Ms. Rotundo talks about some of the roundtable’s key topics, including the difference between high potentials and high performers and how business leaders can avoid or overcome “performance punishment”.
Q:What is the difference between high performers and high potentials?
A: High performers are individuals who are important contributors. They consistently perform at high levels and are effective performers. They’re capable to move into positions that are either lateral to the positions they’re in now or take broader roles and move up. But they’re also individuals who are comfortable staying in the position they’re in at that time. So, I think high performers, you can rely on them, they’re consistent and they achieve high levels. They may move up a notch or stay in the same position or level, but you can rely on them for consistent performance.
High potentials are those who have the potential to move beyond what they’re doing now. They are people who are specifically looking at moving up and with them it’s about assessing areas of strengths and weakness with the intent of moving into higher positions. When we’re thinking of the high potential, we’re thinking of continued growth.
Q: Why is it important for leaders to distinguish between these two groups?
A: I think there’s a few reasons. I think in terms of distinguishing between them the idea is that we shouldn’t under-appreciate that somebody may be a high performer but may not aspire to be a high potential. They may be good at what they do; they may acquire more skills but they’re content where they are. They’re capable at achieving effectiveness and high levels of performance. So, we should under-value these individuals even if they don’t aspire to growth.
Q: But we often hear from human resources practitioners that managers should be wary of individuals who are complacent. How do you reconcile this counsel with your comments about high performers?
A: The issue there is around the level and what additional skill sets you are drawing upon and a lot of that is based on whether you take on additional leadership or managerial responsibilities. There are certain jobs that require more of those types of responsibilities and whether people want to move in that direction versus staying in a direction where you maybe don’t have those responsibilities but what you’re doing may change and you’re capable of doing different jobs or tasks and performing them quite effectively. The reality is you’re not going to stay in the same job for your entire careers. We always encourage people to achieve their best, whatever that is, but that may differ between different individuals. But not everybody aspires to be the CEO.
Q: Don’t managers run the risk of lumping employees into groups and classifications, which could lead to trouble down the road?
A: I think the issue there is if you create a culture of elitism around these high potentials, then it’s that you don’t recognize or value those individuals who are high performers. It’s important to continue recognizing them. They’re drawing on skills that are well developed and you want to value both groups.
Q: How do you identify high potentials and high performers?
A: When you have regular and frequent communication with your group about performances and objectives and how they’re doing in terms of achieving those objectives, you gather information about those individuals, such as: what are their objectives moving forward? How are they doing in achieving those goals? What do they believe their potential is and what do we see their potential to be? It’s an ongoing, interactive process that’s used to assess both angles and through which both parties are constantly evaluating the potential.
In conjunction with that is assessing employees. If you see them as having potential, you identify strengths and weaknesses and continue to develop them. You provide them with new job opportunities or exercises that push them a little to see if they’re capable. You can provide them with coaching, mentoring and training programs. I prefer to view it as ongoing as opposed to a one-time, all or nothing approach where both parties are constantly re-evaluating.
Q: Where do things like employee incentives come in? What’s going to get the high potentials to go the extra mile?
A: I think it’s important to distinguish between monetary an non-monetary incentives. At the early stage of your career, it’s really important to have a lot of opportunity for training and development because you need that to pursue growth opportunities. Don’t underestimate when organizations do offer these incentives that they’re useful, because down the road they could translate into monetary benefits.
A lot of times organizations use monetary bonuses. Bonuses tend to play a greater role now because the pool of money you can obtain from a bonus is larger than a merit-type increase. But each year you have to aspire to achieve that bonus again. It doesn’t just get added on to you salary.
Q: How do you know whether your high potentials and high performers are going to be attracted to the incentives that you offer?
A: There are a lot of benefits that do have monetary value, even if it’s indirect. We have to be careful though because how do you put a price on something like health and wellness, for example. If an employee is eating well and is in a healthy environment, that’s important to him or her and if you really wanted to, you probably could find a formula that does add a monetary value to that.
It’s about finding the right package of monetary and non-monetary incentives and benefits that create the culture and environment that allows people to flourish and reach their potential. We often talk about some of the obvious companies like Google and Cirque du Soleil. If you look at the workplace and the whole package they provide to their employees, it’s a lot more money.
Q: How do employers find a way to provide a benefits package or incentive package to employees that is going to be received equally as well by today’s multi-generational workforce?
A: I think we shouldn’t ignore the importance of really getting to know each employee and what’s really important to them and what they perceive to be of benefit. You don’t need 100 different formulas, but we have to be careful about finding a universal formula.
I think its important to be open to the world of possibilities. You can put a lot of benefits in place that don’t cost the company a lot of money. For example, if you want to increase social interaction, you can have sports leagues or recreational groups, common-interest groups that meet, etc. It doesn’t cost a lot for companies to have these but it gets people to get to know one another. That may be a benefit that’s intangible, but there’s networking that happens within the group and mentoring.
Q: I’m curious how the roundtable reacted to some of these ideas. Many senior executives raise an eyebrow when it comes to investing in less tangible practices that don’t have an easily measurable ROI.
A: We didn’t really approach that topic specifically in the roundtable, but the topic of organizational culture did come up. Some of the practices they have in place are experienced or realized as a culture, and I think that most top leaders will talk in the language of organizational culture and if you think about what we just discussed, it’s really around what’s the culture at work? What type of environment will bring out the most effective and efficient employees? What assumptions do leaders hold about what role work plays in employees’ lives? Some of those basic assumptions they hold about employees will shape the work environment and the culture.
Q: One of the things that did get discussed is performance punishment – the concept of giving unsustainable levels of work to top performers who are constantly picking up the slack of less productive co-workers. This is a common problem in the workplace. What solutions did the roundtable leaders contemplate to combat this issue?
A: If you think of a manager who has really high performers but individuals who could also possibly be high potentials, they perform well and seem to be interested in moving up but some managers feel like, ‘I don’t want to lose them because they’re doing well,’ and that’s where you get into a little of the performance punishment. You’re ultimately denying them the chance to move up and we know that people are more likely to leave an organization because of their boss than to leave because of the organization.
Q: But how do you get around that? Isn’t our corporate culture too polite to tackle these issues head on? Is it realistic that managers are going to directly confront or reprimand employees who aren’t pulling their weight?
A: What may be easier said than done is establishing a culture in the workplace where there’s open and ongoing communication about performance. People need to feel comfortable about receiving feedback – positive and negative – frequently. If you focus on the traits, rather than the person, then it’s more manageable and easier to hear. It’s difficult to have those conversations and often when they’re had, people explode because there’s all this pent up frustration and these ongoing issues left unaddressed for a long time.
Q: Gen Y has often been accused of having difficulty getting negative feedback because it has been brought up with the idea that punitive measures are considered unhelpful and sometimes even unacceptable. How do you suggest managers reconcile offering negative feedback to a generation not accustomed to receiving it.?
A: I think it’s important to qualify that. Generation Y is used to getting feedback all their lives. They’ve been going to camp since the age of three and had high expectations to get into this school and that program and had to be part of such and such club or committee. They’ve had to achieve and reach milestones because their parents have been doting on them to become these amazing people. So, I think they’re a little more receptive to feedback. I know as a professor that students expect a lot more feedback. I think constructive feedback is how I would frame it. I think Gen Y folks will get it if it’s framed around how they can improve. If it’s framed around their development and improvement, then that’s the way to go.
The only other piece is going back to Baby Boomers. I think in the workplace, that was a generation where no news was good news.You would get your performance review once a year and if your boss doesn’t say anything, well, good for you. They’re the generation that isn’t used to receiving feedback because if anyone says anything, that’s bad news.