Want to Close the Gender Gap? Start With Ratings of Potential

I probably do not need to pepper you with the numbers: There is still a daunting gender imbalance in the upper echelons of organizations. Globally, only 24 percent of senior management positions are held by women, and 33 percent of companies still have no women in senior management (Catalyst, 2017). Aside from being a fairness problem, this is also a talent management problem: By not promoting the best women, organizations are systematically saying no to higher performance.

The gender gap is a multifaceted problem with several causes, but one culprit really hits at the heart of talent management: Ratings of future potential. Every organization that makes promotions needs to somehow determine who is most likely to be successful in a more senior role – and unfortunately, as I have stated previously on this blog, this seems to be where gender bias hits. The research evidence is amassing.

Roth et al. (2012) in their meta-analysis found that, despite the fact that women received higher performance ratings, men were consistently rated higher on promotion potential. Perhaps even more strikingly, another meta-study by Joshi et al. (2015) showed that the gender difference in both promotion and benefits was 14 times (!) larger than the gender gap in performance ratings. Lyness and Heilman (2006) on their part showed that higher performance ratings were required of women than of men in order to get a promotion, indicating that women are held to a different standard.

According to new research, the pattern also holds for the flipside of potential: risk for derailment. That is; the probability that an individual will not be able to perform once promoted to a more senior role. Bono et al. (2017) performed an impressive study looking at two massive datasets, made up of tens of thousands of feedback scores for managers. The managers’ social skills had been rated either by their boss or in a 360 fashion. The boss had also rated the person’s derailment risk. To no surprise, there was a clear correlation between low social skills and high ratings of derailment risk. However, women who displayed problematic social behaviors were 17 percent more likely to be seen as potential derailers than male managers displaying the same problems. The pattern was also confirmed in two experiments.  This, according to the authors, indicates that female managers – held to the stereotypical standard of women being “nice” – are judged more harshly when assessed for future promotions.

In one way, the above findings are sadly not too surprising, since assessments of both potential and derailment risk qualify as what research calls “ambiguous evaluations” (e.g. Heilman, 2001): The concepts are fuzzy, actual data are scarce, and you are trying to predict something that has not yet happened. And what do humans do when we lack data and structure? We draw on our preconceptions. This opens up for bias and stereotyping to creep in.

In sum, there is now convincing evidence that women are at disadvantage when future potential is assessed, and that this contributes significantly to the gender gap in senior management. By all means, this is a momentous issue for talent management in the years to come. What is to be done? In the next post, I will go into some of the measures that can be taken to counter this dreary phenomenon.

 

Picture: Pixabay.com

A Deep-Dive Conversation on Talent Management

Earlier this winter, I was invited to do a filmed conversation on the state of talent management, hosted by HR consultancy firm Assessio‘s fenomenal general manager Christian Walén. The video is part of the new series Assessio Insights, which focuses on research- and data-driven approaches to people management and HRM.

Sitting down with Christian Walén, himself a brilliant psychologist and thought leader in the field of I/O psychology, to discuss my favorite topic was a lot of fun. For those of you who speak Swedish, you can find the whole conversation here. For English-speaking readers, you will find a translated, somewhat edited, excerpt below.

The State of Talent Management and the Talent Concept

Christian Walén (CW): Kajsa, I think we can agree that few concepts within strategic HRM have been so much in focus in recent years as talent management. What’s the state of talent management today?

Kajsa Asplund (KA): I would say that most companies have realized the importance of the issues, and most have also implemented a number of talent management practices, such as an annual talent review. Maybe, however, we are starting to see an increased questioning some of the basic assumptions of the “war for talent” perspective.

CW: So the hype is over? We’re approaching a new phase for talent management?

KA: I think so. We’re approaching a somewhat more mature stage, I would say.

CW: Very interesting. When talking about talent management it’s very easy to just toss the concept around. But if I understand your research correctly, there’s rather a number of different approaches and talent philosophies out there in different types of organizations?

KA: Yes. Pretty early on, we noticed that companies approach these issues in quite diverse ways. There is, of course, some kind of consensus on the notion that talent management entails the chain of attracting, identifying, developing, and retaining talented people. But the definitions of talent differ substantially between organizations, and seem to be very much related to organizational culture.

CW: You have shown that in some organizations, the view is that everyone is a talent, and should be granted the right conditions and the right leadership in order to grow. Whereas in other organizations, there is a more competitive perspective saying that only a few should really be invested in. Is that the most common dividing line, or are there others?

KA: I would say that is probably the most fundamental dimension – how common is talent? And a related issue is of course; can talent be cultivated, or is it rather fixed to begin with? An additional dimension where companies differ quite a lot is the relative focus that they put on hard-numbers performance, relative to what you could call input variables: Motivation, ambition, drive, etc. Basically, what people call potential.

Performance vs. Potential

CW: Speaking of potential – does performance at one level automatically lead to performance at the next one?

KA: Definitely not. A pretty large proportion of those that are promoted run into problems. Of course, if you haven’t performed at the lower level it is pretty unlikely that you will succeed at the next one, but that should rather be viewed as a hygiene factor. There are a number of additional factors that could cause you trouble once promoted. For instance, the new work is often of a completely different nature – the classical example being the move from an operational to a strategic role.

CW: Or going from a specialist role to managerial responsibilities.

KA: Definitely. In addition, the weaknesses that you may have been able to live with at lower levels tend to become more visible the more complex the role.

CW: What’s really interesting about what you’re describing is that even though we have come quite far in terms of structures and processes, we now need a larger focus on the individual – to analyze and support his or her growth even more. Is that in line with your findings?

KA: Absolutely. I think many companies have hit one or another fork in the road by implementing the standard version of talent management, and then realized that we need to look more at what research is saying – what we know about how people actually grow and develop, what constitutes high potential, and so on.

Developing Talents and the Risk of Talents Leaving

CW: My impression is that a lot of talent management happens at very junior levels. Then it fades out further up. Is that in line with your findings?

KA: Absolutely. Over the last decade, companies have become increasingly focused on their employer brands. Related to this, they have invested heavily in finding these young high-performers to be put in junior talent programs, which are supposed to work as catapults towards higher positions. But when it comes to building the complex competencies that will be necessary in order to take on more senior roles, investments have not been as large.

CW: So what does talent development usually look like in practice?

KA: The most common version is to put these individuals in either a talent program or a passive talent pool, which basically equals a list of people that should be considered first when new career opportunities open up.

CW: So it’s the VIP lane kind of idea?

KA: Yes. The problem is, when talent programs finish, that usually becomes a pretty abrupt interruption for the talent. And there you really have a critical turning point.

CW: What happens with these individuals at that moment?

KA: Well, in research we talk a lot about the psychological contract, which is basically the employee’s perception of what am I supposed to do and what can I expect in return from the organization. What happens after a talent nomination is that the organization has effectively re-negotiated the psychological contract. Quite simply, the employee now has higher expectations on what he or she will get in return from the organization. You have gotten this talent label and were granted access to a prestigious talent program. If then nothing happens within perhaps a year upon program completion, there is a big risk that you decide to leave.

CW: Is that what you’re seeing? That these high-achievers have a higher propensity to leave if there are not enough development opportunities?

KA: Absolutely. And then we’re back to: Identifying and developing junior talent – yes, quite a lot is being done there. But the question is; what is going to happen then? What is the journey supposed to look like after the first two years?

Criticisms and New Developments in Talent Management

CW: This is super interesting. What you’re doing here is to pinpoint a somewhat more sober and critical view on talent, which seems really wise. What other critique is being directed towards talent management and the way we work with these issues?

KA: One is the very basic question of whether we should at all use the term “talent”. I see increasingly more actors questioning this, because the word talent has a number of connotations. First of all, it is associated with fixed characteristics, which could lead appointed talents to start seeing themselves as crown princes or crown princesses that can passively expect rewards from the organization.

CW: You often refer to some very interesting studies showing that when real star performers switch jobs, they don’t necessarily keep on performing. What kind of fallacy does this reflect?

KA: It’s the fallacy of thinking that talent is completely independent of context. This emanates from the very individualistic American view on talent management. Now we are beginning to understand that there really is a very intricate interaction going on between the individual, the team, and the organization, where the fit might be better or worse. You may perform better together with a certain type of colleagues, within a certain type of culture, and so on. In short, a more nuanced picture is emerging.

CW: This really underlines the importance of working with teams and culture as part of your talent management.

KA: Absolutely. So far, talent management has been extremely focused on individuals – not necessarily in the sense of really understanding how individual engagement works, but in the sense that organizations have been focusing on finding certain individuals to lift up and put in new positions. Now, there is an increasing appreciation of the importance of integrating this with work on teams and culture.

Think Potential, Think Male?

Already when we set out on our exploration of the concept of potential, I mentioned that danger lurks in ill-defined concepts. The reason is simply the way humans work: give us a fluffy term, and we will fill it with our own interpretations, experiences, and values. Further, it is seldom coincidental what particular interpretations and values that go into those concepts. The usual suspect is ingroup favoritism, i.e., that we tend to like (and judge more favorably) those that are a lot like ourselves.

Potential, no doubt, often represents a fluffy term. As mentioned previously, organizations seldom employ a solid definition of what they mean by “high potential”. There has been relatively little direct research on how this affects diversity and inclusion in e.g. talent pools and companies’ leadership pipelines – but drawing on what we know from prior HRM literature, chances are that it opens up for bias and stereotypes influencing the decisions. The studies that do exist certainly point in a worrisome direction, particularly regarding gender.

Warren (2009) conducted a study of talent management documents and systems, and found that they to a large extent represented male stereotypes of assertiveness and competitiveness. And in a very interesting Swedish doctoral dissertation from 2009, Linghag looked directly at judgments of potential in companies’  internal leadership programs. One of her main findings was that men were viewed as having unlimited potential, and women as having what she called delimited potential: While male participants were perceived as able to take on basically any future management role with the right training, female candidates were viewed as having potential only for specific roles and positions. This, Linghag argued, in the long run amounts to women being held back in their careers compared to their male colleagues.

In other words, there are indications that potential can easily become a gendered term. If we look at research on other HRM practices, such as recruitment and performance management, there is plenty of evidence showing that the less structure and clear definitions are adopted, the more these practices become scenes for bias and stereotypes. Thus, there is good reason to try to counter bias in assessments of potential. Below are some ways of doing this – methods that actually also tend to counter the fallacy we talked about last time; confusing performance for potential.

• Define the concept clearly – and make sure the definition is used. Even when a company has adopted a definition of potential centrally, there is usually little monitoring of whether this definition is actually used in managers’ assessments  (Silzer & Church, 2009). It goes without saying that compliance to the definition is key to counter discrimination.
• … and scrutinize the definition for gendered assumptions. Festing, Kornau, and Schäfer (2015) advised companies to go over their talent frameworks and make sure that the wordings are not reflecting a mental prototype of a male person.
• Make the process as open as possible. van den Brink, Benschop, and Jansen (2010) showed that gender-biased decisions in recruitment were more prominent when the assessment process was not made public within the company. There is no reason why this should not apply to assessments of potential too.
• Increase the use of methods with less adverse impact. We know, not least from research on recruitment and selection, that less structured selection methods tend to have a stronger adverse impact. Instead, consider methods such as personality and GMA tests, structured case exercises, and well-thought out assessment centers.
• Train HRBPs to counter bias in calibrations. In most organizations, the sessions where potential is discussed are facilitated by HR representatives, usually HR business partners. In other words, these are key actors in countering both bias and the muddling of performance and potential. Thus, they should receive training in helping managers distinguish between the present and the future, and between relevant and irrelevant factors.
• Hold managers accountable. According to Henson (2009), one key ingredient in more rigid potential assessments is that managers are given a clear responsibility – ideally, tied to a measure – to “deliver” a diverse enough pool of high-potentials.

As we have seen throughout this series, much of the challenge regarding potential lies in defining the concept and basing judgments on information that actually has a predictive power – rather than on hunches and intuition. By taking on those challenges, companies will be able to make much better use of potential assessments in their strategic talent management.

 

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Why Performance Does Not Equal Potential

Welcome to the third stop on our journey in the cloudy country of Potential. As pointed out in previous posts, this has become a real key concept in HR in general and talent management in particular. With disruptive change being the new constant for organizations, HR has shifted a significant part of its focus from assessing what employees have accomplished in the past, to what they could accomplish in the future.

Or, so it is said. Reality is somewhat less flattering, which is not so strange if we take a step back to look at the concept of potential. In a nutshell, potential denotes something that has yet to realize. This something is, by definition, not observable in the here and now. Instead, you have to use some kind of indicator to assess its probability. In short, you have to make a prediction. Now, if you were a manager charged with assessing the potential of your subordinates, which would be your most readily available indicator of how someone will perform in the future? Probably, their past performance.

This amounts to one of the most common fallacies in talent management. Research has shown that managers, when assessing employees’ future potential, keep sliding back into past performance (Hewitt, 2008; Rogers & Smith, 2007). There are, however, several important reasons for why current or past performance does not equal potential. Here are some of the core ones.

Potential is about doing something new. Anyone who has taken Psychology 101 is familiar with the motto “the best predictor of future behavior is past behavior”. That can very well be true, but only if situations remain relatively constant. When you are assessing potential, you are assessing the person’s ability to take on different tasks and roles than today – usually more complex and demanding ones. Walter Mischel, nowadays more famous for The Marshmallow Test, showed several decades ago that past behavior is a pretty lousy predictor of future behavior if that future involves significantly different situations (Mischel & Shoda, 1995). Of course, past performance is not unrelated to potential, but it is far from sufficient.

Not everyone has equal opportunities to perform. As pointed out in a vast literature, performance is not only about ability and motivation – it is also about opportunity. A person could have immense potential, but be held back by e.g. the wrong manager, a non-supportive environment, or a bad-fitting role. A sharp and fair assessment of potential must be able to take this into account. For instance, if a certain employee has many of the foundational factors for potential in place – such as personality and general mental ability – consider moving that person to another unit, role, or team, that you think would be a better fit (see e.g. Silzer & Church, 2009).

Development needs reveal themselves when the bar goes up. This is a classical case when it comes to the group usually referred to as “junior top talent”. In their first one or two jobs, they often live well off their intelligence, drive, and general social skills. This usually also earns them a reputation as “stars”, that managers are swift to promote. Potential weaknesses, e.g. perfectionism, sensitivity to criticism, or narcissism, are often overlooked because they are not critical at this level. However, things may change once these individuals get into a role that is in some way qualitatively different – for instance, moving into a people leader position, or moving from the operational to the strategic level. This has been identified as one of the main reasons for why so many promotions decisions fail (some estimates say over 50 percent; e.g. Burke, 2006; Hogan & Hogan, 2001).

As the above argument shows, confusing performance for potential is as risky as it is common. This of course begs the question: If not past performance, then what? Next week, we will delve deeper into that question.

 

Photo: https://www.flickr.com/photos/manoftaste-de/

Potential for What?

Welcome back to the series on potential, this enigmatic concept that is nowadays so central to organizations’ talent management. As promised, we will spend today’s post on the logical follow-up question “potential for what?” When we say someone has potential, do we mean to become the next CEO? Or to take a little more responsibility in his or her department?

Let us first state one thing loud and clear: In the broadest sense, of course everyone has some kind of potential. All of us can develop, learn new things, and stretch ourselves to master something we did not master yesterday.

The question is, then, why should it be important for organizations to highlight some people as having “more” potential than others? One answer might be that companies should talk less about high and (particularly) low potential, and more about different kinds of potential. It is certainly useful for organizations to try to forecast who is likely to develop into what, but that also calls for a well thought out answer to the question “potential for what?”. Most organizations that have a mature talent management have realized this, and employ a multifaceted definition of potential.

To begin with, potential can be more or less generic. Decades of research have shown that there are indeed some stable inner characteristics that tend to predispose a person to a very broad range of tasks and roles. The most important ones are general mental ability and some personality factors, such as conscientiousness from the Big Five. Silzer and Church (2009) called them “foundational dimensions” of potential, and argued that it is they that should be at the center when evaluating potential among junior employees. Since the specific roles that will be available ten years down the line are extremely hard to predict, it makes more sense to keep the evaluation of junior’s potential as broad as possible.

As employees progress through their careers, it becomes motivated to narrow the scope. Quite often, however, that tends to translate into a one-eyed focus on vertical climbing. According to a recent report from Corporate Leadership Council, about half of all companies define high potential as the ability to advance one to four levels within the organization. Research is now starting to criticize this “advancement only” conceptualization for being too narrow. The old pyramidal organizational structure is becoming increasingly more rare. With flatter, more team- and project-based organizations, “potential” might just as well entail the ability to take on a wider scope in one’s work, or to bridge different domains. It is far from obvious that a fulfilling career today and in the future necessarily goes upwards (Yost & Chang, 2009). Thus, as pointed out by Henson (2009), organizations should utilize the potential concept to address their various strategic needs. In many organizations, this might take the form of having multiple “potential pools”, for instance:

• Executive potential; entailing those that are judged to have the capacity and motivation to take on a role in the c-suite or just below.
• Management/leadership potential; comprising of employees that are viewed as having the capacity and motivation to take on leadership- and managerial roles.
• Functional potential; for those employees that have spent most of their career deepening their knowledge of a certain domain and are predicted to be able to take on more complex tasks and/or roles within that function.
• Highly valued; for those employees that are deemed to have a good fit with their role in terms of skill level but are viewed as highly motivated to learn and dedicate themselves to the job and organization – and should thus be afforded development opportunities within their specific setting.

These are of course only examples, but provide an illustration of how a more diversified view can often provide a better answer to the question “potential for what”? Junior talent might be best seen as more generic, but further along in people’s careers, a more “high-resolution image” is usually more useful.

As evident from this list, potential entails a motivational aspect as well as a skills-and-ability aspect. We will discuss this aspect more in the next blog post.

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Feeling High-Potential?

Would you say that you have high potential? If so, is that potential general, or related to a specific job role? Would you further say that you have “untapped” potential? How do you know?

My guess is that you find the above questions rather difficult to answer. Potential for what? Potential as in motivation and drive, or as in skills and ability? It might seem odd that such an unclear term plays a central role in organizations, but nowadays it does: Potential is a key concept in talent management and succession planning. The most common way in which organizations define talent today is “high performance combined with high potential”. If you are in the HR business, or if you are a line manager for that matter, you are already well familiar with the matrix often used when identifying talents: One axis consists of performance and the other one of potential, and only employees plotted in the upper-right corner are considered to be talents. But with or without such an explicit rating, the view that organizations and managers hold about different employees’ potential will affect these employees’ career development and working life.

So what is potential, really? In a basic sense, potential refers to “the possibility that individuals can become something more than what they currently are” (Silzer & Church, 2009). It does not equal current performance, but rather implies that a person’s traits, drives, skills, and abilities can be honed in such a way that he or she might take on a different – usually more complex – role in the future. In other words, it is a forward-looking term. When used in organizations, it usually refers to a time horizon of somewhere between three and ten years. However, that is more or less where the clarity ends. Karaevli and Hall (2003) found that among 13 companies known for their advanced people management, there were 13 different definitions of potential.

For those of you who followed the series on performance management, you already know my mantra when it comes to evaluating performance: It is notoriously difficult. However, when evaluating something that happened in the past, at least we have quite a lot of data. But imagine judging something that has yet to realize in the future. It should come as no surprise, then, that companies usually have very elaborate criteria for evaluating performance – and very few and rudimentary ones for evaluating potential. Actually, the most frequently used method seems to be managers’ intuitive impression.

As always, danger lurks in ill-defined terms. Those concepts often tend to become scenes for taken-for-granted assumptions, stereotypes, and ill-founded decisions. Still, in organizations, we cannot settle for the truism that potential is complex and difficult to define. Real, concrete decisions still have to be made about who to promote, who to send to that expensive training, and who to prepare for a senior leadership role. Thus, we have to draw on the knowledge that we have about potential to at least try and make these decisions as fair and accurate as possible. Therefore, we will spend the next few blog posts diving into three important questions about how to assess potential:

1. Potential for what? Is potential best seen as a generic or specific term? Should it be defined in relation to specific roles, or more as a general characteristic?
2. Disentangling performance and potential. A number of studies have shown that managers, when assessing employees’  potential, have a strong tendency to slide back into considering performance. We will consider how to separate the two.
3. Counteracting bias. Research shows that potential easily gets reserved for people who are similar to ourselves. But there are ways of countering this adverse impact.

Hopefully, we will walk out of this series somewhat wiser concerning the mysterious concept of potential.

 

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