High Potentials vs. High Performers

We often encounter the myth that top-performing employees are automatically future leaders. Consequently, excellent experts frequently end up in management roles where they feel uncomfortable. Even worse, they often fail.

Imagine your best programmer. They can write superb code in minutes, effortlessly protecting a site owner from online attacks by identifying malformed data or a dangerous SQL command hidden in a word or phrase. They might implement a robust security solution or manage a complex security service better than anyone else. However, does that mean they will be a great CTO? Not necessarily.

Distinguishing between High Potential (HiPo) and High Performer (HiPe) is a critical factor for the sustainability of any organization. Although these two groups partially overlap, they are not identical. Therefore, if a company fails to distinguish them, it risks poor promotions, employee demotivation, and a weak leadership pipeline.

Who is a High Performer?

A High Performer is the “star of the present.” This employee consistently delivers above-average results in their current role. They are your most effective salespeople, precise analysts, or creative designers.

Typical characteristics of high-performing employees:

• Consistent results: They steadily meet or exceed goals.
• High expertise: They possess deep knowledge in their field.
• Reliability: They are efficient and dependable.
• Go-to status: They are the first choice for complex tasks.
• Measurable success: Their output is clear through KPIs, project results, or performance reviews.

Identifying them is relatively straightforward. You can use performance management data, goal completion rates, and feedback from stakeholders. Crucially, a high performer excels “here and now” in their current job.

Who is a High Potential?

A High Potential employee possesses the ability, motivation, and personality to successfully hold much more complex roles in the future. It is not about what they do today. Instead, it is about what they can achieve in a few years. Identifying this top talent allows companies to offer specific growth opportunities.

Typical signs of high potential talent:

• Learning agility: They learn and adapt quickly.
• Strategic thinking: They see the bigger picture and context.
• Natural influence: They impact others effortlessly.
• Resilience: They handle complexity and uncertainty well.
• Ambition: They have an internal drive to grow and accept new challenges.
• Creative thinking: They approach problems with innovation.
• Managerial courage: They are willing to make difficult decisions.
• Competitive drive: They possess a strong desire to excel and advance.

How Companies Identify High Potentials

Unlike high performers, you cannot measure high talent potential by results alone. Therefore, HR leaders combine multiple approaches:

• Behavioral indicators (how a person acts in new situations).
• 360-degree feedback and employee surveys.
• Development centers and executive assessments.
• Psychometric testing and leadership competency evaluations.
• Structured interviews.

The Role of Psychometric Testing

While numbers measure performance, diagnostics reveal potential. Diagnostic tools objectively measure the cognitive abilities, competencies, and motivations necessary for upper management. Furthermore, psychometrics eliminate subjective bias from managers who might nominate people based on personal preference or seniority. To get a complete picture, many organizations utilize tools like the High-Potential Trait Indicator or employee engagement surveys to gauge alignment.

Psychometric tools (e.g., Hogan Assessments, SHL, Korn Ferry) answer questions performance data cannot:

• Does this person have leadership predispositions?
• How do they react under pressure?
• Can they make decisions in uncertainty?
• Are they an expert or a leader?

Here, it often becomes clear that great performance does not equal readiness for the next level. A 2014 Korn Ferry study showed that companies using psychometrics for HiPo identification have 25% higher profitability. However, newer studies from 2025 reveal a gap. While 91% of HR professionals rely on subjective performance feedback, only 45% use psychometrics.

Shared Traits and Critical Differences

Common ground includes:

• High engagement.
• Above-average contribution.
• Willingness to take responsibility.
• Ability to learn.

Some employees can be both High Performers and high-potential employees. However, this is certainly not automatic.

Where Do Paths Diverge? (The Peter Principle)

A High Performer may be happy and maximally useful in an expert role. However, if you promote them to manager, their performance might paradoxically drop. This happens because they lack soft skills or strategic thinking. Performance is how well you play the violin; potential is whether you can conduct the orchestra.

Confusing these concepts leads to the famous Peter Principle, described by Dr. Laurence J. Peter in 1969. It states: “In a hierarchy, every employee tends to rise to his level of incompetence.”

The result is an excellent expert failing as a manager—not because they are weak, but because they lack the specific skillset for the new role. Consequently, performance in one role is not a predictor of success in another.

Impact on the Company

Companies that systematically promote solely based on past performance often face:

• Weak leadership.
• Demotivated teams.
• Higher turnover.
• Loss of top experts.
• Toxic corporate culture.

From an HR perspective, this is a very expensive error that negatively impacts succession planning and overall ROI measurement.

The 9-Box Grid Tool

The most effective way to visualize the difference between performance and potential is the 9-box grid. It divides employees into nine fields based on two axes: Current Performance (X) and Future Potential (Y).

	Low Performance	Moderate Performance	High Performance
High Potential	Rough Diamond (Investigate cause: skill gap or wrong role?)	Future Star (Focus on growth & complex tasks)	Star (Prepare for succession & mentoring)
Medium Potential	Question Mark (Set PIP; potential is being wasted)	Key Player (Stabilize & offer development)	High Professional (Key expert; maintain motivation)
Low Potential	Underperformer (Consider offboarding)	Effective Doer (Keep satisfied; no vertical growth needed)	Expert (Value loyalty; experienced “workhorse”)

How to Work with the Matrix

1. High Potential Row (Top):

• Stars: Prepare them for succession. Assign a mentor from top management.
• Future Stars: Focus on professional growth and assign complex tasks.
• Rough Diamonds: Investigate the cause of lower performance. Is it a skill gap or the wrong position?

2. Medium Potential Row (Middle):

• High Professional: Maintain their motivation. These are key experts who don’t necessarily want to lead.
• Key Player: Stabilize them and offer development courses.
• Question Mark: Set a clear Performance Improvement Plan (PIP). If performance doesn’t rise, potential is being wasted.

3. Low Potential Row (Bottom):

• Expert: Value their loyalty. They are experienced “workhorses.”
• Effective Doer: Keep them satisfied; they don’t need vertical growth.
• Underperformer: Consider if a better role exists or prepare for offboarding.

Streamlining Your Talent Management

Strategic talent management requires a distinct approach for each group to prevent turnover.

1. Competency Models

The firm must clearly define “success” for both expert and management roles. Additionally, competency models should be transparent. Employees need to know exactly what is expected for both horizontal and vertical growth.

2. Internal Academies and Development

Create tailored programs for High Potentials. Include leadership skills, mentoring, coaching, and cross-functional rotations. We recommend measuring skills via psychometrics first. Then, retest after 1–2 years to track progress.

Conversely, offer Expert Academies for High Performers. Offer certifications or internal trainer roles. Show them that career progression exists on the expert path, not just in management.

3. Performance Management

Your evaluation system should distinguish between “What was delivered” (Performance) and “What capabilities were demonstrated for the future” (Potential).

4. Leveraging HR Technology

To manage this complexity, companies should utilize modern HR platforms and performance management software. These systems assist in organizational development by facilitating competency mapping to build accurate success profiles. Furthermore, performance management tools help visualize the career path, manage the mentorship program, and distribute training resources effectively.

Real-World Case Studies

• Google (Project Oxygen): Google found that technical expertise ranks last in great management traits. Instead, coaching ability and creating psychological safety are key. This confirms HiPo programs must target soft skills, not just technical depth.
• General Electric (GE): GE pioneered talent identification. They used “stretch assignments” to test adaptability immediately. Global giants like Unilever and IBM also use separate tracks for HiPo and HiPe, relying heavily on assessment data.

Conclusion

High Potentials are your insurance for the future. In contrast, High Performers are the engine of your present. To prosper, you must nurture both groups, but differently. Stop promoting people based only on tenure. Instead, start developing them according to their actual potential through targeted talent development programs and leadership development programs.

This approach ensures a future ready workforce, higher employee satisfaction, and improved performance indicators within a growth-oriented culture. Otherwise, you risk creating a “burned-out expert” in a manager’s chair.