Do High-Potential Employee Programs Work?

Here’s the catch: The researchers picked the late bloomers at random — they had no special qualities or high potential compared to the rest of the students. But the teachers’ belief in the late bloomer group improved their intelligence. By the sheer force of high expectations, a randomly-selected group made the researchers’ prophecy come true.

Simply naming someone as “high potential” changes their performance, by changing others’ expectations of them

Soon enough, studies showed the same Pygmalion effect with therapists, nurses, and managers.² Clients in treatment for alcohol abuse were more likely to succeed if they were labeled “motivated” compared to others who were “unmotivated” — even if the label wasn’t true.³ Nurses and aides treated nursing home residents differently if experts said they would progress faster in their rehab compared to those labeled as “slower progressors”.⁴ These fast-healing residents had fewer hospital admissions and had fewer depressive symptoms, despite the labels meaning nothing at the start.

How does this work? For the most part, it occurs under our conscious awareness. Teachers, nurses, therapists, and managers don’t even remember treating one group differently than the other. Despite this, professionals of all kinds act differently towards people who have higher potential. Teachers give high-potential students more challenging work, more constructive feedback, and act friendlier to them.⁵ Leaders act differently toward high-potential teams by showing them more enthusiasm, encouragement, coaching, and confidence.⁶

Our expectations of others are below our conscious awareness, but they change how people perform.

Leaders influence their employees’ actions directly with differential treatment. They also create a self-fulfilling prophecy by changing workers’ expectations about themselves. When researchers take employees’ self-expectations into account, the Pygmalion effect goes from explaining 32% of the improved performance to only 6%.⁶ This means high-potential labels can raise leaders’ expectations, which in turn raise workers’ expectations, which improves their performance. Sometimes this process is even shorter: When companies tell employees they are on a high potential track, this works to increase the employees’ own expectations. This means the high-potential label is enough to improve any randomly selected employee’s performance. Below is a visual explanation of Sarah and Jennifer from our story above.

Telling employees or their managers about their high-potential status raises employees’ self-expectations

Now that we know high-potential programs can create a self-fulfilling prophecy through the Pygmalion effect, what can we do about this? Companies can take three big steps to strengthen their high-potential system:

Any program in your organization is only as good as the data you put into it. If your methods for choosing talented workers is flawed, then your program will be flawed in the same ways. This means you need more accurate, relevant data on the skills and success of applicants during your hiring process and from your performance management system. For example, performance reviews are influenced by how confident and busy an employee seems. These aren’t good measures of potential or performance. Instead, measure performance through team members’ evaluations and objective progress towards employees’ goals.

If you choose to create (or improve) your high-potential process, focus on the quality of your decisions. After all, people who look like leaders are still seen as having more leadership potential than others who don’t fit the stereotype.⁷

Is talent something that only some people have? Is talent innate or can it be developed? Your company’s views on these two questions shape the way they might approach high-potential programs, as their goal is to find and invest in talented employees. Below are the four ways companies think about talent and their implications for development programs.⁸

This talent matrix shows the underlying assumptions that come from believing talent is exclusive vs inclusive and static vs dynamic.8If your company follows the static and exclusive approach, you can design a limited high-potential program that focuses on keeping these employees happy but doesn’t try to change their performance. Instead, a company following the dynamic and inclusive approach would invest in all its employees with customized programs that match their interests and career path. When developing a talent program, companies should choose whether they will train everyone, a few select people, or none at all.

So far, we can see how high expectations help employees by increasing their motivation and performance. Yet high expectations can backfire or have other unintended consequences. That’s why you should match your talent development approach in section number 2 with the transparency level that works for your company’s culture. If your company has a competitive, cut-throat culture, sharing employees’ high-potential status with each other could backfire. As well, if you have an exclusive approach to talent, transparency might hurt your overlooked employees even more.

High-potential programs can shape companies’ and employees’ futures. They are risky because the large investment in workers can become a self-fulfilling prophecy if programs are not designed well. This raises questions about how useful these expensive programs are. Why are employees spending so much time in leadership training academies, if telling their boss about their high-potential label works just as well, and for free? If anyone can rise to our expectations, it’s time to question our beliefs about who has talent and who doesn’t.