The potential appraisal refers to the appraisal i.e.

identification of the hidden

talents and skills of a person. The person might or might not be aware of them.
Potential appraisal is a future oriented appraisal whose main objective is to
identify and evaluate the potential of the employees to assume higher positions
and responsibilities in the organizational hierarchy. Many organisations consider
and use potential appraisal as a part of the performance appraisal processes.
Potential appraisal can serve the following purposes:
To advise employees about their overall career development and future
prospects
Help the organisation to chalk out succession plans
Motivate the employees to further develop their skills and competencies.
To identify the training needs.
Techniques of potential appraisal:
elf appraisals
Peer appraisals
uperior appraisals
M!"
Psychological and psychometric tests
Management games like role playing
#eadership e$ercises etc.
Potential appraisal helps to identify what can happen in future so that it can
be guided and directed towards the achievement of individual and organizational
growth and goals. Therefore% potential should be included as a part of
the Performance appraisal in organisations.
Potential Appraisal

&n most &ndian organizations% people earn promotions on the basis of their past
performance. The past performance is considered a good indicator of future jobsuccess.
This could be true% if the job to be played by the promotee are similar. However% in actual
practice% the roles that a role holder played in the past may not be the same he is e$pected
to play if he assumes a different job after his transfer or promotion to a new position. Past
performance% therefore% may not be a good indicator of the suitability of an indicator for a
higher role.

To overcome this inade'uacy% organizations must think of a new system called potential
appraisal. The objective of potential appraisal is to identify the potential of a given employee
to occupy higher positions in the organizational hierarchy and undertake higher
responsibilities.

Potential appraisals are re'uired to(
inform employees about their future prospects)
help the organization chalk out of a suitable succession plan)
update training efforts from time to time)
advise employees about what they must do to improve their career prospects.

Introducing a Good Potential Appraisal System

teps to be followed while &ntroducing a *ood Potential +ppraisal ystem(

The following are some of the steps re'uired to be followed while introducing a potential
appraisal system(
Role Descriptions( "rganizational roles and functions must be defined clearly. To
this end% job descriptions must be prepared for each job.
ualities needed to perform the roles( !ased on job descriptions% the roles to be
played by people must be prepared ,i.e.% technical% managerial jobs and behavioral
dimensions-.
Rating mechanisms( !esides listing the functions and 'ualities% the potential
appraisal system must list mechanisms of judging the 'ualities of employees such
as(
i. .ating by others( The potential of a candidate could be rated by
the immediate supervisor who is ac'uainted with the candidate/s
work in the past% especially his technical capabilities.
ii. Tests( Managerial and behavioral dimensions can be measured
through a battery of psychological tests.
iii. *ames( imulation games and e$ercises ,assessment centre%
business games% in0basket% role play% etc.- could be used to
uncover the potential of a candidate.
iv. .ecords( Performance records and ratings of a candidate on his
previous jobs could be e$amined carefully on various dimensions
such as initiative% creativity% risk taking ability% etc.% which might
play a key role in discharging his duties in a new job.
!rgani"ing the system: +fter covering the above
preliminaries% he must set up a system that will allow the
introduction of the scheme smoothly giving answers to some
puzzling 'uestions(
i. How much weightage to merit in place of seniority in promotions1
ii. How much weightage to each of the performance dimensions technical%
managerial% behavioral 'ualities1
iii. 2hat are the mechanisms of assessing the individual on different indicators of
his potential and with what reliability1
#eed$ac%: The system must provide an opportunity for every employee to
know the results of his assessment. 3He should be helped to understand the
'ualities actually re'uired for performing the role for which he thinks he has
the potential% the mechanisms used by the organizations to appraise his
potential and the results of such an appraisal4
Potential appraisal is an important part of the appraisal process. +ppraising an
employee/s potential helps to evaluate and his5her capability for growth and
development to greater challenges% responsibilities and positions in the
organisational hierarchy. Most organisations incorporate potential appraisal in
their appraisal processes for identifying and developing suitable employee base
for succession planning.
This Performance appraisal concentrates on the future% based on the
performance of the past and helps in developing the personal interests of the
employees in alignment to the organisational goals.
2ith the help of the potential appraisal form% the employees5 individuals are
judged on various performance and behavioural parameters like(
The performance areas in which the improvement or development is
indicated.
The accomplishments and the targets achieved in the current appraisal
period
"verall rating of the performance
2hat skills% knowledge% competencies and 'ualities should be developed1
Has the employee taken any steps for improving his performance and his
career development1
.ecommendations for the training and development of the employee
6pdating knowledge on the latest developments on their job related and
subject areas.
.ate the employee on the following characteristics or how does the
employee fair on following behavioural characteristics(
o 7ecision making
o &ndependent
o 8onfidence towards the job
o Handling stress and pressure
o &nter0personal skills% both with superiors and subordinates
o #eadership% motivating and conflict handling
The past performance of the employee and the potential of performing in future
helps to identify the hidden talents.
Potential Appraisal
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The process of tracking unrevealed skills and abilities in a
person which even he/she is unaware of. Potential
Appraisal is a potent device for employee advancement.
Monday, December 22, 2008 4:06:42 PM1 Comments
Potential Appraisal is the process of tracking unrevealed skills and abilities in a
person which even he/she is unaware of. It is a future oriented appraisal wic aims
to trac! te potential of te employees to rise up in te or"anisational structure.
Potential #ppraisal is a potent de$ice for employee ad$ancement. %e term is not
!nown to many& owe$er, mana"ers of almost e$ery or"anisation a$e been ma!in"
potential assessments e$ery year.

Mana"ers use te predictors to determine weter te employee as te mana"erial
potential to e'ecute added responsibilities in te future. Potential #ppraisal elps in te
decision ma!in" of promotin" candidates and ma!in" a career plan for tem.

%o understand it better, we can compare it with the reviewing performance.Review
Performance is assessed on the basis of the targets accomplished and the skills
possessed and utilized by him/her. %e results act as indicators on te candidate(s
aptitude to mana"e e'tra functions. )owe$er, tis is not a foolproof way of !nowin"
weter added responsibilities will be andled successfully in future. %is ma!es
potential appraisal important.

Potential Appraisal cannot be applied to all in the same level. *or e.". tere are
people in te or"ani+ation wo a$e potential but wo do not perform ,attitudinal
problem-. .ome people e'cel in teir day to day /obs but wen laden wit additional
tas!s, tey fail ,workhorses-. If tey are promoted to i"er desi"nations ten it
becomes a problem for te employees and te company. %en tere are stars wo are
brilliant in teir /obs and a$e i" potential too& but since tey are pri+ed candidates,
tey are difficult to retain and are always on te loo!out of sometin" better and bi""er.

The time for a potential appraisal is not fixed. t is under the discretion of the
manager to hold the assessment activity. 0nli!e performance re$iew, it does not
appen at a particular period in e$ery or"ani+ation. %e mana"ers "enerally e'ercise it
wen an employee acie$es a certain milestone, or completes a year or is plannin" to
can"e /obs for wate$er reasons. 0sually it is recommended to ta!e place witin 6
monts.

The procedure of potential appraisal should commence and end with a meeting
between the two parties. In te first meetin" te mana"er can list te abilities re1uired
to deli$er additional tas!s. )e2se can recommend $arious ways to attain tem 3 in4
ouse trainin" pro"rammes, e'ternal wor!sops, etc. %e latter meetin" can be a
re$iew ,usually after 6 monts- to test weter te s!ills a$e been ri"tly ac1uired or
not. Durin" te obser$ation time te mana"er is supposed to note te $arious abilities
adopted and used by te candidate in wor! and te impro$ement areas. %e employee
sould be ready to defend e$ery action wit e'amples. %ey can ten cal! out a plan
to case te potential and taste "rowt in te or"ani+ation.

t should be noted that a potential appraisal does not guarantee
promotion.5ormally, most of te companies do it to facilitate te "rowt of an
indi$idual. %e companies can use te results of suc an assessment for 4

6ecommendin" a "rowt plan and sowin" a bi""er picture to te employees.
Infusin" entusiasm in te employees to sarpen te abilities.
7earnin" about te trainin" re1uirements of te employees.
Drawin" a succession plan for future.
&ishaSyed
9uly ::th% ;<<=% :<(>; +M
The research is about studying the ?mployee/s potential level in @?#8+T #T7 at
Head "ffice. The objective of this project is to find out the capabilities and skills of
the employee/s and re'uest the management to provide necessary training re'uired
for the present job or for the higher position or responsibility and predicting his or
her future performance which aid the organization in fitting the right person in the
right job and in improving company/s performance.
Potential appraisal is an important part of the appraisal process. +ppraising
employee/s potential helps to evaluate his5her capability for growth and
development to greater challenges% responsibilities and positions in the
organizational hierarchy. Most organization incorporate potential appraisal in their
appraisal processes for identifying and developing suitable employee base for
succession planning.
This appraisal concentrates on the future% based on the performance of the past
and helps in developing the personal interests of the employees in alignment to the
organizational goals.
+n interview was made and the evaluation of the employee/s potential level
collected in a 'uestionnaire through superior appraisal process. This study would
help the management to assess the capabilities of the employees accordingly they
can provide training and take necessary measures to improve their capabilities and
skills to fulfill the present and future re'uirements and various statistical tools used
over the data collected to ascertain the employee/s potential.
&@T."768T&"@
Potential appraisal is another powerful tool of employee development. 2hether
managers realise it or not% they are accustomed to make potential assessments.
?very time a manager recommends or fails to recommend an employee for a
promotion% a potential assessment has% in fact% been made. The process of
assessing the managerial potential of employees deals with the 'uestion of whether
or not they have the ability to handle positions in the future which involve
considerably more responsibility than what they have right now. +s long as
individuals are viewed as being able to handle increased or different responsibilities%
they would be considered to have potential ,either latent or visible-.
Potential appraisal may thus be defined as a process of determining an employee/s
strengths and weaknesses with a view to use this as a predictor of his future
performance. This would help determine the promotabilty of an individual to a
higher position and help chalk out his career plan. The fundamental difference
between reviewing performance and assessing potential is in the criteria used. &n
reviewing performance% the criterion used is what goals the employee achieved and
what skills he or she currently possesses that could be indicators of his or her
ability to assume different or more advanced responsibilities. &t is this that makes
potential appraisal a very crucial A critical area.
&f an employee without re'uisite abilities is promoted to a higher position and does
not perform as per e$pectations% then it becomes impossible to demote him. Thus%
he is unable to perform at the higher level and becomes a Bpassenger/ in the
system. &t is rightfully assumed that every individual has potential% low or high.
Many organizations have people whose potential being low) performance too is not
up to the mark. 2hilst the 'uestion in our minds hovers around how such people
got into the system% the fact remains that they do not contribute to the
organization/s performance. &f appraisal process implemented well% professional
performance and potential appraisal could take the organisation on a fast
development track and faster productivity through people.
The potential appraisal refers to the appraisal i.e. identification of the hidden talents
and skills of a person. The person might or might not be aware of them. Potential
appraisal is a future oriented appraisal whose main objective is to identify and
evaluate the potential of the employees to assume higher positions and
responsibilities in the organizational hierarchy. Many organizations consider and use
potential appraisal as a part of the performance appraisal processes.
Potential appraisal is one of the most important re'uirement for successful business
and human resource policy ,kressler ;<<>-. .ewarding and promoting effective
performance in organization% as well as identifying ineffective performers for
developmental programs or other personnel actions are essential to effective
human resource management ,Pulakos ;<<>-.
Project on potential appraisal was done by many% and the research process carried
out to find out the employee/s potential. ajitha @air had done a project on
potential appraisal for succession planning in the year ;<<C. he looked at the
competencies re'uired by the person who will fit in the job role. Then looked at the
competencies possessed by the person and did a gap analysis. he found that
everyone e$cels in all key actions% full mastery of all competencies.
*auging employee/s potential for managerial skills was done by 9asmine ,;<<D-.
he found that employees lack in decision making skills so that should be improved
by various training methods. hradha ,;<<D- did a research study on potential
appraisal process. he recommended that potential appraisal is an effective method
to find out hidden talents and skills.
P"T?@T&+# +PP.+&+# 8+@ ?.E? TH? F"##"2&@* P6.P"?(
G To advise employees about their overall career development and future prospects
G Help the organization to chalk out succession plans
G Motivate the employees to further develop their skills and competencies.
G To identify the training needs.
T?8H@&H6? "F P"T?@T&+# +PP.+&+#(
elf appraisals
Peer appraisals
uperior appraisals
M!"
Psychological and psychometric tests
Management games like role playing
#eadership e$ercises etc.
2ith the help of the potential appraisal form% the employees5 individuals are judged
on various performance and behavioural parameters like(
G The performance areas in which the improvement or development is indicated.
G The accomplishments and the targets achieved in the current appraisal period
G "verall rating of the performance
G 2hat skills% knowledge% competencies and 'ualities should be developed1
G Has the employee taken any steps for improving his performance and his career
development1
G .ecommendations for the training and development of the employee
G 6pdating knowledge on the latest developments on their job related and subject
areas.
G .ate the employee on the following characteristics or how does the employee fair
on following behavioural characteristics(
o 7ecision making
o &ndependent
o 8onfidence towards the job
o Handling stress and pressure
o &nter0personal skills% both with superiors and subordinates
o #eadership% motivating and conflict handling
The past performance of the employee and the potential of performing in future
helps to identify the hidden talents.
?#F +PP.+&+# F".M
elf appraisal is the self evaluation where the employee himself gives the feedback
or his views and points regarding his performance. The employee himself critically
analyses the performance% his strengths% weaknesses% accomplishments% problems
faced% the training and development needs ,if any- etc. The self appraisal form
generally starts with the employee details like(
G The name of the employee
G 7esignation
G 7ate of joining
G 7ate of last appraisal
G 7epartment
G .eporting officer
The ne$t section is% commonly% designed to gather the information from the
employee regarding his on0the0job performance and his responsibilities(
G The current responsibilities held by the employee
G +ccomplishments
G *oals for the ne$t appraisal period
G +reas for improvement
G Training re'uirements felt for the present job
G .esponsibilities the employee would like to add to his current responsibilities
G Problems faced
G olutions tried
G Measures taken for personal and professional development
G !est and worst aspects of the job
G &s the superior supportive
The form also includes a section where the employee rates himself on various
behavioral parameters like(
G 8ommunication skills
G &nter0personal skills
G Problem0solving
G Team work
G +daptability5Fle$ibility
G &nitiative
G 7ecision Making
G #eadership
G Maturity
The self appraisal form also includes a section where the employee can 'uote
e$amples and incidents to support his ratings and answers.
The self appraisal form generally ends with a subjective section asking for
suggestions and the choice of discussing any other topic that the employee feels
the need to raise and discuss.
+PP.+&+# P."8?
Potential appraisal is an important part of the appraisal process. +ppraising an
employee/s potential helps to evaluate his5her capability for growth and
development to greater challenges% responsibilities and positions in the
organisational hierarchy. Most
organisations incorporate potential appraisal in their appraisal processes for
identifying and developing suitable employee base for succession planning.
This appraisal concentrates on the future% based on the performance of the past
and helps in developing the personal interests of the employees in alignment to the
organisational goals.
Potential appraisal is another powerful tool of employee development. The
fundamental difference between reviewing performance and assessing potential is
in the criteria used. &n reviewing performance% the criterion used is what goals the
employee achieved and what skills he or she currently possesses that could be
indicators of his or her ability to assume different or more advanced responsibilities.
&t is this that makes potential appraisal a very crucial A critical area. &f an employee
without re'uisite abilities is promoted to a higher position and does not perform as
per e$pectations% then it becomes impossible to demote him.
Thus% he is unable to perform at the higher level and becomes a Bpassenger/ in the
system. &t is rightfully assumed that every individual has potential% low or high.
Many organizations have people whose potential being low) performance too is not
up to the mark. 2hilst the 'uestion in our minds hovers around how such people
got into the system% the fact remains that they do not contribute to the
organization/s performance.
*+6*&@* ?MP#"I?? P"T?@T&+# F". M+@+*?M?@T P"&T&"@
The aim of potential assessment is to identify training and development
needs% provide guidance on possible directions in which an individualJs
career might go% and indicate who has potential for promotion.
+ more comprehensive approach is provided by the use of assessment centres.
These incorporate a range of assessment techni'ues and typically have the
following features(
G The focus of the centre is on behaviour.
G ?$ercises are used to capture and simulate the key dimensions of the job. These
include one to one role plays and group e$ercises. &t is assumed that performance
in these simulations predicts behaviour on the job.
G &nterviews and tests will be used in addition to group e$ercises.
G Potential is measured in several dimensions in terms of the competencies re'uired
to achieve the target level of performance in a particular job or at a particular level
in the organization.
G everal candidates or participants are assessed together to allow interaction and
to make the e$perience more open and participative.
G everal assessors or observers are used in order to increase the objectivity of
assessments. &nvolving senior managers is desirable to ensure that they JownJ the
process. +ssessors must be carefully trained.
+ssessment centres provide good opportunities for indicating the e$tent to which
candidates match the culture of the organization. This will be established by
observation of their behaviour in different but typical situations% and by the range of
the tests and structured interviews that are part of the proceedings. +ssessment
centres also give candidates a better feel for the organization and its values so that
they can decide for themselves whether or not they are likely to fit.
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