Marie LaMarche

Yes.

Transparency builds trust.

Transparent succession plans reinforce the company’s message to employees that their skills and experience are valued. They create the trust and buy-in needed to help the company retain top performers and reduce turnover and recruitment costs.

Having an open dialogue about development opportunities and career paths also ensures that leaders aren’t unknowingly forcing top performers down paths they don’t want to go.

The best succession plans fuel proactive development of leaders and create a distinct competitive advantage for their companies, according to a 2012 Aon Hewitt study. They are as transparent as possible and encourage clarity and integrity, while minimizing politics. These components create a culture and atmosphere of trust and ongoing growth and development.

In a 2010 Center for Creative Leadership survey, 77 percent of 199 respondents said it was highly important to them to be formally identified as high-potential employees.

With voluntary turnover rates and retention an increasing challenge among health care organizations everywhere, my company is focusing on engagement strategies that will help us retain high-potential employees. Focused leadership development that is communicated directly to succession plan participants is key to our strategy.

Harrison Medical Center’s leadership development program starts with a nomination and selection process. The employees chosen are mentored and assigned a rigorous leadership curriculum. Not surprisingly, they tend to stay engaged and remain with our company longer than nonparticipants. They appreciate the time and effort we are investing in them, and they are more motivated because they see a path for continued growth and development.

Leaders everywhere lament the loss of high-potential employees who leave for better opportunities because they were either unaware of potential career paths or simply not engaged enough to stay. According to a 2014 Towers Watson survey, more than half of global employers reported having difficulty retaining high-potential employees.

Letting employees know that their skills and experience are valued dissuades top performers from leaving, according to David Leonard, executive director of the executive development program at the University of North Carolina. He recommends providing top performers with leadership development opportunities as a way to drive engagement and satisfaction.

It also is important to discuss employees’ career aspirations with them to gauge their interest in opportunities at your company. A noted skill may not coincide with an employee’s ambitions.

For example, in a department I lead, a high-performing nurse practitioner who stepped in to fill an interim leadership role showed great promise. However, after discussing development plans with her, I discovered that she had absolutely no interest in that role. She preferred to focus on direct patient care.

It’s all about communication. Being upfront with employees leads to both more-effective succession plans and more-engaged leaders.

— Marie LaMarche, SPHR, executive director of HR and organizational development, Harrison Medical Center, Bremerton, Wash.

Kim E. Ruyle

No.

Labeling employees can create entitlement and tension.

To be sure, an appropriate level of transparency in the workplace leads to enhanced engagement. However, it’s one thing to inform employees that Jane will be moving into Joe’s role when he retires at the end of the year and quite another to create and publicize a list of high-potential employees. That tactic is a bad idea. Here are some reasons:

False positives are common when identifying high potentials. People are incredibly complex. Some will delight us; others will disappoint us. Research bears out the difficulty of accurately predicting success. In fact, some studies indicate that nearly 50 percent of promoted individuals fail to fully meet expectations within 18 months of being promoted. Although managers often believe they can intuitively spot talent and make accurate decisions and predictions about talent, in reality most do not.

Labeling employees can create a sense of entitlement. Success must be earned at every step along the career path, and there’s no such thing as a permanent status. If employees believe they’ve been conferred a position that entitles them to promotions and exclusive opportunities, you will experience problems. We’ve probably all seen employees, especially those early in their career, who are afflicted with entitlement. I recall one job candidate who showed up at an interview with a business card identifying him as a “high potential.”

Potential is a continuum, not a permanent condition that you either have or you don’t. Virtually all employees have some potential, the ability to learn and grow and contribute more. Certainly, some have more than others. But drawing a line on the continuum to separate the high potentials from the hoi polloi is likely to create a sense of gross unfairness in those who don’t “make the list.”

Violations of fairness are a sure route to disengagement. Leaders recognize this and will often engage in all kinds of bizarre behavior to avoid engagement problems and political complications. Executives at one organization even confessed to me that they maintained two high potentials lists—one that was public and quite inclusive and a “real list” that identified those actually held in high regard.

High-potential employees don’t need to be told they have high potential. They already know it. Firms that excel at leveraging talent are masters at differentiating their talent, and we absolutely should be transparent about how we differentiate talent and apply different treatment. High potentials are developed differently, engaged differently and deployed into roles differently than other employees. If you’re applying good talent management practices, your most promising people are getting more attention: You’re giving them more responsibility, stretching them more and advancing them more rapidly.

Employees who are indeed high potentials are smart enough to know exactly where they stand.

— Kim E. Ruyle, president, Inventive Talent Consulting LLC, Coral Gables, Fla.