Picture a situation where you need to hire someone to assess the quality of different AI tools. When considering potential candidates, you are likely to include a computer science degree as a desired qualification. If you also ask for prior work experience, chances are that a significant number of the eligible candidates might have completed their degrees several years in the past.
This leaves us with one question – how well do the skills they gained during their degree align with the needs and requirements of the employment environment today?
This of course does not imply that the effort of acquiring hard knowledge from different experts is not valuable. However, we shouldn’t neglect the fact that the critical skills and competencies we need from our employees are no longer the same as they were. Especially as our ideal goal is to ensure their ability to meet the skill demands of this rapidly evolving world.
Looking at the statistics, there were approximately 116 AI tools launched into the market in 2020. Halfway through 2023, there were already almost 5000 AI tools available to everyone and this number is increasing everyday (Martin, June 2023; There’s an AI for that). Therefore, how well our employees implement these tools to improve their work processes or how efficiently they learn new skills will undoubtedly affect the company’s performance.
This is where their’ ‘potentials’ comes into play.
In this article, we will touch upon:
- What exactly does ‘potential’ mean?
- How does potential affect training and job performance?
Definition of “potential”
The concept of “potential” might seem challenging to grasp at first. Yet rest assured, we are here to provide you with a clear explanation. Potential is indeed a multidimensional construct, which is constituted by 3 main dimensions (Church, 2014; Silzer & Church, 2009):
It represents the basic characteristics of an individual, which are genetically determined and/or shaped early in life. Specifically, it includes factors such as cognitive abilities and personalities.
Within this dimension, for example, we often identify high potential people as those who are smarter, better at strategic thinking, having strong interpersonal skills and perhaps above average interpersonal sensitivity. In adulthood, they are relatively stable across situations as they are unlikely to develop much without intensive interventions.
It reflects individuals’ ability and orientation when it comes to personal development and growth. Two factors in this dimension are learning ability and individual motivation. In this context, as an example, people who have high learning agility, high adaptability, high ambition and often engage themselves in feedback-seeking behaviour are more likely to be identified as high potential people.
People’s learning abilities are rather stable across situations but might manifest when they have strong personal interests in certain areas, are provided with opportunities in their interest-area and have a supportive environment.
It speaks for the early indicators of skills needed to be successful in specific careers. Two factors representing this dimension are traditional leadership competencies and pure functional and technical skills. With that being said, it can be learned and developed if the person also shows potential in the growth dimensions. It is also very much dependent on the specific career paths.
For example, people who are more often involved in inspiring others, demonstrating courage, building trust and developing teams might have higher potential for management positions. On the other hand, people who are constantly developing their functional expertise, and have extensive domain-specific knowledge can also be labelled as high-potential people within their expertise field.
From the definitions above, you may have already noticed that functional or technical skills(which are domain-specific) only account for a very small part of the whole concept of potential. Thus, again we would like to encourage you not to only look at someone’s established hard skills (from career dimensions), but also pay attention to the other factors (from foundation and growth dimensions) that make up someone’s potential.
How does potential affect training and job performance?
Some evidence regarding cognitive abilities and job performance
When we look at all valid predictors of job performance, cognitive abilities are ranked at the top of the list (e.g., Schmidt et al., 2016; Salgado & Moscoso, 2019; Ones et al., 2005). The reason behind this is that cognitive abilities tests are usually developed to test our everyday mental functioning. It is activated no matter what, in various situations throughout our daily life (Ones et al., 2012). For example, whether you are planning your grocery lists or the timeline of a project you are working on, you will need your planning, problem-solving and working-memory skills, which are part of your cognitive abilities.
Other than that, it is generalisable to different domains. For instance, no matter if you are a driver, a graphic designer, an engineer or a project manager, you may need to utilise your spatial intelligence, or planning skills, to just name a few.
An example of the effectiveness of general cognitive abilities tests is the research from Kuncel and colleagues (2004). They have provided evidence that cognitive abilities are related to school-to-work transitional criteria (ratings of internship/ practicum), creativity (ratings for a person’s creativity or potential for creative works) and potential (ratings for one’s potential in conducting research and counselling).
Hiring for potential: cognitive abilities and training performance
Identifying high potential individuals can happen in every phase of employment, starting from hiring, onboarding, promoting, career trajectory, and so on. To narrow down our discussion, we would like to shed light on the very beginning of the employment cycle, the hiring process.
So, which tests should we choose if we want to hire for potential?
The answer is: cognitive abilities test.
The potential that we hope to see in our employees is related to whether they can keep up with dynamic working environments. This implies that they can ideally fill up any underlying skill-gaps in the shortest time possible. More specifically, we expect they can perform well not only in their every-day tasks, but also while training for new skills.
Conceptually, cognitive abilities tell us the potentials’ for learning in the most general sense. That is, the ability to learn (Ones et al., 2012). Some evidence from empirical studies showed us that people with higher cognitive abilities will acquire more job knowledge and acquire them faster (Schmidt, 2002; Ones et al., 2005). Thus, cognitive abilities are good predictors for learning outcomes and training performance.
Furthermore, Van Iddekinge and colleagues (2017) have conducted a meta-analysis comparing the predictive power of motivation and cognitive abilities. The results showed that cognitive abilities are a much stronger predictor than motivation in both training performance and to perform on work-related tasks in laboratory studies.
In short, to know about one’s capabilities to learn new things, we should select people based on cognitive abilities.
Maximum Performance vs Typical Performance
Another concept concerning performance is the difference between maximum performance (MP) and typical performance (TP).
- Maximum performance (MP): It represents how much a person “can do” (DuBois et al., 1993). During MP tests, people are aware that they are being tested. Thus, they strive to perform at their fullest potential. At this time, all of their attention or mental resources are invested into getting scores that are as high as possible (Klehe & Anderson, 2017). Examples of MP tests include cognitive abilities tests, job knowledge tests, achievement tests etc.
- Typical performance (TP): It refers to how much a person “will actually do”. During the TP tests, people are relatively unaware of being tested as the test usually lasts a longer period (e.g., a performance review will not be only based on a very single moment, but on a quarterly basis). In this case, they are not consciously trying to perform at their fullest potential at all times. Examples of TP tests include 360 degree performance review, personality tests, attitude test etc.
Generally, people will perform better under the conditions of the MP test than the TP test because their motivation of getting high scores is at its peak (e.g., Klehe & Anderson, 2007). Thus, results from MP tests can show us the outcome of people performing at their fullest potential. With that being said, results from MP tests are good indicators of people’s potential since it provides us with a clear picture of what people are capable of doing (i.e., the ‘ceiling’ of people’s abilities).
In a nutshell, if we want to hire people based on their potential, we can implement maximum performance tests, such as cognitive abilities tests.
One question, however, remains – how can we know which cognitive skills to assess when hiring for potential and do they differ across sectors, as well as seniority levels?
Church, A. H. (2014). What do we know about developing leadership potential? OD Practitioner, 46(3), 52-61.
DuBois, C. L., Sackett, P. R., Zedeck, S., & Fogli, L. (1993). Further exploration of typical and maximum performance criteria: Definitional issues, prediction, and white-black differences. Journal of Applied Psychology, 78(2), 205. https://doi.org/10.1037/0021-9010.78.2.205
Klehe, U. C., & Anderson, N. (2007). Working hard and working smart: Motivation and ability during typical and maximum performance. Journal of Applied Psychology, 92(4), 978. https://doi.org/10.1037/0021-9010.92.4.978
Kuncel, N. R., Hezlett, S. A., & Ones, D. S. (2004). Academic performance, career potential, creativity, and job performance: Can one construct predict them all?. Journal of personality and social psychology, 86(1), 148. https://doi.org/10.1037/0022-3522.214.171.124
Martin, N. (2023, June 10). The Boom of AI Tools – Nerd For Tech – Medium. Medium. https://medium.com/nerd-for-tech/the-boom-of-ai-tools-d430060f5fe0#:~:text=2023%20is%20a%20surprising%20year%20for%20Artificial%20Intelligence%20with%20almost,the%20best%20strategy%20with%20them.
Ones, D. S., Dilchert, S., & Viswesvaran, C. (2012). Cognitive abilities. In N. Schmitt (Ed.), The Oxford handbook of personnel assessment and selection (pp. 179–224). Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199732579.013.0010
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Salgado, J. F., & Moscoso, S. (2019). Meta-analysis of the validity of general mental ability for five performance criteria: Hunter and Hunter (1984) revisited. Frontiers in Psychology, 10, 2227. https://doi.org/10.3389/fpsyg.2019.02227
Schmidt, F. L., Oh, I. S., & Shaffer, J. A. (2016). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 100 years. Fox School of Business Research Paper, 1-74.
Silzer, R., & Church, A. H. (2009). The pearls and perils of identifying potential. Industrial and Organizational Psychology: Perspectives on Science and Practice, 2(4), 377–412. https://doi.org/10.1111/j.1754-9434.2009.01163.x
Van Iddekinge, C. H., Aguinis, H., Mackey, J. D., & DeOrtentiis, P. S. (2018). A meta-analysis of the interactive, additive, and relative effects of cognitive ability and motivation on performance. Journal of Management, 44(1), 249-279. https://doi.org/10.1177/0149206317702220