Talent management and the 9-box grid – what you must know

When assessing the performance of employees, a manager primarily focuses on two aspects:

• The level of employee performance in the present time
• The likely level of performance in the future or their potential to grow

Basis these parameters, they are likely to find the following categories of employees:

• The high performers with great prospects
• The hard workers, doing their job well but showing poor potential for growth
• The hard workers, doing their job well but showing poor potential for growth

Employee Performance has a Direct Bearing on Succession Planning.

Assessing the performance of employees is essential to planning their career paths and ultimately transitioning them into future, senior roles— otherwise known as succession planning. When performance is properly assessed, it becomes easier to identify and coach those with the potential to become leaders in the future. This helps to understand the fitness of team members with their roles and grooms them for future growth within the firm.

The question, then, is how to find such potential leaders among the performance categories of employees.

Enter the 9-Box Grid!

The 9-box grid is a talent management tool widely used by managers to assess the performance versus potential of employees and to guide their plans for employee development and succession. On the x-axis is performance, measured by performance reviews; on the y-axis is potential, the likelihood of moving up a couple of levels in managerial or professional roles.

The 9-box grid has its roots in the 1970s, when management consulting firm McKinsey created it as an assessment framework to help General Electric (GE) prioritize its investments across business units. It was then known as the GE-McKinsey nine-box framework and it was inspired by the growth-share matrix from the Boston Consulting Group. The structure, though, was a bit different – it plotted industry attractiveness against competitive strength, to guide the investment decision. Since then, HR has adapted the grid to cover recruitment and selection purposes by changing the axial parameters as per their purposes.

How does the 9-Box Grid Work?

Being a key part of the performance management process, the grid requires HR and talent managers to put their heads together and assign employees to relevant boxes on the grid, basis their assessed levels of performance and potential. The conversation must be comprehensive, though the process itself is iterative – insights from assessing one employee could well shift the assessment of the other. Competitor actions or organizational objectives could also alter perspectives on how valuable current aptitude areas will be in the future.

Here is what the 9-box grid looks like:

How do you Create the 9-Box Grid?

The process requires diligence, and comprises three steps:

• Assess performance: There are three categories of performance – low, moderate, and high – into which employees are placed in a performance appraisal. A simple classification would be someone not matching job requirements and targets fully, matching both partially and fully, respectively.
• Assess potential: Another aspect addressed in the performance review, classifies employees into low potentials working at full potential and not expected to improve; moderate potentials with the potential to improve expertise or performance; and high potentials eligible for promotion immediately or very soon.
• Combine the two: The final step, plots performance and potential on a 3x3 grid, resulting in the 9-box grid.

Are you Low or High on Performance and Potential?

What gives the 9-box grid its power is its effectiveness and simplicity. It requires clear, transparent communication but provides excellent results when this is in place and other aspects of the performance review are properly assessed. The most valuable position to be in is the top right – the highest rank in both performance and potential. Conversely, the bottom right – the lowest performance and potential – is the least desirable.

Below are the key attributes of employees placed in each of the nine boxes:

Creating a 9-box grid kicks off much-needed constructive dialogue, further spurring discussion, development, and teamwork. Figuring out where each employee fits in the grid helps in succession planning and understanding where each employee must be in future organizational changes. Those in the upper right have bright prospects for succession; those in the bottom left may need reassignment or may find themselves on their way out.

The 9-Box Grid Shows where to make Investments.

The idea of the nine boxes is to indicate where HR needs to focus its succession planning efforts through investments in future leaders.

• The individuals categorized under ‘Future leader’ should be ready for top leadership roles within a timeline of six months to a year.
• Those tagged ‘Growth employee’, ‘Core employee’, and ‘High-impact performer’ require a longer planning horizon but can surely be groomed to eventually move to the ‘Future leader’ category.

This makes great sense from a strategic perspective and in planning resource allocation. A business would want to invest in employees who provide the largest return and aid in creating the biggest competitive advantage. Investing instead in a bad hire would take away scarce resources from top performers.

What are the Upsides of the 9-Box Grid?

The grid has several benefits to offer when it comes to the recruitment and selection process. The key upsides are:

• Easy to use: simple to create and iterate
• Encourages dialogue: serves as a framework for talent management discussions and offers transparency on the state of talent
• Offers consistency in evaluation: allows consistent and fair analysis
• Gives a fresh perspective: offers an objective assessment of performance and potential
• Exposes gaps: indicates the need for more extensive training initiatives
• Helps in planning: offers value through better succession planning and career development for employees

There are Aspects to be Cautious about.

Assessing potential is no easy task, making it hard to accurately position employees in the grid and execute succession plans accordingly. Here are other areas of caution:

• Validity of measuring potential: this is considered closely related to performance, as a low potential is not highly likely to be a strong performer.
• Employee labeling: categorization could bring in labels hard to unstick.
• Subjective perspectives: decisions when managing people are likely to be subjective as they are grounded in different backgrounds.
• High performance vs managerial success: the two are not always connected – not all individual contributors will be great in management roles.

To Sum It Up…

The 9-box grid remains an effective talent management tool to encourage discussion around the performance and potential of the workforce and facilitate the achievement of organizational goals. Clear discussion and definition are essential for the grid to be used fluently. It remains vital to establish the outcomes sought from the exercise before starting it and to act on the discussion so that the grid does not just become an exercise in futility!

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