Name of Institution

Amity Business School

MBA –GEN, HR, EFT Sem-II
Human Resource Management
Name of Faculty
Dr. Preeti Yadav
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What is Potential ?

Potential can be defined as ‘a latent and

unrealised ability’. There are many people
who have the desire and potential to
advance through the job they are in,
wanting the opportunity to operate at a
higher level of competence in the same
type of work.

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POTENTIAL APPRAISAL

Qualities that exist Evaluation

and can be developed

• Beyond the Present Role.

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Objective of Potential Appraisal

Career Path

Help employees to move upwards in the

organization. People do not like to work on
dead end jobs. Hence, a career ladder with
clearly defined steps becomes an integral
component of human resources
management.
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Indicators of Potential
• A sense of reality: This is the extent to which a
person thinks and acts objectively, resisting
purely emotional pressures but pursuing realistic
projects with enthusiasm.

• Imagination: The ability to let the mind range

over a wide variety of possibility of action, going
beyond conventional approaches to situations
and not being confined to ‘This is the way it is
always being done!’ 5
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Indicators of Potential
 Power of analysis: The capacity to break down,
reformulate or transform a complicated situation into
manageable terms.
 Breadth of vision: The ability to examine a
problem in the context of a much broader
framework of reference; being able to detect,
within a specific situation, relationships with those
aspects which could be affecting the situation.

 Persuasiveness: The ability to sell ideas to other

people and gain a continuing commitment,
particularly when the individual is using personal
influence rather than ‘management authority’.
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Potential Appraisal at Maruti Udyog Ltd.

Part III of the Performance Appraisal form of Maruti Udyog Ltd.
solicits information to assess the future potential and ability of it
L8 and above categories of workers to assume a position of
Higher responsibility (L13)in the following format.

Group effectiveness (Maintaining and improving morale of group and

helping its identification with organisational objectives; optimal utilisation of
available manpower resources; directing and co-ordinating efforts an
effective follow up action to ensure accomplishment of planned objectives).

OUTSTANDING VERY GOOD GOOD STATISFACTORY UNSATIFACTORY

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Ability to develop subordinates (Sensitivity to develop

subordinate’s mental skills; ability to provide professional
guidance to produce group results)

Outstanding Very Good Good Satisfactory

Unsatisfactory
Potential Capability (Overall rating for managerial capability to head a
department based on your assessment related to the above two points)

Outstanding Very Good Good Satisfactory Unsatisfactory

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NEED FOR APPRAISAL & REWARD

SYSTEMS

 ATTRACTING & RETAINING BEST TALENT

 BOOSTING THE MORALE-MOTIVATIONAL TOOL

 CREATING COMPETITIVE ENVIRONMENT FOR

BETTER PERFORMANCE

 CREATE A HEALTHY ORGANISATIONAL

CULTURE

 IMPORTANT FOR SUSTENANCE OF FLATTER

STRUCTURES 9
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 Integral part of management development process and

career planning

 Subjective, non-quantitative approach

 Focus on future rather than past performance

 Essential for grooming future leaders

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BEST PRACTICES TO MEASURE

POTENTIAL

 Separation of reward for potential from

reward for past performance

 Evaluation and identification of past

performance

 Transparency of evaluation and appraisal

procedures

 Communication of potential assessment to

each individual at regular intervals 11