Managing High-potential Employees: Current Practices in Thirty-three U.S. Corporations

Based on a survey of 33 large, diverse US firms, a useful 3-stage conceptual framework is presented to help explain how high potential employees (HIPO) in many companies are trained and developed to advance to senior leadership positions. In the first stage, identification and selection, the firm creates a pool of top performers who then receive significant test experiences. The HIPOs who emerge from this process committed to the firm and ambitious enough to remain in competition progress to the 2nd stage, the development period. Here, they undergo more specific development, which includes planned job rotations, special assignments, and unique educational experiences. In the 3rd stage, succession, the top HIPOs are personally monitored by a high-level management review committee, often led by the chief executive officer. Plateauing was most common in middle-management when promotion opportunities declined and levels of management were trimmed. Drawbacks to this system are examined.