How can you tell if an employee is suited for a promotion to a completely different role’ Many companies are shifting to systems that assess not only past performance but also employees’ potential skills. While this seems like a positive step, a new study by economist Judith Künneke reveals that this approach often results in mismatched promotions, with employees frequently underperforming in their new roles.
Performance evaluations provide insights into how well someone has performed their job in the past, but they offer little indication of suitability for a different role requiring other skills. As a result, companies are increasingly focusing on assessing employees’ potential skills to determine whether they have the capacity to succeed in a new role.
Underperformance in new roles
In Judith Künneke’s study, this new evaluation system was thoroughly examined, and the findings were surprising: employees promoted based on this system performed worse in their new roles compared to those promoted under the traditional system. The research shows that assessing potential skills is not always a reliable predictor of success in a new role-despite this being the system’s primary goal.
Judith Künneke explains: ’The potential assessment system doesn’t always prove effective. Take, for instance, an excellent salesperson who breaks all sales records. Such an individual is quickly considered for promotion to sales manager. However, the core of that role is leading a team of salespeople-a completely different function requiring different skills. Often, the manager has barely observed this candidate in a leadership capacity. This forces managers to rely on sporadic observations to determine whether someone is ready for a leadership role. That’s a significant challenge, and research shows managers often struggle to assess this correctly.’
The evaluation skills of managers are crucial
Judith Künneke
The role of managers in quality evaluations
Where does it go wrong’ The evaluation skills of managers are crucial, says Künneke. Many managers prefer to give employees high ratings to avoid backlash and maintain positive working relationships.
However, in this and related research, Künneke demonstrates that accurate evaluations actually help employees identify their weaknesses, motivate them to design tailored development plans, and acquire the skills needed for their next role. Managers who prioritize evaluation accuracy and development goals are better equipped to cultivate the competencies their employees need and, as a result, select the right candidates for promotion.
Organizational obstacles also play a role, such as a lack of focus on evaluation quality. Often, organizations do not differentiate between the input of various managers, treating all’evaluations as equally informative. ’This can be problematic’, says Künneke. ’If less meticulous managers notice that their evaluations carry less weight in promotion decisions compared to those of more careful colleagues, it can further reduce their motivation to provide valuable feedback. This only exacerbates the problem.’
Making better choices
According to the researchers, strong support for managers is crucial to making better promotion decisions. This includes explaining the impact of (in)accurate evaluations and allowing sufficient time for careful preparation. Künneke concludes: ’In this time of labor shortages, recognizing talent is essential. Otherwise, it risks leaving the organization-a topic we are further investigating.’