Hiring good people is tough. Retaining your best talent can be equally challenging. In today's disruptive world, competitive advantage relies as much on people as it does technology.

So, how do you objectively know which people are your all-stars, especially in a bigger organization? And not just the best talent today, but the best for the future?

Just as it's easier and cheaper to retain customers than to acquire new ones, the same goes for employees. Knowing who your current and future all-stars are helps you keep them and gives you the opportunity to help them grow into more strategic roles.

The 9-box talent grid categorizes your people into nine categories. The grid contains two axes, performance and potential, each of which includes three levels each: low, moderate, and high. When you match up the categories on the axes, you get nine boxes that become classifications.

Categorizing people helps reveal who's contributing the most now, and who will likely contribute the most in the future:

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Stars (High Potential, High Performance)

Consistently high performance with high potential. Will likely become part of the future leadership team.

High Potentials (High Potential, Moderate Performance)

Solid performance overall with high potential to grow. Will most likely advance in current or future roles and may become part of the future leadership team.

Enigmas (High Potential, Low Performance)

While high potential, challenges exist in performance that may require additional support or training and development.

High Performer (Moderate Potential, High Performance)

Consistently high performance with solid potential to advance in current role and future positions with the right opportunity.

Key Player (Moderate Potential, Moderate Performance)

Overall good performance and potential with additional support and opportunities to grow.

Inconsistent Player (Moderate Potential, Low Performance)

Low performance and moderate potential require additional support and training to validate growth opportunity.

Workhorses (Low Potential, High Performance)

Highly effective performance yet may have peaked in terms of potential so coaching or training may help elevate potential.

Backups (Low Potential, Moderate Performance)

Decent performance and an asset but may not become a more significant contributor.

Bad Hires (Low Potential, Low Performance)

Low performance coupled with low potential means re-evaluating overall role in organization.

The easiest way is to assign people to the categories is based on your experience working with them. Or, if you're in a larger organization, collect inputs from managers and aggregate the results.

Here's how it works: The CEO of an organization works with their HR director to collect inputs from managers within the sales department. Twenty-five sales representatives are mapped into the nine boxes. The results are used to provide additional incentives, identify people for leadership development programs, and promote individual reps to managers for new territories.

The 9-box grid provides a snapshot in time. Use the tool to continually assess and reassess your talent. You'll see some people move up and to the right while others may stay stagnant. Use these trends to help people grow. It won't improve just your organizational culture. It will also improve your business.