PosterID: 1049 Employers’ Experience in Managing High Potential Employees in Malaysia Nurita Juhdi, Fatimah Pa’wan, Ram Simranpreet Kaur Hansaram Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia Tel: , Fax: , IIUM Research, Invention and Innovation Exhibition 2013 Introduction The main objective of the survey was to study the practices in high potential (HIPO) employee development in Malaysia. HIPOs are the organization’s top performers in their current jobs and have the potential to move up to higher positions and more challenging responsibilities. This is where the value of human capital outweigh the other types of capital for growth. If identification of high potential employees is not conducted, the business world might end up in shortage of leaders in the near future. Identifying Potentials Schumacher (2009) lists several HIPO characteristics such as quick learners, risk takers, consistent high performers, have growth potentials and positive energy. Gritzmacher (1989) outlines nine characteristics that include independent, committed, time conscious and have high need for continuous improvement and creativity. In identifying talents and potential, organizations use various approaches such as performance appraisal, assessment centers, 360 degree feedback system and conducting psychological tests to assess communication skills, personality, interpersonal skills and decision making style (Noe, 2008). Other ways are also used like self assessment, reviewing the individual resumes (that include the career history, skills and developmental needs) and one-to-one interview to assess accomplishment, mistake and failures. Developing Potentials Formal education programs like executive Master’s in Business Administration (MBA) programs, seminars and in-house courses are normally used to provide employees with job specific skills (Stewart, 1991). However, according to Peters and Smith (1996), the formal education program has to be coupled with on-the-job experience that gives the high potential employees opportunities to feel and experience the challenges. Lombardo and Eichinger (2000) highly recommend that a development program should have 10 percent formal training, 20 percent component of coaching and mentoring and the biggest part should be hands-on (i.e. 70 percent). Hands-on experience can be taught to high potential employees by giving them opportunities to experience real work life challenges such as job rotation, job enlargement and assignment on special projects (Noe, 2008). Another common method used is action learning. Research Methodology The respondents of the study were in the positions of company CEOs, HR managers and line managers from various industries. All data were collected using survey forms. A total of two hundred and sixty forms were collected back but twenty three forms were poorly answered. As a result, only two hundred and thirty seven forms were useful for further analyses. Discussion of Findings The findings indicated that employers put highest emphasis on employees who were customer service oriented and able to create high performing teams. Given dynamic business environment that is always driven by high expectations from customers, companies need employees who are able to anticipate changes and be proactive in dealing with changing customers’ expectations. In terms of methods used to identify high potential employees in organizations, the most common method was performance appraisal by immediate superiors and the least common method was nomination method. Two most common methods to develop high potential employees were job enlargement and executive development programs and the least used was executive MBA program. The study also revealed that the most common problem in high potential employee development programs was in dealing with those who had problems in balancing personal and work life balance. Generally the respondents indicated their high potential employee development programs as effective. The findings also revealed that the effort in identifying high potential employees was consistent with the amount of development programs provided. Implications of the Findings It seems that managing high potential employees is becoming more challenging in Malaysia because almost half of the Malaysian population is made up of generation Y who perceive work-life balance as very important and they are willing to change organizations to expand their skills and experience (Salopek, 2000; Alch, 2000; Woodward, 2000). This generation will become the future leaders and managers. Employers have to design specific policies that would offer development programs and at the same time not neglecting the need to balance between personal and work lives. Nevertheless, there is no guarantee that well developed HIPOs are going to stay for long with the current employers if there are no other incentives like attractive compensation and job promotion. Employers must not overlook the psychological contracts concept where it refers to employees’ perceptions of what they owe to their employers and what their employers owe to them (Robinson, 1996). High potential employees may have their own expectation that they will move to the next position once they had gone through all trainings and development programs provided to them. Delay in promoting them to the next level will be one of the reasons for quitting.