Astute performance management is key to building a great team—but as you business owners out there probably know, it’s hard to get right. That’s because it requires managers to accurately evaluate intangible metrics, like an employee’s leadership potential and even their future performance.
Doing this for one employee, let alone an entire team, is daunting—especially as individuals can have differing opinions on what “good” or “great” looks like. The 9-box grid or model is a tool that aims to make this process not only streamlined but scalable.
In this article, we’ll cover what the 9-box model is, its advantages and shortcomings, and how to implement it within your performance management processes to jump start your organizational planning. Let’s get into it.
What is the 9-box grid? History and uses
The 9-box grid is a simple framework that plots an employee’s potential against their performance, grading both qualities as either “low,” “moderate,” or “high.” Managers can use the 9-box grid to identify prospective leaders as well as high and low performers within the company. The X-axis shows performance, informed by ongoing reviews, and the Y-axis represents the future with predictions of potential for managerial or leadership roles.
The original 9-box model was created by the management consulting firm McKinsey in the 1970s for its client, General Electric (GE). At the time, multi-business corporations were on the rise and in need of a way to prioritize investments and resources among their various business units. McKinsey took a page from Boston Consulting Group’s book, adapting BCG’s growth share matrix, which plots business units’ growth potential against their market share to optimize cash flow.
McKinsey adapted the framework to plot a business unit’s industry appeal against its competitive strength and expanded the matrix to nine boxes. It essentially scored a business venture by the attractiveness of the industry and the odds of the venture to dominate competitors. Business units falling in the upper-left diagonal half would be recommended corporate investments, while the lower diagonal half could indicate ventures that should be deprioritized or reallocated.
Cut to today, the 9-box model has been adapted yet again for human resources purposes to identify future company leaders and high performers. It can also be used to help spot talent development opportunities or weak links. Each box can be used to inform a cohesive team management and succession planning process. Let’s take a look at the grid in action next.
9-box grid template
The 9-box grid assigns employees one of the nine boxes based on their performance on the X-axis and their potential on the Y-axis. The grid should be informed by a detailed assessment of the team from feedback and performance reviews. Here’s an example of what the grid looks like when applied to performance management:
Let’s talk about what each box on the grid means from the bottom up, left column to right. Before we dive in, please note: The labels used here are simply examples of how you might quantify the performance-potential combination of the respective boxes—they are not the be-all, end-all definitions of your employees.
1. Low performer, low potential
Employees that fall into this bucket are associated with “Risk” for your business. That’s because in addition to not performing today, they also demonstrate little potential for future improvement. They may have already been put on a performance improvement plan and been unable to show measurable progress. In this case, you could consider further intervention or assess whether or not they are appropriate candidates for termination.
2. Low performer, moderate potential
This box is labeled the “Inconsistent Player,” i.e., while their performance has been lackluster, they do show potential for improvement. However, it may require more than a little investment of resources and support to get there.
3. Low performer, high potential
It’s possible for low performing employees to have the potential for much greater contribution with a slight change in circumstances. Interventions could include:
- A shift to another part of the business.
- A different position within their current team.
- Some additional support as they ramp into a demanding role.
Ultimately, these “Potential Gems” show promise of great returns with a little investment of time or resources.
4. Moderate performer, low potential
Here we have the grid’s “Average Performer,” indicating that their performance is more or less adequate, but they show little promise of further improvement or potential for leadership roles. In fact, they may already be operating at their greatest capacity.
5. Moderate performer, moderate potential
“Core Players” demonstrate both moderate performance AND potential. They can consistently meet expectations and have less obvious potential for leadership roles or greater responsibility. While they are reliable team members, they still have room to grow.
6. Moderate performer, high potential
With a slight increase in performance, these “High Potential” employees have nothing holding them back from an upward trajectory in the company. Work with them to identify their goals and motivators, and help them onto a rising path.
7. High performer, low potential
“Solid Performers” are reliable workers who you may assume are operating at the height of their abilities with little room for improvement. They are exceptional contributors but show little interest in additional responsibility or leadership.
8. High performer, moderate potential
“High Performers” show up in their roles, but one element may keep them from being ideal candidates for promotion and leadership. In these scenarios, it’s worth working with them to identify any gaps in their development and explore where they may need some coaching.
9. High performer, high potential
“Stars” need little explanation. With high performance and potential, you can be sure that these employees will become future leaders within your business with the proper nurturing. Retention and growth opportunities are key.
As you can see by these descriptions, there’s significant room for interpretation. Each factor—performance, potential, and what makes an employee fall into the low, moderate, or high categories—can be subject to individual opinions. This is why a careful and intentional approach is crucial with the 9-box model. More on that later.
Pros and cons of the 9-box model
You may already be able to see that the 9-box grid comes with both benefits and drawbacks. Let’s discuss them a little more specifically.
Pros
Fast and easy
This is why simple frameworks become the bread and butter of the business world. The 9-box grid is accessible and can be an easy system for teams to understand and implement. It also conveys performance information simply and visually, so that leaders across the business can get on the same page quickly and cut straight to planning next steps.
Consistency
The 9-box model is a solution to the problem we discussed earlier—the lack of consistent measurement for abstract performance indicators. This method requires that leadership and the company as a whole align on what low, moderate, and high performance and potential mean. Adopting the same language across the company can help set clearer expectations and reduce ambiguity in the evaluation and promotion process. The simple language can also allow leaders throughout the business to communicate about employees from different departments and disciplines with greater ease.
Planning oriented
One of the most important aspects of performance review is the plan of action for the future. Feedback is mainly useful when it is applied toward future behavior and goals—and the entirety of the 9-box grid is focused on future forecasting and letting you know where to invest your attention to capture benefits on the horizon.
Cons
Vulnerable to bias
Assigning simple labels doesn’t make the process of evaluating potential any less tricky. Favoritism and recency bias can significantly impact a manager’s assessment of an employee’s potential for leadership. Furthermore, once an employee has found themselves in a box of low or high potential, it may be hard for them to shake those associations in managers’ minds—regardless of how their performance and potential may evolve.
Imprecision
Even with a keen eye toward indicators, the 9-box grid can’t predict the future. According to Culture Amp, “A 2015 study on potential found that when companies tried to predict whether an employee would move two levels in five years, they were only accurate at identifying these high-potential individuals 52% of the time.” The Talent Strategy Group even warns against using potential models in human resources. The grid seeks to measure something that cannot be scientifically measured; it’s mainly your best guess regarding your employee’s success and trajectory at your company.
Cultural impact
Don’t underestimate how damaging it can be to assign employees terms like “average,” “star,” or “inconsistent.” Labels like these can easily overshadow real progress, positive qualities, or even underperformance. And these representations make their way to leadership, no less, meaning your company may be operating on seriously misguided metrics.
The labels can also send an undesirable message to your team. Employees may feel they cannot trust your performance process and that they will be stuck with managers’ (often bias-driven) perceptions of them. Particularly beware of how this can impact historically marginalized groups. For example, a 2022 study found that women often received lower potential ratings than men despite higher performance ratings.
Finally, demotivation and disengagement can result from this labeling system. Designating an employee as low potential may lead them to fall into the trap of a fixed mindset and diminish their productivity. Ideally, feedback would encourage a growth mindset, where employees believe they are capable of change and improvement and are motivated to reach new heights.
How to implement the 9-box model
We’ve covered some potential pitfalls of the 9-box model, but it can still be a useful tool within a larger, thoughtful performance management process. Here are the steps we’d recommend if you’d like to implement the 9-box grid:
- Rigorously evaluate performance. The 9-box method relies on careful performance assessment. To get an accurate sense of performance and potential, gather insights from recent projects, metrics, and peer feedback. Also work with your employee to understand their individual motivations and interest areas.
- Define potential for your company. What indicators will you look for in employees of high, moderate, or low potential? Beware of bias and think of concrete examples you may be able to share with managers.
- Fill out your grid. Based on performance reviews and your potential assessments, assign employees to their respective boxes on the grid. You can also customize the box labels to better reflect your company’s culture.
- Get on the same page. The 9-box grid can benefit from a rollout process to give your company leaders important context. This can include documentation about the process with specific guidance and definitions, as well as a meeting to introduce the grid to managers and address questions.
- Take action. Managers shouldn’t call it a day once the box is filled—it should be the jumping off point for next steps for each employee’s growth, whether that means a path to promotion, additional education, or coaching. And ensure that the grid doesn’t become a static document. Establish regular intervals to reevaluate the grid based on the latest performance reviews.
Alternatives to the 9-box model
If it doesn’t seem like the 9-box grid is a good fit for your performance processes, consider taking a page from Gusto’s playbook. Here are tools that we use at Gusto to empower employee growth:
- Self-reflections: Give your employees the opportunity to share their wins and where they think they have room to grow—plus what they are most excited about. This can be a great tool for identifying employees’ motivations and it can help set them on a path they are both aligned with and enthusiastic to pursue.
- 360° feedback: Get multiple angles of feedback for each employee. Ensure you get the perspective of peers, collaborators, mentors and mentees, as well as supervisors for each employee to truly understand what it’s like to work with them and how they are doing day-to-day.
- Calibration: Have managers share their evaluations of employees with each other to control for harsher or more lenient assessments that can obscure true gems or underperformance.
- Professional development plans: Make time for discussions outside of performance reviews that are dedicated to employees’ career aspirations, what skills they would like to develop, and help them formulate a plan to get there. This way you are maximizing each individual’s potential while building a path to leadership for employees with the interest and capacity to lead.
You can also check out these tips for sprucing up your performance reviews from real small business owners.
