Companies scoring in the top quintile of talent-management practices outperform their industry's mean return to shareholders by a remarkable 22 percentage points". Needless to say, it is the leaders in the organization (not just at the senior levels but also at mid management levels) who will have maximum impact on the future success or failure of the organization. Hence, a business strategy that fosters the growth of talented people and a culture the supports and eases people's stay in the company, especially those with leadership potential, is invaluable to businesses today.
This review of literature will discuss the theories and methodologies for the assessment of leadership potential among the employees of an organization and how this informs on the identification, development, career management and progression of future leaders within an organisation.
In order that businesses sustain and grow their profitability, there is a strongly felt need in organizations to identify and develop leadership potential from among its people. Given that the supply of talented staff is limited, capitalising on existing strengths is a sound way of dealing with this need. There are various theories that abound on leadership which explain as to what creates leaders. These theories can help in assessing whether an individual possesses leadership potential. ...
This theory was derived from the military and war background, and was followed by various other versions of what constituted leadership. These are discussed below.
The Traits Theory, explored by McCall and Lombardo (1983) suggested four primary traits that decide an individual's effectiveness as a leader. These were:
Emotional stability and composure
Ability to admit error
Good interpersonal skills
The Traits theory was based on the premise that people are born with certain characteristics that makes them effective leaders. Gardner (1989) who also supported the Traits theory suggested the following leadership attributes as essential to being a leader in any situation:
1. Physical vitality and stamina
2. Intelligence and action-oriented judgement
3. Eagerness to accept responsibility
4. Task competence
5. Understanding of followers and their needs
6. Skill in dealing with people
7. Need for achievement
8. Capacity to motivate people
9. Courage and resolution
Criticism against this theory is highlights that leadership skills are not a set of traits, but a pattern of motives (McClelland, 1975). McClelland (1975) points out that successful leaders tend to have a high need for power, a low need for affiliation, and a high level of what he called activity inhibition or self control. Peter Wright (1996) opposes Traits theory and comments that there was no difference "between leaders and followers with respect to these characteristics" and said that there were people who possessed these attributes and were even "less likely to become leaders"(p.34). The Traits theory was also