How to perform a talent review in 2026 [in 5 simple steps]

As businesses grow, evolve, and adapt to the changes in their environments, one factor remains constant across all growth – that is, having the right people in the right roles. That’s where talent reviews come in. 

Knowing how to conduct effective talent reviews can make all the difference. Not only does it ensure you’re nurturing the right talent, but it also helps you align your team with business goals, drive growth, and build a leadership pipeline for the future.

According to a Gallup study, companies that focus on developing employees with high potential saw a 25% increase in employee engagement and performance over time.

This blog sets out the necessary elements for an effective talent review process – and why this can be such an important tool – to ensure smooth execution.

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What is a talent review?

A talent review is a process where an organization evaluates its employees based on performance and potential. 

This review looks at not only what employees have achieved so far but also their ability to grow and take on future responsibilities. The goal is to identify key talent, assess gaps in skill sets, and ensure the right people are being developed for leadership positions.

This process tends to be composed of a variety of performance assessment processes, feedback given through a 360-degree rating, and other discussions about potential work in potentially significant roles in the future. Such a tool is powerful in strategic workforce planning, keeping talent matching a company’s dynamically changing requirements.

Quick fact: According to a McKinsey report, companies that conduct regular talent reviews are 1.5 times more likely to have a strong leadership pipeline than those that don’t. This shows just how important it is to stay proactive in identifying and developing talent.

Why to conduct a talent review?

Talent reviews are more than an exercise in performance evaluation; they are a strategic component of workforce management. Here is why they matter:

1. Identifying high performers and future leaders

Talent reviews help identify those individuals who consistently excel in their roles and show leadership potential. You can focus on nurturing your best and brightest to prepare them for future leadership roles by assessing employees’ performance and their readiness for greater responsibility.

A Gallup study found that organizations with strong talent management processes experience a 14% increase in employee engagement and a 16% increase in overall performance. The first step to realizing these benefits is identifying high performers.

2. Succession planning

One of the biggest challenges for any organization is ensuring a smooth leadership transition when key players leave. Talent reviews allow HR teams to identify potential successors for crucial roles. This forward-thinking process helps organizations avoid leadership gaps and ensure business continuity.

3. Aligning talent with organizational goals

In today’s fast-changing business world, companies must be agile. Talent reviews allow HR teams and managers to assess whether the right people are in the right roles, ensuring that the workforce is aligned with both short-term needs and long-term goals.

4. Employee development

Companies that invest in employee development see a 34% higher retention rate. When employees feel supported in their professional growth, they’re more likely to stay.

Effective talent reviews give insights into where employees can improve, ensuring they are on the right path for career progression. It also highlights skills gaps that can be addressed through training and development, giving employees the opportunity to grow within the organization.

5. Improving retention

Retention of most organizations is their biggest problem. However, talent reviews help create an environment in which employees feel valued and seen. Employees are more likely to be retained long-term if they know that their performance is regularly evaluated and development opportunities are offered.

Talent review frameworks

Probably the most important component in conducting talent reviews is the selection of the right framework with which to assess your employees. A structured framework can bring coherence, objectivity, and clarity to the review process; failure to do so leaves evaluations subjective, leading to inconsistent decision-making in the process.

There are several talent review frameworks commonly used by HR professionals. Below, we explore some of the most effective and widely adopted models.

1. Perfrmance vs. potential matrix

The most common talent review framework that people use today is the Performance vs. Potential Matrix. According to this matrix, there are four types of employees with two criteria as their basis-actual performance now and future potential.

• High performers, high potential: These employees are not only performing well but also show potential for taking on more responsibility in the future. These are the “golden employees” who should be nurtured and developed for leadership roles.
• High performers, low potential: While these employees consistently perform well, they may not have the capacity to grow further in terms of responsibility or leadership. These employees are critical to maintain business operations and productivity but may need to be evaluated for how to best utilize their skills.
• Low performers, high potential: These individuals may not be performing at their best at the moment, but they have the potential to grow into future leaders. They need development, mentorship, and training to improve their current performance and achieve their potential.
• Low performers, low potential: These employees are not performing well and lack the potential for growth within the organization. These individuals may need to be managed out or redeployed based on their skill set.

2. 9-box grid

The 9-box grid is another commonly used framework where organizations can review their talent pool based on two dimensions: performance and potential. 

A survey by Cloverpop found that using a 9-box grid for talent reviews improves talent decision-making by 50%, helping HR teams identify and develop future leaders.

The grid is made up of nine boxes, with each box representing a different level of performance and potential.

• The 9-box grid is often divided into three categories for each dimension: low, moderate, and high.
• The employees are then placed within the grid according to their current performance (how well they do in their role) and potential (how capable they are of taking on additional responsibilities or leadership roles in the future).

This grid provides a clear, visual representation of where each employee stands, making it easier to assess talent across the organization.

How the 9-box grid works:

1. Performance: High, Medium, Low
2. Potential: High, Medium, Low

The result is a matrix where employees can be grouped into one of nine boxes based on their individual ratings for performance and potential.

3. 360-degree feedback model

A 360-degree model typically involves a comprehensive feedback structure where employees may seek input from their managers, peers, subordinates, and sometimes even other external stakeholders such as clients.

Studies, however, indicate that when a leader has positive 360-degree feedback from his or her members, they have a 20% higher rate of performance improvement compared to those who do not. In this manner, performance can be evaluated in a wholistic perspective.

• Strengths: This model helps reveal employees’ interpersonal and leadership skills, which are often difficult to assess through traditional performance reviews.
• Weaknesses: It can be time-consuming, and the feedback might be influenced by biases or office politics.

360-degree feedback is especially useful when you’re evaluating an employee’s potential to move into a leadership or management role.

The talent review process

The talent review process doesn’t have to be a chore, though it does require planning. Here is the general step-by-step approach to the process:

Step 1: Preparation

In the initial step of a talent review, data must be collected. It may range from performance appraisals, 360-degree feedback from both peers and managers, skills assessments, and all relevant metrics showing the performance of an employee. It’s all about objective data.

Prepare by aligning the review with your company’s strategic objectives. Are there certain skills your business will need to thrive in the next few years? Ensuring your talent review process reflects these needs is key.

68% of HR professionals say that aligning talent reviews with business objectives is critical for success, according to LinkedIn’s Global Talent Trends report.

Step 2: Assessing talent

Once all the data is collected, the next step is to assess talent. This is where the rubber meets the road. To make the process more manageable, many organizations use frameworks such as the Performance vs. Potential Matrix or the 9-Box Grid.

The Performance vs. Potential Matrix divides employees into four categories:

• High performers, high potential
• High performers, low potential
• Low performers, high potential
• Low performers, low potential

The 9-Box Grid takes it one step further in ranking employees based on performance and potential in a matrix. This provides a more granular assessment.

According to a Deloitte survey, 85% of talent management leaders reported using a formal framework like the 9-box grid in assessing employees as part of the talent review process. This also ensures consistency across the process.

Step 3: Development plans

Based on the performance and potential, development plans should be formulated for each employee. The best performers with great potential require programs of leadership development or mentoring. Others require further training in certain skills to be effective in their positions.

It’s important to remember that development plans should be individualized. No two employees are the same, and their growth paths will vary depending on their unique needs, strengths, and career aspirations.

Step 4: Succession planning

It helps identify potential successors for key organizational roles. It is important to know who the right candidate is, with the ideal mix of the right skills and experience, alongside the leadership qualities needed to step in when required. This way, organizations can foresee the future well in advance.

Succession planning is critical in leadership roles. A 2023 PwC report found that 63% of companies are concerned about their ability to develop future leaders. Talent reviews play a critical role in addressing this concern.

Step 5: Follow-up and monitoring

A talent review should not be a one-time event. Instead, regular follow-ups are needed to track employees’ development plans. These will ensure that support is given appropriately to employees and that the organization is adapting in case of a change in the needs of those employees.

Talent review best practices and tips

The process of talent review can be really beneficial, but there are a few best practices that need to be followed so that the entire process is efficient.

1. Involve key stakeholders

Including broad stakeholder representation within the review process- such as senior leaders, managers, and HR professionals-reinforces that the evaluation of talent is indeed much more inclusive. It also means that the outcomes are better shared among the managers, hence making talent development a collective effort.

A Gartner study discovered that having a combination of senior and middle managers in the talent reviews has been linked to improved decision-making and more substantial development plans.

2. Ensure objectivity

Bias creeps into talent review if caution is not exercised. The most effective way of reducing this is the use of data and evidence-based assessments. Motivate managers not to rely much on gut feelings or subjective judgments about employees.

3. Be transparent

Transparency is very important. Workers should know the assessment criteria used, what criteria are being met, and their expectations for developing themselves. As long as they believe in the process, workers will be better engaged with the process.

4. Provide constructive feedback

After the review, the most important thing is to give employees constructive feedback. It’s not only that employees are told what they have done wrong. It’s more about showing them the way to correct their flaws. The time is appropriate for clear expectations of growth and development.

5. Regular check-ins

Talent reviews should be done continuously, not as a one-time activity. Regular check-ins with employees regarding their progress will keep them on track toward achieving their goals, and you can adjust development plans accordingly.

Talent review questions

While frameworks and data are critical, the questions asked during talent reviews play an equally important role. Asking the right questions can lead to deeper insights into an employee’s performance, potential, and developmental needs. Below are some key questions that can help you conduct an effective talent review.

1. Performance

• What are the employee’s key accomplishments over the last year?
• How does this employee contribute to team or organizational success?
• What specific skills has this employee demonstrated that set them apart?
• What challenges has the employee faced, and how have they handled them?
• How do they approach problem-solving or decision-making within their role?

2. Potential

• What leadership skills has this employee demonstrated?
• Does this employee have the desire and capability to take on more responsibility in the future?
• Is the employee adaptable to changes in the work environment or organizational needs?
• How well does the employee work with others and inspire team collaboration?
• Does the employee show initiative to learn new skills and grow in their career?

3. Fit and alignment

• Does this employee align with the company’s core values and culture?
• How does this employee contribute to the company’s strategic goals and vision?
• Is the employee open to feedback and willing to adapt their approach based on the company’s changing needs?
• How does this employee’s role align with long-term organizational priorities?

4. Development and growth

• What skills does this employee need to develop to advance to the next level?
• What training, mentoring, or development opportunities could help this employee improve performance?
• Does this employee express interest in a different role or function within the company?
• What are the most significant obstacles preventing the employee from performing at their highest potential?
• What additional support (resources, coaching, mentoring) does this employee need to reach their goals?

5. Succession and leadership questions

• What roles within the organization could this employee step into in the future?
• Does the employee have the leadership qualities necessary to succeed in higher-level roles?
• What would need to change for this employee to be ready for a leadership role?
• What leadership experiences or projects could help this employee grow?
• Is there a risk of losing this employee to another organization, and what steps can be taken to retain them?

6. Feedback and engagement questions

• How do you feel about your current role and responsibilities?
• What areas of your work do you find most fulfilling, and where would you like to see growth?
• What challenges do you face in achieving your career goals, and how can the organization help?
• Are you satisfied with the feedback and recognition you’re receiving?
• What do you think could be improved in the way your performance is evaluated?

Conclusion

Talent reviews have been one of the most powerful tools in building a strong and high-performing workforce in HR. Organizations have the opportunity to identify future leaders, plan succession, and ensure that talent aligns with business goals through conducting regular, rigorous reviews. A proper approach with talent reviews brings about a potent means of boosting employee engagement and retention while helping your organization have the right people at the right places to succeed in the future.

By following these strategies and building best practices into your process, you can leverage the value that talent reviews deliver to your employees and your organization. Talent reviews are not merely performance evaluations-they are also setting your people up for success and helping your business thrive.

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Yashika Khandelwal

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Content Writer

Yashika Khandelwal is a Content Writer with 3+ years of experience creating research-backed content on hiring, talent assessment, and HR technology. She is a registered Organizational Psychologist and subject matter expert who combines behavioral science with practical recruitment insights to produce accurate, evidence-based content.