Performance, at the minimum, is about given skills and experience how effectively person accomplishes his or her goals. Whereas potential is about what person could do if the person could a) acquire skills b) gain access to more opportunities c) get mentoring. We all have seen under-performers who have more potential. In my experience, most of these people don’t opt to underperform but they are put in a difficult situation they can’t get out of. We routinely see managers not identifying this as a systemic organizational problem but instead shift blame to employees confusing potential for performance suggesting to them, “you could have done so much but you didn’t; you’re a slacker.” A similar employee with equal performance but less potential would not receive the same remarks on his/her performance.