Actually, thanks to your message I was thinking about it today and realized that you are indeed right. You are right that one variable by position is not the right approach. I actually need 5 indicator variables (one for each position). Or I could just do one model per position, but that leaves no way to test for the significance of position.
As for regressing using current salary as a regressor, this again leaves potential as a y-variable. And in that case, if there are sub-levels on potential (ie: error), it still leads to a biased model.
Run of the Mill Canadian Manager