People of three types of capacities

There are people with three types of capacities (Purusha in Sanskrit). The person of lowest capacity, the one of middling capacity and the one with the highest capacity. According to these capacities, Buddha gave different teachings suited to each, so as best to help them.

The person of the lowest capacity is one who only looks towards the benefit of this life or to seek a better rebirth in the next. For this purpose, the person does good deeds.

The person of the middling capacity is one who sees that Samsaric existence is suffering, and looks to liberate oneself from Samsara.

The person of the highest capacity is one who sees that Samsaric existence is suffering, sees that others are suffering as much as them and think that they should help to liberate all sentient beings besides liberating themselves.

As the person of the lowest capacity does everything for his/ her selfish purpose, any merits gained is quite little. But we should not look down on the person of the lowest capacity as they are still focussed on doing good deeds and eventually, with the merits they have accumulated, they might become more learned in Dharma in their subsequent lives and embark on the Theravada or Mahayana paths, eventually reaching enlightenment.

The person of the middling capacity belongs to the first two yanas, the Sravaka-yana and Pratyeka Buddha yana. They seek self-liberation. Sravaka refers to hearers, the disciples who gain liberation from listening to the Buddha's teachings. Pratyeka Buddhas are those who gained liberation through their own meditation practice. We commonly know the practitioners of these two yanas as Theravada practitioners. Theravada means "first step". The liberation that Theravada practitioners attain is Nirvana, the opposite of Samsara. It is however not the ultimate Nirvana (non-duality between Nirvana and Samsara) that will cause one to become a Buddha. The liberated Theravadan practitioner is called "Arhat" (foe-destroyer, they have destroyed all the gross negative defilements which are our enemies). Arhats however still have subtle defilements.

Arhats will eventually be able to become Buddhas, however it will take a rather long time.
There is an example of a ship lost at sea with various sailors on board. They are not able to find their real destination. To comfort the sailors, the captain brings them to an island for a while so that they can rest and energize themselves again before going out again to seek their real destination. Arhats are similarly at rest in Nirvana before the Buddha reminds them again that they still have a journey ahead towards ultimate enlightenment.

The practitioners of the highest capacity are the Mahayana practitioners. They are able to understand the profound teachings of the Buddha regarding the direct path towards enlightenment. There is a common misconception that Vajrayana is another yana separate from Mahayana, that is not true. Vajrayana is a subset of Mahayana which has the quickest path towards enlightenment as it stresses on exceptional skillful means.

Mahayana practitioners develop relative and ultimate Bodhicitta in their practice. Relative Bodhicitta is a requirement before one can gain enlightenment, which is the perfection of the five paramitas (generosity, patience, morality, diligence, meditative concentration). Ultimate Bodhicitta is the perfection of the sixth paramita (primordial wisdom).

Arhats also practise the six paramitas to a high standard, but there is something lacking, and that is the lack of understanding of the emptiness of phenomena. They only realize the emptiness of self but have fear of the emptiness of phenomena. So they have not completely perfected these six paramitas.

As becoming an Arhat is already something very great and difficult for normal people to attain, we should not look down on the Theravadan tradition or think little of it. Arhats also can become Buddhas eventually.