Stop Evaluating Developmental Goals in Performance Management
In most organizations, a teammate sets both performance goals - designed to measure whether an employee met business objectives, and developmental goals - designed to measure whether an employee is developing particular skills. And in many organizations, both are formally evaluated.
While this approach is well-intentioned, JST People Strategy would argue it is wrong. Performance goals and developmental goals serve fundamentally different purposes in your performance management process and there is significant danger in confusing the two. When they are measured in the same way, the result is often reduced clarity on performance and diminished effectiveness of development efforts.
Performance Goals Should Measure Outcomes
At their core, performance goals should translate organizational priorities into individual responsibility. In fact, individualized performance goals are one of the most powerful tools that an organization has to translate strategy into execution.
While there are a variety of criteria for strong performance goals, the baseline requirement is that they must answer a straightforward question: If these goals are achieved, will the organization be better at achieving its strategy?
This outcome orientation is central to what decades of goal-setting research have demonstrated. Dating back to Peter Drucker’s emphasis on management by objectives to current business leaders like John Doerr’s OKR methodology, organizations find that clearly cascaded goals improve performance by focusing attention and effort on what drives organizational results.
Development Goals Are Designed to Support Learning, not Evaluation
In contrast, development goals serve an entirely different purpose in an organization. They are intended to encourage capability building. When well-designed, developmental goals create targets that should develop an individual’s competency to better perform in their current role or be ready for the next role. Organizations invest in development goals to both improve how work gets done today and build the capabilities needed for tomorrow.
Evaluating Developmental Goals Reduces Clarity
When development goals are incorporated into evaluative performance appraisal processes, clarity erodes. This happens in two ways. First, development goals are typically focused on an individual’s skill-building, which is inherently longer-term and less directly tied to organizational outcomes. Second, this design leads managers to weight progress on an individual’s development plan on par with the individual’s achievement of their business results in their evaluation. Over time, this creates a material disconnect between how individual performance is evaluated and what the organization actually needs to achieve. Individuals may be assessed as successful based on development progress, even when business results fall short, effectively prioritizing growth for its own sake over the delivery of outcomes.
Evaluating Developmental Goals Perverts Development
When developmental goals are incorporated into formal evaluation, there are negative repercussions on learning for both teammate and managers.
This structure shifts a teammate’s approach to growth in significant ways:
Teammates may be less likely to surface true learning needs with their managers
Rather than selecting meaningful stretch areas, teammates will be more likely to choose goals that can be achieved
Teammates focus less on their own learning and more on documentation
As Amy Edmondson’s research on psychological safety suggests, individuals are less likely to engage in behaviors that could be perceived as risky when negative consequences are attached. When development goals are evaluated, that perceived risk increases and ultimately limits the depth and authenticity of growth.
And it also shifts managers’ approach to be focused more on evaluation, than the support and coaching role that they should be taking with their teammates’ learning goals.
Evaluate Performance; Monitor Development
A more effective approach is to maintain a clear distinction between performance and development within the overall Performance Management Processes. There are three ways to achieve this distinction:
Define the difference between “performance goals” and “development goals”: When you are training managers and teammates on your performance management process, ensure that you define and communicate the difference between performance and development goals, like the following:
Performance goals are tied to organizational outcomes and used to evaluate results
Development goals are used to guide growth and inform coaching conversations, without being formally rated
Separate the processes: To really drive home the difference in the two, it can be helpful to separate the processes both in terms of timeline and employee process. In a teammate’s performance appraisal documents, they should capture their performance goals. After goals are set, a manager then facilitates a process to reflect on what competencies a teammate may need to develop to meet these goals or grow into another role. These developmental goals are captured in a separate place or document and revisited during developmental coaching conversations regularly.
Clarify “why” and “what”: Some managers and teammates will say - “But, why do we have competency explanations in our performance appraisal process?” It’s important to clarify to employees that while “competencies” or “skills” can be used to explain WHY someone did or did not meet their performance goals, they should NOT be used to EVALUATE whether the employee did meet their goals.
Looking to Design Performance Management Processes
Organizations that conflate performance and development goals often struggle to distinguish between effort and impact. Performance ratings become less clearly tied to business outcomes, while development plans shift toward visible activity rather than meaningful capability-building.
If your organization is suffering from any of these symptoms, it’s time to take a close look at how you are treating your performance and development goals.