Performance vs. Development Goals: How They Differ And How to Empower Your Workforce with Both

Are you looking to boost employee satisfaction and drive performance in your organization?

The answer may lie in balancing the right mix of performance and development goals. 

By setting professional growth and results expectations, you can empower your workforce to reach new heights and drive your company forward. 

While performance goals let you measure employee performance against work quality and quantity expectations, development goals focus on helping your employees grow and develop new skills and abilities. 

Naturally, both types of goals are important to have—but they serve different purposes.

This guide will dig deeper into performance goals vs. development goals. Read on as we separate the differences and uncover the similarities to help you make the most of both and lay the foundation for continued success.

🎯 Why is goal setting important for employers?

Realistic and clear goal-setting is a vital tool to assess organizational progress and clarify direction.

Goal-setting: 

• Makes an organization, as a whole, more effective in guiding employee performance and evaluating results. 
• Keeps everyone on the same page and ensures they know exactly what they're working towards and why.

Aligns employees to organizational goals

One of the more crucial aspects of performance and development goal-setting is to align employees to company goals and ambitions.

Employees are unlikely to be motivated and engaged if they don't know their role in the company's success. 

But if they understand the big picture, they often work proactively to achieve goals that result in success for both the business and themselves.

The fact that it also creates accountability, helping employees recognize how their performance directly impacts the company's success, is another advantage.

💡 Learn the 14 steps to ensure employees align with your organizational goals.

Improved employee motivation

Low staff morale can send employee productivity and quality of work on a downward spiral. To avoid discontent, you need to make your employees feel valued.

Luckily, goal-setting can help boost employee motivation while powering your business toward success.

Short-term and long-term performance and development goals motivate employees to show up and do their best daily. It makes them more positive and invested in their job. And when employees achieve these goals and milestones, it builds their confidence and satisfaction, contributing to a more positive working environment.

Higher team productivity

58% of tech professionals agree that having clear goals and expectations contributes to higher productivity.

This data makes sense, as goal-setting provides employees with a sense of purpose and direction. Plus, it tells them what they need to do to achieve the desired result, which makes them more productive and proactive.

How? 

Employees become keener to strive for success when they know how their work benefits the company. 

Tip: Give them the appropriate recognition for each goal and success, and you'll invoke a greater hunger within them to achieve more.

Increased job satisfaction

Another crucial advantage of effective goal-setting is an increase in employee job satisfaction.

Each employee wants to feel important in the grand scheme of organizational things. Transparency in planning goals and objectives, where you clearly define goals for each employee and how it links to your business's overall strategic direction, ensures employees feel a sense of fulfillment, recognition, and job security.

The result? 

Increased job satisfaction, which contributes to higher morale. It also promotes collaboration, as employees better understand how valuable teamwork is to achieve the set goals.

Enables faster organizational growth

The 2022 State of High Performing Teams report found a direct relationship between employees knowing company goals and their company's growth.

Here's what the report established:

• Employees who don't know their goals are 3x more likely to work at companies with shrinking revenues than those who know what's expected of them.
• Employees working at shrinking companies are 2x more likely to have unclear work expectations.

So clear-cut goals and expectations positively impact an employee's productivity and motivation and align them with the big-picture goals of their company. 

It builds high-performance teams that ultimately facilitate a company's growth and success.

🆚 Performance goals vs. development goals: Differences and similarities

Performance and development are the two main types of goals for any organization's employees. 

Ultimately, both are complementary to each other—but they have different focuses and purposes.

Here are the key differences between performance goals and development goals.

Focus

• Performance goals often target achieving specific and measurable outcomes. As a result, they are instrumental in evaluating your employee's current level of performance.
• Development goals target acquiring new abilities, skills, and knowledge to facilitate an employee's personal and professional development.

Duration

• Performance goals are short-term goals used to measure progress and ensure repeatable improvements over time.
• Development goals are long-term goals that focus on achieving a desired outcome.

Benefits

• Performance goals enable employees to contribute to their team's and the company's success.
• Development goals focus on the individual level, helping employees achieve their aspirations. However, these often align with the organization's ultimate goals.

Establishment

• Organization or team leaders generally establish performance goals for their employees.
• Employees set development goals, usually with their manager's help, to gain the skills and competencies required to succeed at their job.

🏆 Discover 11 best practices for setting performance goals in your organization. 

However, certain similarities help an organization achieve success. 

These include:

• Both require a crystal-clear understanding of what needs to be achieved and a well-drafted plan for how to achieve it.
• Both goals involve you having to regularly evaluate and track progress to ensure employees are working in the right direction; and, if not, to make the required adjustments.
• Both goals help motivate employees and focus efforts toward achieving specific outcomes designed to succeed in an employee's personal and professional life.

While performance goals help you clarify what you want to achieve, development goals help outline how to achieve these goals. In other words, your employees must work on the development goals to gain the necessary capabilities to help them accomplish their performance goals.

We know that was a lot to take in. 

So, here's a quick summary of all the differences and similarities.

💪 Wondering how you can help employees set development goals? Check out our comprehensive guide.

🔍 Performance goals vs. development goals examples

Performance goal examples

Increase sales: Achieve the goal of increasing sales and growing company revenue by having employees execute tasks such as:

• Identifying 20 new sales opportunities each month.
• Developing new marketing strategies based on current trends.
• Learning how to use the new CRM software.

Increase website traffic: Improve the visibility and popularity of the company website by having employees complete tasks such as:

• Optimizing existing web content for search engines.
• Running online paid advertising campaigns.
• Creating 5-8 pieces of engaging content.

Improve customer satisfaction: Enhance customer satisfaction to foster customer loyalty and repeat business by having employees perform tasks such as

• Asking for customer feedback.
• Identifying customer pain points and implementing improvements.
• Conducting customer surveys to track progress.

📈 Check out 35 more employee performance goals examples.

Development goal examples

Earn a degree or certification: Support employees in obtaining a degree or certificate to acquire specialized knowledge and skills in a particular field. This development goal can be achieved by:

• Identifying the desired field of study
• Investigating and choosing a program
• Dedicating to a schedule of classes and studying

Develop leadership skills: Improve your manager's capability to lead and motivate teams. This development goal can be achieved by: 

• Attending leadership workshops and seminars
• Reading books on leadership
• Seeking out leadership opportunities within the organization

Improve public speaking skills: Make your employees more confident and effective when presenting ideas to clients. This development goal can be achieved by: 

• Joining a public speaking group
• Taking public speaking classes
• Participating in a mentor program

🌱 Check out 14 more developmental goal examples.

Leadership-specific goal examples

Meet project deadlines: Ensuring members complete projects on time is a common performance goal for team leaders. This can be achieved by:

• Creating a project plan
• Setting realistic time frames 
• Holding meetings to track progress and resolve potential issues

Improve communication skills: An effective development goal for a leader is to enhance their communication abilities to ensure the team understands what's expected of them. This can be achieved by:

• Participating in workshops to learn effective communication techniques
• Practicing active listening
• Providing regular feedback to team members

💼 Discover ten more leadership SMART goal examples.

➡️ Grow your people and drive performance with Zavvy

Are you ready to take your company's success to the next level? 

It all starts with your employees' abilities and performance. The good news is that Zavvy can help you build a team of motivated and skilled individuals working toward a common goal. 

Get access to a range of tools and resources that can assist you in creating and managing goals, tracking progress, and measuring results. With Zavvy, you get: 

• 🧰 Skills matrix to identify employee strengths and development opportunities.
• 🌱 Employee development tool to align employees and people managers and build targeted development plans.
• 🔁 360 feedback system to inspire action and targeted growth
• 🧭 Ready-to-use templates to facilitate feedback and performance, as well as onboarding & training.

See how it all works in a free 30 minutes demo.