How to Create an Employee Development Plan That Actually Works

If you’ve ever sat down to map out an employee’s growth plan, without having any actual data to go off, you may realize you’re relying more on instinct than insight. For many managers and HR leaders, development planning can feel like a guessing game with vague goals, outdated tools and little confidence that the plan will actually lead anywhere. Unfortunately, even the most talented employees can lose momentum or leave the company without a structured plan which is where this guide comes in.

We’ll walk you through how to build an employee development plan that’s clear and grounded in data. We’re looking at how to diagnose business needs with psychometrics while defining goals, choosing the right learning activities, and tracking impact.

What is an employee development plan?

An employee development plan is a structured framework that helps individuals grow in their roles by aligning their goals with the needs of the business. A good development plan can help to turn vague ambitions like ‘improve leadership skills’ into clear and trackable outcomes. Whether it’s preparing someone for a promotion or closing skill gaps, these plans give managers and employees a shared path forward with accountability on both sides.

Why development plans matter for performance and retention

According to Gallup, companies that have made a strategic investment in employee development report 11% greater profitability and are twice as likely to retain their employees.

This is likely because development plans can help reduce turnover by making people feel valued and aligned on a clear vision of where they’re heading. For any business, retention is important as turnover can be a costly situation regardless of the job role.

The lack of career growth opportunities, which would fall under development plans, are also a main driver in people changing jobs.

Who’s responsible for creating a development plan?

A development plan should be considered a team effort between decision makers, managers and employees. From a HR perspective, this department can sign off on useful tools and templates, while the manager and employee can be the ones to bring the plan to life.

Managers should guide the process and help shape realistic goals, while employees can focus on personal development and take ownership of their growth.

Common mistakes that undermine development plans

In order to get the best out of them, it’s important to not let a development plan go to waste or fail because of avoidable mistakes. This includes being too vague in the goal-planning process as items like ‘get better at communication’ doesn’t provide any actionable insight. Overloading the plan with the addition of too many goals is another sure fire way to lead to burnout, instead, focus on one to three priorities for each team member.

Above all, a one-size-fits-all approach should be avoided as everyone is individual and what works for one person may be terrible for another. Once the goals have been set, or a plan created, they shouldn’t be simply forgotten about after the meeting and regular check-ins or catch-ups should be scheduled.

When should you use an employee development plan?

There’s a common myth that development plans should only be used for high performers or future leaders. In reality, every employee benefits from a clear, structured growth plan especially when change or new opportunities are in play. If you’re waiting for an annual review or a promotion window to start planning development, you’re probably missing the moments when it matters most.

Key triggers for planning (promotions, gaps, growth)

Development planning makes the biggest impact when it's tied to clear business or personal triggers, here are five moments when hitting ‘go’ on a plan just makes sense:

• New role or promotion - They’ve taken on more responsibility, now help them level up.
• Skill gaps affecting performance - Spot the friction, then build around it.
• Career conversations - Use catch-up chats to create direction.
• Team restructure or growth - New shape leads to new expectations which everyone should be aware of.
• Succession planning - Prep your future leaders before you actually need them.

Benefits for employees, managers, and the business

When done well, development planning creates momentum across the board and helps everyone stay on the right track. For employees, they can see what opportunities they have ahead of them which can be incredibly motivating. At the same time, they’ll be aware that their managers are understanding where they’re at and their goals, while feeling seen and supported.

For the manager, it provides a greater focus on outputs and future performance because there’s less guesswork involved. It’s then the business that also benefits as the skills that have been built upon can be used in the future which could result in performance improving.

It’s a win-win situation for all involved, as when people know where they’re heading and how to get there, they’re more likely to stick around and deliver along the way.

One-off vs. ongoing development: What works best?

The old-school team development process was a short formal review which would happen annually and it would often be forgotten about soon after it finished. 

Today, the most effective teams take a continuous approach with development added into usual business life through assessments, regular check-ins, feedback loops and evolving priorities.

An ongoing development works best for teams as it’s the most flexible option which is necessary in the changing landscape of current business especially as 44% of workers’ core skills are expected to change within the next few years, according to a World Economic Forum report.

To stay agile, set structured plans quarterly or bi-annually and then revisit them monthly in 1:1s, these shouldn’t be stagnant though, but adjusted as the business and person grow.

How to build an employee development plan step by step

To prevent the feeling of overwhelm that can often occur when being faced with creating a new plan, we’ve put together a list of six steps to follow to create something genuinely useful.

Step 1: Define the role and business needs

Start by getting clear on what the role actually demands and what this could look like six to twelve months down the line. This doesn’t mean simply listing daily tasks, but understanding the role’s impact in the wider team and business context. 

Step 2: Use assessments to identify strengths and gaps

Once the role is mapped, the next step is understanding the person involved which is where psychometric assessments particularly shine as they give you a clearer picture of what someone brings to the table and where they might need support. 

At Thomas, for example, we often see how a well-timed assessment can uncover hidden leadership potential or surface the real reasons someone’s struggling.

Step 3: Set SMART development goals

The SMART formula is a good process to follow when setting goals, with this standing for specific, measurable, achievable, relevant and time-bound but you need to be as specific as possible during this stage.

For example, rather than saying ‘become more strategic,’ you should instead say something like ‘lead a strategic planning session for the team by the end of the quarter and invite feedback from the manager and peers.’ 

Step 4: Choose relevant learning and growth activities

Next, it comes down to deciding the ‘how’ which is where many plans can go off track as people default to a generic training course which doesn’t quite serve the right purpose. It’s important to remember that development isn’t one-size-fits-all and should be tailored to each person, this is where you need to think about what would work best for that person, whether that be shadowing a leader or gaining hands-on experience.

Step 5: Clarify responsibilities between manager and employee

Development in the workplace should be a shared effort between both the manager and the employee as it should be a collaborative approach. At this stage, you need to clearly spell out who owns which tasks and when check-ins will take place.

Step 6: Monitor progress and adapt as needed

Even the best development plan won’t go exactly as planned, which is just the reality of being in a busy workplace. That’s why it’s essential to treat development as a continuous process, rather than a one-time thing.

What types of employee development plans can you use?

Not all development plans are built for the same purpose which is a good thing as they should be tailored as much as possible to each individual. Trying to force every employee into the same growth track is a fast way to waste time and lose engagement. Instead, you need to choose a plan type that fits the person’s current role and potential.

Let’s look at the key formats you can use and when to use them.

Skill development

This is the most common and often the most straightforward plan as it focuses on helping an employee build a specific technical or soft skill. Whether a team member needs to sharpen their data analysis or improve how they present to clients, a skill-focused plan can help identify that gap and map out targeted activities to get there. The actions could include anything from focused training to coaching or taking on more projects in that area. 

When these plans are grounded in psychometric insight, you can avoid wasting time on strengths the employee already has and zero in on what actually needs to change.

Career progression

For employees with long-term potential or those asking about their career progression, working on career progression can help lay out the steps between their current role and a future one. This aspect should never be overlooked either as it can lead to retention of current employees. According to research from LinkedIn, 94% of employees say they would stay at a company longer if it simply invested in helping them learn.

Leadership development

For those who want to lead in the future, a clear plan can help them get to where they want to be and with the best foundation. If you use Thomas’s behavioral assessments here, you can pinpoint which leadership styles are natural for them and which areas they’ll need to grow into.

Performance improvement

Performance plans can sometimes get a bad reputation, as they can be seen as a negative but when done well, they’re developmental as they can be focused on helping someone close a gap and get back on track. This type of plan works best when it’s collaborative and transparent but it needs to be about setting someone up to succeed, rather than them feeling like you’re setting a trap.

Succession planning

Succession-focused development is all about readiness as these plans can prepare people for job roles they may step into later down the road, like in leadership or consulting roles. They often combine elements from the other plan types, but with a longer time horizon and more business context.

For teams managing growth, retirement transitions, or leadership turnover, these plans can be a really helpful safety net. With all of this in mind, it’s clear to see that building an effective employee development plan doesn’t require endless resources or time, but structure, insight and follow-through.

Bringing it all together: Development that drives real growth

When done right, this practice can be more of a checkbox exercise and something that can grow both the employees and the business. With psychometric assessments and clear frameworks in particular, you’re not just planning for the sake of it but actually helping people do their best work.

If you’re looking to utilize psychometric assessments to create an employee development plan that actually works, book a demo with Thomas to get the ball rolling.

FAQs about employee development plans