How to make a development plan for an employee

Every ambitious employee asks the same question: "Where can I grow from here?" Yet most companies struggle to provide a clear answer, leaving talent feeling stuck and uninspired.

Creating an employee development plan solves this challenge - but not with generic training modules or annual reviews that gather dust. True development demands a strategic approach that transforms vague career aspirations into concrete growth opportunities.

Ready to turn potential into performance? We're breaking down the essential steps to build development plans that energize your team and drive business success. No corporate fluff - just practical strategies that work.

Let's create a roadmap that takes your employees from where they are to where they want to be.

Key takeaways

• An employee development plan aligns individual career goals with company objectives, fostering skill growth, engagement, and retention.
• Common types of development plans include learning stipends, performance improvement plans, leadership training, and career advancement programs.
• Effective development plans follow key steps, including skill assessment, SMART goal setting, tailored learning activities, and ongoing evaluation.
• Investing in employee development enhances productivity, innovation, leadership readiness, and job satisfaction, reducing turnover.
• Companies can offer learning stipends and tuition reimbursement through flexible benefits platforms like Forma, simplifying administration and boosting retention.
• Trusted by Honda, lululemon, and Tripadvisor, Forma streamlines career development benefits — <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a demo today</span> to elevate your workforce strategy!

What is an employee development plan?

An employee development plan outlines the path an individual employee needs to enhance their skills, knowledge, and performance within your organization. It aligns the employee's career aspirations with your company's objectives.

This collaborative action plan typically includes the employee's short-term and long-term professional goals, such as earning a certification, mastering new skills, or stepping into a higher role. It provides clear direction by highlighting career objectives and opportunities for employees to upskill.

Rather than generic training, there's a growing emphasis on honing the exact skills employees need to excel in their current roles and prepare for future ones. With a development plan, employees grow, and companies succeed — it's a win-win.

Common types of employee development plans

Employee development plans come in various forms, each serving a specific purpose depending on the employee's needs and goals. Here are some common types that employers need to know about:

1. Learning and development allowances

A crucial part of employee growth is ensuring they have access to ongoing learning opportunities tailored to their specific needs. Lifestyle Spending Accounts (LSAs) and Learning & Development allowances empower companies to provide flexible funding for professional growth.

Employees can use these accounts to enroll in courses, attend industry conferences, gain certifications, or purchase educational materials that support their career progression. Unlike traditional tuition reimbursement programs, LSAs give employees the autonomy to select learning opportunities that align with their personal career goals while reducing administrative burdens for HR teams. 

This flexibility enhances employee engagement and retention by demonstrating a company’s commitment to professional development in a way that adapts to each individual’s unique learning path.

2. Performance improvement plans

Performance improvement plans (PIPs) are designed to help employees who are struggling to meet job expectations by providing a structured path to enhance their skills and overall performance. These plans establish clear, measurable objectives, well-defined action steps, and specific timelines for progress. 

Rather than simply addressing underperformance with disciplinary measures, a well-structured PIP focuses on helping employees regain confidence and build the competencies needed to succeed in their roles.

An effective performance improvement plan begins with identifying specific performance gaps through evaluations and feedback. Once these areas are pinpointed, employees receive targeted support through coaching, additional training, or mentorship. 

3. Career advancement plans

Career advancement plans are designed for high-performing employees who are eager to grow within the organization. These plans map out a structured pathway for professional development, ensuring that employees have the resources and guidance needed to achieve their long-term career goals. 

Companies that invest in career advancement plans can retain top talent, boost employee engagement, and strengthen their internal leadership pipeline.

A strong career advancement plan begins by aligning an employee’s career aspirations with company objectives. From there, employees receive targeted training, enroll in relevant certification programs, or participate in specialized coursework. Mentorship from senior leaders provides additional guidance and insight while expanding job responsibilities. 

They can also help employees gain hands-on experience in preparation for future roles. By offering structured growth opportunities, businesses can develop a loyal workforce that feels supported and motivated to excel.

4. Leadership development plans

Leadership development plans focus on preparing employees for future leadership roles by enhancing their ability to think strategically, make informed decisions, and manage teams effectively. These plans are essential for organizations that want to cultivate strong leaders from within rather than relying on external hires.

Employees identified for leadership development participate in a combination of leadership training programs, executive coaching, and cross-functional projects that expose them to different aspects of the business. They are encouraged to take on decision-making responsibilities in real-world scenarios, helping them gain confidence and refine their leadership abilities. 

Through structured mentorship and hands-on learning, employees develop the skills needed to transition into managerial and executive roles, ensuring long-term business success.

5. Skill-specific development plans

For employees who need to acquire or refine specific skills to excel in their roles, skill-specific development plans provide a targeted approach to professional growth. These plans help employees develop technical expertise, improve soft skills, or gain industry-specific certifications, depending on their job requirements and career aspirations.

A skill-specific development plan begins with an assessment of current competencies to identify skill gaps. Employees then engage in training programs, attend industry workshops, or take online courses tailored to their needs. Other hands-on learning opportunities, such as job shadowing or project-based assignments, reinforce their knowledge and provide real-world experience. 

6. Succession planning

Succession planning is a proactive approach to identifying and developing employees who have the potential to step into key leadership positions in the future. Organizations that invest in succession planning ensure business continuity and minimize disruptions when high-level roles become vacant due to promotions, retirements, or unforeseen departures.

The process begins by identifying high-potential employees through performance reviews and leadership assessments. These employees are then given opportunities to work on strategic projects, take on greater responsibilities, and participate in leadership training. Exposure to different areas of the business helps them develop the well-rounded skills necessary for future leadership roles. 

How to create an effective employee development plan

Creating an effective employee development plan involves several key steps. Here’s what you need to know about a plan that supports your employees' growth and aligns with your organization's goals.

Step 1: Assess current skills and identify gaps

To create an effective employee development plan, start by assessing your employees' current skills. This helps you understand their strengths and areas for improvement. Here are some methods to access an employee’s current skillset.

• Conduct a thorough skill assessment: Conduct a skills assessment using tools like performance reviews, self-assessments, and 360-degree feedback. These assessments provide a comprehensive view of each employee's capabilities and potential.
• Discuss with managers: Gather feedback from managers and peers who work closely with the employee. They offer valuable insights into the employee's day-to-day performance, communication style, and teamwork abilities.
• Evaluate skill gaps: Identify areas where the employee needs to improve or acquire new skills to excel in their current role or prepare for future opportunities. Look for gaps between their current skill set and the requirements of their job or desired career path.
• Career goals: Consider the employee's career aspirations and how they align with your organization's goals. This helps you prioritize development areas that will benefit both the individual and the company.

Step 2: Set SMART goals

Once you've identified skill gaps and areas for improvement, collaborate with your employees to set clear, meaningful goals. Use the SMART framework to ensure their objectives are Specific, Measurable, Achievable, Relevant, and Time-bound.

Work with each employee to define goals that align with their career aspirations and your company's objectives. This alignment is key to creating a sense of purpose and motivation. Employees are more likely to engage with their development plan when they see how it contributes to their personal growth and the organization's success.

Break down long-term goals into smaller, manageable milestones. This approach makes the development journey less daunting and allows for regular check-ins and celebrations along the way. Milestones also provide opportunities to assess progress and make adjustments as needed.

When setting goals, consider both technical skills and soft skills. While technical expertise is important, don't overlook the value of communication, leadership, and problem-solving abilities. These transferable skills can have a significant impact on an employee's performance and career advancement.

Remember, SMART goals are not set in stone. As your business evolves and new opportunities arise, be open to revisiting and refining the objectives in your employee development plans. Regular communication and flexibility will ensure that the plans remain relevant and impactful.

Step 3: Determine development activities

Now that you have set SMART goals, the next step is to identify the activities that will help employees build the necessary skills and achieve their objectives. Development activities can take various forms, depending on the individual’s learning style and career goals. Training programs and workshops provide structured learning experiences focused on specific competencies. 

These can be conducted internally or externally and may include interactive sessions, case studies, and hands-on exercises. Mentoring and coaching allow employees to receive guidance from experienced professionals who can provide insights, feedback, and encouragement. 

Job shadowing and cross-functional projects offer employees the opportunity to gain firsthand experience in different roles, broadening their perspective and skill set. Online courses and certifications provide a flexible way for employees to expand their knowledge and credentials at their own pace. 

Attending conferences and industry events can expose employees to the latest trends, thought leaders, and networking opportunities. By offering a combination of these activities, organizations can cater to different learning preferences and ensure employees receive a well-rounded development experience.

Step 4: Allocate resources and support

Secure the necessary resources to bring your employee development plans to life. Allocate a budget for training programs, workshops, online courses, and other learning activities. Investing in your employees' growth demonstrates your commitment to their success and helps attract and retain top talent.

Provide dedicated time for learning during work hours. Encourage employees to block off time on their calendars for development activities, and respect this time as you would any other important meeting or deadline. This ensures that learning remains a priority and not an afterthought.

Consider offering flexible employee benefits that support professional growth, such as tuition reimbursement, conference attendance stipends, or subscriptions to online learning platforms. These benefits show your employees that you value their development and are willing to invest in their future.

Step 5: Evaluate and refine

As your employees progress through their development plans, take time to assess the impact of their learning activities on their performance. Use a combination of quantitative metrics and qualitative feedback to gauge the effectiveness of the plan.

Quantitative metrics may include improvements in productivity, sales figures, customer satisfaction scores, or other key performance indicators relevant to the employee's role. Track these metrics over time to identify trends and correlate them with specific development activities.

Qualitative feedback from the employee, their manager, and colleagues can provide valuable insights into how the development plan is influencing their work. Conduct regular surveys or interviews to gather this feedback and understand the employee's perspective on their growth and the support they receive.

Use the data and feedback collected to identify areas where the development plan is succeeding and where it may need improvement. Look for patterns across multiple employees to determine if certain activities or approaches are more effective than others.

Benefits of investing in employee development

A company’s success depends on the skills, knowledge, and engagement of its employees. Investing in employee development is not just about preparing workers for future roles — it’s about enhancing their current capabilities, improving workplace efficiency, and fostering innovation. 

When businesses prioritize employee growth, they create a workforce that is adaptable, motivated, and capable of driving long-term success.

Enhanced skills and increased productivity

One of the most immediate benefits of employee development is the acquisition of new skills that directly impact job performance. Training programs, workshops, and mentorship opportunities help employees stay updated with industry trends, master advanced tools, and refine problem-solving techniques. 

Employees who develop stronger technical and soft skills work more efficiently, make better decisions, and contribute higher-quality work, reducing errors and increasing overall productivity.

Greater innovation and adaptability

Employees who receive continuous development opportunities are more likely to bring fresh ideas and creative solutions to the table. As they learn new technologies, industry best practices, and advanced strategies, they can apply these insights to improve workflows, streamline operations, and develop innovative products or services. 

Additionally, trained employees are more adaptable to change, allowing businesses to respond effectively to market shifts, economic challenges, and evolving consumer demands.

Higher employee engagement and retention

When employees feel that their company is invested in their professional growth, they become more engaged and committed to their roles. Development programs give employees a sense of purpose and career progression, which reduces turnover rates and boosts job satisfaction. 

Companies that actively support career development create a culture of continuous learning, leading to stronger loyalty, increased motivation, and a more positive workplace environment.

Stronger leadership and internal promotion opportunities

Investing in employee development prepares high-potential workers for leadership roles within the company. Rather than relying on external hires, businesses can cultivate leadership from within, ensuring a smooth transition when key positions become available. 

Internal promotions lead to stronger team cohesion, better cultural alignment, and reduced hiring costs, making leadership development a valuable long-term investment.

Does your business need a development plan?

Yes, every business can benefit from a well-structured employee development plan. Investing in professional growth not only enhances employee skills but also boosts engagement, retention, and overall company performance. 

A strong development plan aligns individual aspirations with business objectives, creating a workforce that is more motivated, capable, and prepared for future challenges.

Implementing and managing development plans doesn’t have to be overwhelming. Forma’s flexible benefits platform makes it easy to support employee growth with learning stipends, tuition reimbursement, and career development funds — allowing employees to invest in education, certifications, and skill-building opportunities that align with their career goals. 

As a trusted third-party administrator (TPA), Forma handles compliance, claims processing, and program administration, ensuring seamless implementation without adding extra work for HR teams.

Companies like Honda, lululemon, and Tripadvisor trust Forma to provide personalized benefits that engage employees and drive long-term retention. Whether you want to expand your development programs or streamline existing benefits, Forma can help you design a strategy that works for your workforce. 

<span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">Schedule a demo today</span> to see how Forma can simplify your benefits administration while helping employees build meaningful, rewarding careers.

Employee development plans: Frequently asked questions

What is the difference between a performance improvement plan and a development plan?

A performance improvement plan (PIP) addresses specific deficiencies in an employee’s performance, outlining corrective actions within a set timeframe. A development plan, however, focuses on long-term career growth, skill-building, and preparing employees for future roles. While PIPs are corrective, development plans are proactive, supporting continuous learning and career advancement.

How often should employee development plans be reviewed and updated?

Employee development plans should be reviewed quarterly or biannually to ensure they align with evolving employee goals and business needs. Regular reviews allow adjustments based on progress, performance feedback, and industry trends. Frequent check-ins keep employees engaged, motivated, and on track, ensuring that development initiatives remain effective and beneficial for both individuals and the organization.

What are some best practices for implementing employee development plans?

Best practices include setting clear goals, providing access to training resources, and ensuring regular feedback from managers. Encouraging mentorship, skill-building opportunities, and continuous learning fosters long-term growth. Employees should have structured plans with measurable milestones, and businesses must actively support their progression to ensure development efforts contribute to overall company success and employee satisfaction.

How can managers support employee development efforts?

Managers can support development by providing guidance, offering feedback, and facilitating learning opportunities like training programs or mentorships. Regular career discussions help employees stay engaged and motivated. Encouraging stretch assignments and recognizing progress also strengthens commitment. A supportive manager fosters a growth-oriented culture, helping employees build skills and advance within the company.

What metrics can be used to measure the success of employee development initiatives?

Key metrics include skill acquisition, performance improvements, and employee satisfaction. Tracking participation in training programs, promotion rates, and retention levels can indicate effectiveness. Employee feedback and engagement surveys provide insights into whether development initiatives align with workforce needs, ensuring continuous improvement and long-term success for both employees and the organization.