Performance Development Agreement Example

Performance Development Agreement Example: What You Need to Know

Effective employee performance is essential for the success of any business. To ensure that every employee performs at their best, it`s essential to use a performance development agreement. This document outlines the goals, objectives, and expectations of both the employee and the employer. In this article, we`ll discuss everything you need to know about a performance development agreement, including some examples to get you started.

What is a Performance Development Agreement?

A performance development agreement is a written agreement between the employer and the employee outlining the expectations, goals, and objectives that the employee must achieve to be successful in their role. The agreement is designed to create transparency between the employer and employee and to set clear expectations for performance, feedback, and development.

The agreement outlines the employee`s key performance indicators (KPIs), areas of development, and specific goals they need to achieve. It also includes a timeline for achieving these goals and a plan for how the employee can reach their targets.

Why is a Performance Development Agreement Important?

Creating a performance development agreement benefits both the employer and employee. Here are some of the reasons why it`s essential:

1. Creates Clarity: A performance development agreement eliminates any confusion by providing a clear outline of the expectations, goals, and objectives for the employee. This clarity is essential for the employee to understand what is expected of them.

2. Encourages Accountability: A performance development agreement helps employees to take responsibility for their performance and be accountable for their actions.

3. Improves Performance: By setting clear expectations and specific goals, employees will be more motivated to perform at a higher level, which can ultimately increase their productivity and improve the performance of the company.

4. Promotes Growth: A performance development agreement can help an employee to identify areas for improvement and create a plan for growth and development.

5. Increases Engagement: When employees know what is expected of them, they are more likely to be engaged in their work, which can improve their overall job satisfaction.

Performance Development Agreement Example

Here is a performance development agreement example to help you get started:

Employee Name: John Smith

Department: Sales

Position: Sales Manager

Evaluation Period: Six Months

Area of Improvement: Sales Performance

Performance Goal: Increase sales by 10% within six months.

Key Performance Indicator (KPI): The employee must meet a 10% sales growth target by the end of the six-month period.

Action Plan:

1. Create a daily sales plan to track progress.

2. Attend sales training to improve sales skills and techniques.

3. Develop and implement a sales incentive program.

4. Provide regular updates to the sales director on progress towards the target.


Month 1: Attend sales training and develop sales plan.

Month 2: Implement sales incentive program and start tracking progress.

Month 3: Provide an update on progress towards the sales goal.

Month 4: Review progress and make adjustments to the sales plan.

Month 5: Provide a mid-term progress update to the sales director.

Month 6: Achieve the sales growth target.


Creating a performance development agreement is a critical tool for ensuring employee success. It sets clear expectations and goals for your employees while promoting accountability and growth. Use our performance development agreement example to get started, and make sure to customize it to the needs of your employees and your business. With the right agreement in place, your employees will be motivated to perform at their best, which can ultimately lead to increased productivity and success for your business.