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Employee is a key element of the organization. The success or failure of the organization depends on employee performance. Therefore, organizations are investing huge amount of money on employee development. This paper analyzes the theoretical framework & models related to employee development and its affect on employee performance. The key variables identifies related to employee development and Employee performance. The further discussion develops a proposed model which explains the relationship between employee development variables (employee learning, skill growth, self directed, employee attitude) and employee performance variable. The employee performance will affect on organizational effectiveness. The paper is divided into three parts. The introductory part provides brief overview related to employee development and its affect on employee performance. The second part analyzes the views and studies of the past researchers related to employee development and employee performance. In the end, paper presents the proposed model along with the discussion and conclusion.