Individual goals

Myth: People need personal goals
Follow-up myths: Variable salary based on personal goals

Variations:

• Personal goals help people grow
• Personal progress reports
• Personal stretch goals
• Division goals

Category: Development team myths
Danger: High

The basis of the myth

Management by objectives is a common method of traditional management. In many organizations, this is propagated downwards in the organization. Every person receives certain goals, oftentimes tied to some salary proportion for attainment. While MbO is not bad in and by itself, it is merely a legacy process that may not be suitable for Scrum.

Why is it a myth?

It simply doesn't have a place in Scrum. This has nothing to do with Scrum and is exactly the opposite of Scrum's idea of "shared team accountability".

Assumption #1: Individual growth helps
Growing each person is good, but they should grow into a stronger team. Anything that a team member does which does not further the team's objectives is actually counter-productive. Do we really want team members to invest time and energy into that? If not, why would we want to give them goals forcing them to do exactly that?

Assumption #2: Tying goals to salary makes sense

When my goals are tied to my salary, I'm stupid if I don't negotiate for goals that are difficult to attain. People typically negotiate goals that they can reach without much of a stretch. These goals do not help anyone grow.
On the other hand, a goal that requires something worthwhile learning within the (usually long) time for which the goal is defined, contains so many Unknowns that only the most gullible people would voluntarily agree to have them tied to their salary.

Consequences

Mis-Alignment

The Scrum value "Commitment" clearly states that "People personally commit to achieving the goals of the Scrum team". As soon as the Scrum team does not have exactly the same goal as the individual, the person must choose whether to pursue their goal, or the team goal. By tying a financial component to the individual goal, the person is dis-incentivized to pursue the overall team goal.
It is impossible to give different people the same team goal, but differing individual goals. This will cause schizophrenic behaviour within the team. The result will ultimately be a bunch of individuals pursuing their personal goals rather than one team pursuing a common goal.

Missing Sprint goals

When a team member is forced to choose between investing time into furthering their own, financially relevant - and the team's mutual (not that directly relevant) goal, most people will choose to first secure their own finances. This may cause team members to diverge from the team goals, which (if the Product Owner is doing a good job) maximizes the financial impact to business.
It is never a smart idea to encourage people to optimize their own situation in disregard of the company success.

Remedies

Get rid of any kind of system rewarding or promoting behaviors that are inconsistent with teamwork or the team's goals. Focus on teamwork, team goals and synergies rather than individual contribution.
Encourage people to grow within their team rather than by themselves.
If you can't really go without a reward system (which has already been proven detrimential in knowledge work), reward and promote behaviours which benefit the team and the overall organization.

This may require overturning the roles of division managers and existing HR processes - but unless you do that, you will never attain a truly gelled team.