DC school, at least in Y3, lists targets on the wall like OP suggests (qualitatively, like "Write sentences with adjectives" or whatever). With children's names under who can do what...
I've not sensed a problem with it. It's true what cazzybabs says, by Y3 the children have a pretty strong sense about who is strong academically & who isn't (and they still choose their friends from all other ability groups, anyway).
The children also do tests and get told the results (within each group that was set those problems) which sometimes means DS comes home and says "I got 3a, but Jack got 4c" (DS purses face, as if he's thinking, must beat Jack, must beat Jack, etc.) Some children do respond well to competition, ds is def. like that.
DD's Y1 class doesn't have the same wall listings (I think not, anyway), maybe it's a KS2 thing at our school.
My gut feeling from observation (so, very imho) is that most of the children who are weak academically either have bigger problems (at home, or SEN, especially unaddressed SEN, or they aren't really trying -- we have one of DS's very laid back mates visiting today, actually, I'm sure he could attain more academically if he wanted). Maybe it's wrong to list names against target achievement because it's demoralising to some of the low-achievers, but their main problems I think tend to be other stuff, anyway.