HR Leaders, Are You Sure Your Employees Have the Right Goals?

Employee goals are a cornerstone of performance management, but individual goals must align with organizational priorities to be an effective performance management tool. Otherwise, employees may score well on their performance reviews even though their work doesn't support the business.

New SHRM research suggests that some organizations may simply be going through the motions of this important exercise.

Most HR professionals (94%) said employees at their organizations set individual goals, according to SHRM’s December 2025 Current Events Pulse. Yet, the same survey found that at more than a third of organizations (37%), organizational goals do not cascade down from senior leadership to inform individual goals, skipping a critical step in creating strategic alignment.

"Effective goal setting requires strategic precision," said SHRM CHRO Jim Link, SHRM-SCP. "Employee goals should reflect specific roles and competencies, but they must still support the organization. When senior leadership doesn't set the tone for goal conversations, they're leaving a great deal to chance."

Qualification: PMQ+

Who Manages the Managers?

In 92% of organizations, employees partner primarily with their managers to set individual goals, according to the SHRM survey.

This approach can have several strengths: A good people manager will have a clear understanding of the roles they lead. They will know their direct reports' strengths and weaknesses. Additionally, they'll have the rapport necessary to get employees to buy into ambitious goals.

But without clear objectives from senior leaders, employees may not set individual goals correctly.

"If employees aren’t clear on what leadership is prioritizing, they’ll often focus on pleasing their direct manager, since that person has the biggest impact on their performance reviews," Link said. "That dynamic can result in goals that miss the bigger picture, particularly if the business is in the middle of a strategic pivot."

Organizations may not always be able to tell if managers are encouraging the right goals.

At organizations where employees partner with their managers to set individual goals, just 61% of HR professionals said they encourage some form of goal documentation. Without proper documentation, there's no way to ensure managers are setting the right goals or that employees are following through on their commitments.

HR Q&A: Goal Setting Made Easier with AI

Evaluating Executive Priorities

When talent management executives were asked about their top performance management priorities for the next year, the most common response was feedback, chosen by 33% of respondents in SHRM's Talent Management Executives: Priorities and Perspectives report, followed by 32% who named performance metrics.

Just 17% of talent management executives identified goal setting as their top performance management priority, perhaps reflecting that most organizations are already setting performance goals.

In the same report, 20% of talent management executives said cascading organizational objectives to individual roles is an organizational challenge, with 7% naming it a top challenge.

But given that 37% of HR professionals surveyed in the December 2025 Current Events Pulse said this goal alignment isn't happening, this challenge may be more common than talent management leaders realize.

Next Steps for HR Leaders

Effective performance conversations begin with strategic individual goals that reflect organizational priorities.

A majority of companies are taking steps to ensure their employees are focusing on the right goals, but a significant minority are falling short in some capacity. The level of concern displayed by talent management executives could indicate that some organizations recognize they face challenges in this critical area.

"Performance management is a critical strategic function for any organization," Link said. While goal setting may appear straightforward, it serves as the foundation for every other stage of the process. HR leaders must empower managers to translate high-level strategic objectives into actionable individual goals, providing the necessary support to refine and document these benchmarks across the entire organization."