What is Goal Cascading Employee Performance Goals and Management

Cas­cad­ing objec­tives down­wards rarely works in prac­tice, so instead, align objec­tives upwards. Here’s how to do it…

For employ­ees’ objec­tives to make a dif­fer­ence to the bot­tom-line per­for­mance of your organ­i­sa­tion, they need to be aligned to the organisation’s over­all strate­gic goals. Take the anal­o­gy of dri­ving a car. Let’s say your objec­tive is to dri­ve your car for 100 miles with­out stop­ping in less than 3 hours. You com­plete the jour­ney in a sin­gle stint in under 2 hours, so you have exceed­ed your objec­tive tar­get — great. But…you were not dri­ving in the right direc­tion. So whilst you tech­ni­cal­ly achieved your objec­tive, you didn’t actu­al­ly get to where you need­ed to go.

Strate­gic align­ment is about get­ting every­one mov­ing in the right direc­tion. An estab­lished way of achiev­ing this is through goal cas­cad­ing. The con­cept of cas­cad­ing objec­tives has been around for decades. How­ev­er, sim­ply because a giv­en per­for­mance man­age­ment tool has been around for a while, this doesn’t mean that it is still the best way of doing things.

But what exact­ly is goal cas­cad­ing, what are its innate flaws, and what would we replace it with?

What is goal cascading?

Goal cas­cad­ing, or objec­tive cas­cad­ing, relates to the process of com­mu­ni­cat­ing and assign­ing goals down­wards through the organ­i­sa­tion­al hier­ar­chy. The sys­tem starts with exec­u­tives, who define strate­gic per­for­mance goals in rela­tion to the organisation’s objec­tives. These goals are then cas­cad­ed down to the next lev­el of man­age­ment who set their objec­tives for their divi­sions against these. Goals con­tin­ue being cas­cad­ed down lev­el by lev­el until employ­ees’ indi­vid­ual objec­tives are final­ly set.

Why goal cas­cad­ing appeals to so many people

If we look at the idea behind goal cas­cad­ing, it is easy to see its appeal. The whole process is designed to pro­vide a sin­gu­lar pur­pose and direc­tion for the goals of all employ­ees in the organ­i­sa­tion. This idea of a clear line of sight is a very pow­er­ful and com­pelling con­cept. Unfor­tu­nate­ly, goal cas­cad­ing is fun­da­men­tal­ly flawed and it typ­i­cal­ly results in problems.

Why goal cas­cad­ing doesn’t work

1. Lack of auton­o­my. This is the most impor­tant rea­son why goal cas­cad­ing should be left in the past. These days, employ­ees should be giv­en the free­dom to write their own goals (with sup­port and input from their man­ag­er). When we assign our own goals, we are more dri­ven to com­plete them and we tend to per­form at our best.
2. Cas­cad­ing only goes one-way. This is a prob­lem because when it is the respon­si­bil­i­ty of man­age­ment to deter­mine the goals of those at the bot­tom of the organ­i­sa­tion, they are unlike­ly to under­stand, in the same way as the employ­ee him or her­self, what is required of the role. The employ­ees at the ​‘bot­tom rung’ of an organ­i­sa­tion may be giv­en goals that seem irrel­e­vant to the every­day real­i­ties of the job. Of course, this prob­lem gets worse as the com­pa­ny grows.
3. Cas­cad­ing does­n’t allow for adapt­abil­i­ty and change as it’s typ­i­cal­ly only car­ried out once a year (because it is so time con­sum­ing). In mod­ern organ­i­sa­tions, goals need to be read­dressed and reassessed on a reg­u­lar basis. This is exact­ly the rea­son why con­tin­u­ous per­for­mance man­age­ment has become so pop­u­lar over recent years. When the focus of goals needs to be shift­ed, it is not good enough to wait an entire year for the objec­tive cas­cad­ing process to be com­plet­ed again.
4. Goal cas­cad­ing is an admin­is­tra­tive night­mare. It relies on every­one adher­ing to a strict timetable of objec­tive cas­cad­ing, work­ing from the top down­wards, in that order. This is almost impos­si­ble to achieve with­out a large amount of ​‘polic­ing’ by HR, so you fre­quent­ly end up with frus­trat­ed employ­ees not being able to finalise their objec­tives when they are ready to because some­one more senior than them has not done their bit on time.

Rather than cas­cad­ing SMART objec­tives down­wards, align them upward

Stud­ies have shown that when employ­ees can see how their objec­tives con­tribute to achiev­ing the goals of their organ­i­sa­tion, they are more engaged and moti­vat­ed. A bet­ter way to achieve this is to give employ­ees respon­si­bil­i­ty for set­ting their own objec­tives, giv­ing them the infor­ma­tion they need to ensure that their objec­tives sup­port the organisation’s strate­gic goals. This is the approach that lead­ing man­age­ment research organ­i­sa­tion, CEB, rec­om­mends in its Employ­ee Per­for­mance Para­dox paper:

“The best com­pa­nies give employ­ees a one-page sheet of orga­ni­sa­tion­al pri­or­i­ties at the enter­prise lev­el, the rel­e­vant region or coun­try lev­el, and the busi­ness unit or func­tion­al lev­el. This sheet is an easy ref­er­ence point that employ­ees and man­agers can use to doc­u­ment employ­ee goals. By pre­emp­tive­ly align­ing — from the employ­ee up — low­er-lev­el goals with high­er goals, orga­ni­sa­tions can save man­agers time con­duct­ing lengthy top-down goal cascades”.

We like this approach for a num­ber of rea­sons. First­ly, it is sim­ple to imple­ment and does not require elab­o­rate work­flows and timeta­bles. Sec­ond­ly, it gives employ­ees own­er­ship for set­ting their own objec­tives, mean­ing they are more like­ly to com­mit to achiev­ing them. And third­ly, it helps employ­ees to gen­uine­ly under­stand the strate­gic pri­or­i­ties of the organ­i­sa­tion and forces them to think about how their role con­tributes towards achiev­ing them.

You don’t need to go as far as set­ting and shar­ing busi­ness unit or func­tion­al lev­el goals as the CEB sug­gests, just shar­ing the over­all busi­ness goals can still be effec­tive. For upwards align­ing to work suc­cess­ful­ly, there are two key requirements:

1. The goals of the organ­i­sa­tion and / or divi­sion, must be shared with employ­ees at objec­tive-set­ting time, in a lan­guage they can under­stand and relate to. This may mean re-writ­ing some of the goals, replac­ing ​‘board-lev­el’ terms such as ​“EBIT­DA” with vocab­u­lary that is more wide­ly under­stood (e.g. ​“prof­it”).
2. Employ­ees need to be edu­cat­ed on how to pre­pare their own SMART objec­tives, and align them to the high­er lev­el strate­gic goals. This does not nec­es­sar­i­ly mean run­ning a train­ing course on objec­tive set­ting (although that would def­i­nite­ly be of val­ue) — you could cre­ate a video or cre­ate a hand­out that explains how to do it. Either way, you should pro­vide employ­ees with some exam­ples of well-aligned SMART objec­tives for your organ­i­sa­tion to bring them the align­ment process to life.

Using tech­nol­o­gy

Tech­nol­o­gy can also help to encour­age strate­gic align­ment of objec­tives. For exam­ple, using  OneAdvanced Performance & Talent soft­ware you can choose to dis­play the organisation’s over­all goals or divi­sion­al goals at the point of objec­tive set­ting. So when an employ­ee cre­ates a new objec­tive, they are shown the organ­i­sa­tion­al and/​or divi­sion­al goals for the peri­od and asked to select which one their objec­tive will support.

While goal cascading has long been a popular method for aligning objectives within organisations, its limitations highlight the need for a more dynamic approach. Aligning goals upwards, rather than simply cascading them down, allows for greater employee engagement and ownership.

Enabling employees to set their own objectives with a clear understanding of how these contribute to the organisation’s broader goals, companies can foster a more motivated and responsive workforce. Coupled with modern performance management tools and technology, this approach not only streamlines the goal-setting process but also enhances overall organisational performance. Embracing this shift can lead to a more agile and aligned organisation, where every team member plays a crucial role in achieving collective success.

To know more about our solutions, contact our team today!