What is goal cascading, and why align objectives upwards instead?

For employees' objectives to improve the performance of your organisation, they need to support its strategic goals. Take the analogy of driving a car. Say your objective is to drive 100 miles without stopping in less than three hours. You finish in under two hours, so you have beaten your target. But you were driving in the wrong direction. You achieved the objective and still didn't get where you needed to go. 

Strategic alignment is about getting everyone moving in the right direction. A common way to do it is goal cascading, which has been around for decades. Being long established doesn't make it the best way, 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 

The idea behind goal cascading is appealing to many: it gives every employee goal a single purpose and direction, and a clear line of sight to the top. It can, however, be flawed in practice and can create problems.  

Why goal cascading doesn't work 

• Lack of autonomy. This is the main reason to move on from goal cascading. Employees should be free to write their own goals, with support from their manager. Goal-setting theory suggests people commit more to goals they help shape. 

• It only goes one way. Managers setting goals for people several levels below them are unlikely to understand the role as well as the person doing it, so frontline employees can end up with goals that don't fit the reality of the job. This problem grows in tandem with the size of the organisation. 

• It can't adapt. Cascading takes so long that it usually happens once a year, but goals need reviewing regularly as priorities change. This is why the continuous performance management approachhas spread. 

• It is an administrative burden. Cascading depends on everyone following a strict top-down timetable, which needs a lot of chasing by HR. Employees often can't finish their objectives because someone above them hasn't finished theirs. 

Align SMART objectives upwards 

When employees can see how their objectives contribute to business success, they are more likely to be engaged. However, an even better approach is to ask employees to set their own objectives and give them the information they need to link each one to a strategic business goal.  

This approach is beneficial for three reasons. It is simple to implement, without elaborate workflows and timetables. It gives employees ownership of their objectives, so they are more likely to commit to them. And it helps them understand the organisation's priorities and think about how their role contributes. 

You don't necessarily need to share business unit or functional goals. Sharing overarching targets can work well, but upward alignment needs two things: 

• Share the organisation's goals at objective-setting time, in language employees understand. That may mean rewriting some goals, for example replacing board-level terms such as "EBITDA" with "profit". 

• Show employees how to write their own SMART objectives and link them to those goals. A short video or handout can do this as well as a training course. Either way, include examples of well-aligned SMART objectives from your own employees. 

Using dedicated goal-setting software 

Technology can also assist with encouraging strategic alignment of objectives. For example, using OneAdvanced’s 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.