Linking Pay to Performance: Cascading Goals

Linking Pay to Performance: Cascading Goals 

Ask any competitive sports’ coach to identify the primary team goal before any given season and he or she would certainly respond with something along the lines of, “to win championships”. The individual tasks of all members of the organization, both big and small, revolve around the realization of this one, all-important goal. 

Most businesses operate according to the same basic principle; yet championships instead manifest in the form of augmenting profit margins. Now, in the ever-exasperating world of budget management, it is sometimes difficult to link pay to performance, for how can one determine a specific individual’s impact on the overall budget, and therefore his or her proportional cut of the pie? 

Think of cascading goals like a pyramid: at the top is the single, dominating objective, supported by decreasing layers of goals, that although increasingly-vary as one approaches the bottom, are all connected to the original objective. The top is narrow and controlled by few, while the bottom layers are comprised of the rest of the bunch. Although the direction of the various enterprises is limited to a select group, without the support and aid of its bottom levels, any pyramid is destined to collapse. For this reason, as in sports, the whole success of a business is the sum of each and every one of its parts. This system is worth more than its weight in gold for alleviating some of the stress of budget management. 

‘Cascading goals’ tie an individual’s pay to his or her control over the primary objective. For example, top executives of a company, whose jobs include activities like spearheading marketing campaigns or making big financial decisions, make the most money. In working towards the company’s ultimate goal of garnering greater profits, these individuals make the big decisions and are therefore allotted the greatest percentage of the budget. Along the same lines, managers who might control hiring in a specific region are given a less, yet proportional sum and other employees under them a less, but still comparable amount. 

For the new employee, working hard hours throughout the long days, the ‘cascading goals’ system should not be seen as an obstacle, but rather as a window of opportunity. Sustained outstanding work etiquette gives way to promotions, which assign the employee with more and more responsibility – and added compensation as his or her professional goals inevitably draw greater connections to those in the top tier of the pyramid. 

There is an added morale benefit to paying for performance. When an employee feels like the work he or she is doing is menial, there is just less excitement in the job. The motivation and desire to take pride in one’s work really aren’t there. However, employees who believe that their work is crucial to the advancement of the business as a whole will almost invariably work to the best of their abilities. 

The ability to peer up the steep slope towards the pinnacle of the pyramid gives them perpetual incentive for the future.
While a HRMS is not designed specifically to perform the full cascading goal process, it can however, be used to track basic HR performance and therefore ultimately affect the HR & Payroll combination of events.

About the Author
Carolyn Sokol writes about issues that may affect small businesses such as HRMS and HR Payroll Technology. She is a founder of which helps match small businesses to the right HR service provider for their particular needs. Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding service to customers.

Copyright © 2011 by &
All rights reserved.