Successful organizations strive to evaluate and guide their employees toward constant improvement, but a standard performance review system is often found wanting. While more and more companies are integrating a technique called 360-degree feedback into their review process, some are finding that it's not going as smoothly and easily as they had hoped.
Organizations can do a poor job of introducing and using this type of multi-rater feedback process. But, it is possible, with the right steps, to do a good job of introducing and maximizing the value of 360-degree feedback. This matters because nothing raises hackles as fiercely as a change in performance feedback methods, especially when they may affect decisions about an employee's compensation.
What Is 360-Degree Feedback?
360-degree feedback is a method and a tool that provides each employee the opportunity to receive performance feedback from his or her supervisor or manager and four to eight peers, reporting staff members, coworkers, and customers. Most 360-degree feedback tools are also responded to by each individual in a self-assessment.
360-degree feedback allows each individual to understand how his effectiveness as an employee, coworker, or staff member is viewed by others. The most effective 360-degree feedback processes provide feedback that is based on behaviors that other employees can see.
The feedback provides insight into the skills and behaviors desired in the organization to accomplish the mission, vision, and goals and live the values. The feedback is firmly planted in behaviors needed to exceed customer expectations.
People who are chosen as raters or feedback providers are often selected in a shared process by both the organization and the employee. These are people who generally interact routinely with the person who is receiving feedback.
The Purpose for Using 360 Degree Feedback
The purpose of the 360-degree feedback is to assist each individual to understand their strengths and weaknesses and to contribute insights into aspects of their work that need professional development. Debates of all kinds are raging in the world of organizations about how to:
- Select the feedback tool and process
- Choose the raters
- Use the feedback
- Review the feedback
- Manage and integrate the process into a larger performance management system
Taking a look at the pros and cons of this method can help with the decision-making process. Each item is fleshed out in more detail below the list.
Provides feedback to employees from a variety of sources
Develops and strengthens teamwork and accountability
Uncovers procedural issues that can hinder employee growth
Reveals specific career development areas
Reduces rater bias and discrimination tendencies
Offers constructive feedback to improve employee outputs
Supplies insight on training needs
Serves as only part of overall performance measurement system
Causes organizational issues if implemented in hasty or incomplete fashion
Can fail to add value if not effectively woven into existing performance plans
Prevents recipients from getting more information because the process is anonymous
Focuses on employee weaknesses and shortcomings instead of strengths
Provides feedback from inexperienced raters, and groups can "game" the process
Requires large degree of data collection and processing in some cases
The Upside of 360-Degree Feedback
360-degree feedback has many positive aspects and many proponents.
According to Jack Zenger, a highly-regarded global expert on organizational behavior, he has come to recognize "...the value of 360 feedback as a central part of leadership development programs. It’s a practical way to get a large group of leaders in an organization to be comfortable with receiving feedback from direct reports, peers, bosses, and other groups. Once leaders begin to see the huge value to be gained, in fact, we see them add other groups to their raters such as suppliers, customers, or those two levels below them in the organization."
And later, Zenger adds: "More than 85% of all the Fortune 500 companies use the 360-degree feedback process as a cornerstone of their overall leadership development process. If you are not a current user, we encourage you to take a fresh look."
Organizations that are happy with the 360-degree feedback component of their performance management systems identify these positive features of the process that manifest in a well-managed, well-integrated 360-degree feedback process.
Improved Feedback From More Sources
- This method provides well-rounded feedback from peers, reporting staff, coworkers, and managers and can be a definite improvement over feedback from just a single individual. 360 feedback can also save managers time in that they can spend less energy providing feedback as more people participate in the process. Coworker perception is important and the process helps people understand how other employees view their work.
- This feedback approach helps team members learn to work more effectively together. (Teams know more about how team members are performing than their manager.) Multi-rater feedback makes team members more accountable to each other as they share the knowledge that they will provide input on each members’ performance. A well-planned process can improve communication and team development.
Personal and Organizational Performance Development
- 360-degree feedback is one of the best methods for understanding personal and organizational developmental needs in your organization. You may discover what keeps employees from working successfully together and how your organization's policies, procedures, and approaches affect employee success. In many organizations that use 360-degree feedback, the focus has switched to identifying strengths. That makes sense for employee performance development.
Responsibility for Career Development
- For many reasons, organizations are no longer responsible for developing the careers of their employees—if they ever were. While the bulk of the responsibility falls on the employee, employers are responsible for providing an environment in which employees are encouraged and supported in their growth and development needs. Multi-rater feedback can provide excellent information to an individual about what he or she needs to do to enhance their career.
- Additionally, many employees feel 360-degree feedback is more accurate, more reflective of their performance, and more validating than feedback from a supervisor alone who rarely sees them working. This makes the information more useful for both career and personal development.
Reduced Discrimination Risk
- When feedback comes from a number of individuals in various job functions, the possibility of discrimination because of race, age, gender, and so forth is reduced. The "horns and halo" effect, in which a supervisor rates performance based on his or her most recent interactions with the employee, is also minimized.
Improved Customer Service
- Each person receives valuable feedback about the quality of their product or services, especially in feedback processes that involve the internal or external customer. This feedback should enable the individual to improve the quality, reliability, promptness, and comprehensiveness of these products and services they supply to their customer.
Training Needs Assessment
- 360-degree feedback provides comprehensive information about organization training needs and thus allows planning for classes, online learning, cross-functional responsibilities, and cross-training.
A 360-degree feedback system does have a good side. However, 360-degree feedback also has a bad side—even an ugly side.
The Downside to 360-Degree Feedback
For every positive point made about 360-degree feedback systems, detractors can offer the downside. The downside is important because it gives you a road map of what to avoid when you implement a 360-degree feedback process.
The following are potential problems with 360-degree feedback processes and a recommended solution for each one.
Exceptional Expectations for the Process
- 360-degree feedback is not the same as a performance management system. It is merely a part of the feedback and development that a performance management system offers within an organization. Additionally, proponents of the system may lead participants to expect too much from this feedback system in their efforts to obtain organizational support for its implementation. Make sure that the 360 feedback is integrated into a complete performance management system and not used as a stand-alone venture.
Design Process Downfalls
- Often, a 360-degree feedback process arrives as a recommendation from the HR department or is shepherded in by a senior leader who learned about the process at a seminar or in a book. Just as an organization implements any planned change, the implementation of 360-degree feedback should follow effective change management guidelines. A cross-section of the people who will have to live with and utilize the process should explore and develop the process for your organization.
Failure to Connect the Process
- For a 360 feedback process to work, it must be connected with the overall strategic aims of your organization. If you have identified competencies or have comprehensive job descriptions, give people feedback on their performance of the expected competencies and job duties. The system will fail if it is an add-on rather than a supporter of your organization’s fundamental direction and requirements. It must function as a measure of the accomplishment of your organization’s big and long-term picture.
- Since 360-degree feedback processes are currently usually anonymous, people receiving feedback have no recourse if they want to further understand the feedback. They have no one to ask for clarification about unclear comments or for more information about particular ratings and their basis. Thus, developing 360 process coaches is important. Supervisors, HR staff people, interested managers, and others are taught to assist people to understand their feedback and trained to help people develop action plans based on the feedback.
Focus on Negatives and Weaknesses
- At least one book, "First Break All the Rules: What The World's Greatest Managers Do Differently," advises that great managers focus on employee strengths, not weaknesses. The authors said, "People don't change that much. Don't waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough." These are apt words when you consider a 360-degree feedback methodology. Focus on strengths for best success.
Rater Inexperience and Ineffectiveness
- In addition to the insufficient training organizations provide both people receiving feedback and people providing feedback, there are numerous ways raters go wrong. They may inflate ratings to make an employee look good. They may deflate ratings to make an individual look bad. They may informally band together to make the system artificially inflate everyone’s performance. Checks and balances must exist to prevent these pitfalls as well as training for the people who are providing the ratings.
Paperwork/Computer Data Entry Overload
- In traditional 360 evaluations, multi-rater feedback upped the sheer number of people participating in the process and the subsequent time invested. Fortunately, most multi-rater feedback systems now have online entry and reporting systems. This has almost eliminated this former downside.
360-degree feedback is a positive addition to your performance management system when implemented with care and training to enable people to better serve customers and develop their own careers.
However, if you approach it haphazardly just because everyone else is using it, 360 feedback could create a disaster requiring months and possibly years for you to recover.
There are negatives with the 360-degree feedback processes, but with any performance feedback process, it can increase positive, powerful problem solving and provide you with a profoundly supportive, organization-affirming method for promoting employee growth and development.
However, in the worst case, it saps morale, destroys motivation, and enables disenfranchised employees to go for the jugular or plot revenge scenarios against people who rated their performance less than perfect.
The Bottom Line
Which scenario will your organization choose? It’s all about the details. Think profoundly before you move forward, learn from the mistakes of others, and assess your organization’s readiness. Apply effective change management strategies for planning and implementation. Do the right things right and you will add a powerful tool to your performance management and enhancement toolkit.