The Role of 360-Degree Feedback in Performance Appraisals: A Comparison with Other Methods

The role of 360-degree feedback in performance appraisals How does this compare with other performance appraisal methods? Executive summary 360-degree feedback is one of the most widely used employee assessments today. Its popularity has increased dramatically with the growth of the web-based assessment tools that has made implementation easier, cheaper and faster. The purpose of the 360-degree feedback is to assist each individual to understand the strengths, weaknesses and development needs to perform the job at an optimum level.

The organisations should have a clear understanding as to why they are using the 360-degree feedback and should follow the right steps to successfully implement the process. I have personally undergone 360-degree feedback assessment early this year and thought it was a waste of time for the reasons discussed under ‘what can go wrong? ’ in his paper. What is 360-degree feedback? The purpose of the 360-degree feedback is to assist each individual to understand the strengths, weaknesses and development needs to perform the job better.

This method is predominantly being used by middle to senior management level employees with the opportunity to receive performance feedback from a range of colleagues including, supervisor, team members (or direct reports) and peers. It also includes a self-assessment and feedback from external sources such as customers and suppliers or other interested stakeholders. 360-degree feedback can also be a useful development tool for people who are not in a management role.

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We can argue that a ‘non-manager’ 360-degree assessment is not measuring feedback since there are no direct reports, but my extensive reading on this suggest that the same principles can be still apply and can be used to help employee be more effective in their current roles and guide them to move into a management role. The results from 360-degree feedback are used to plan training and development needs of the employees. Results are also used by some employers to make decisions such as pay or promotion.

The German Military first began gathering feedback from multiple sources in order to evaluate performance during World War II (Fleenor & Prince, 1997). Gradually, the idea of 360-degree feedback gained momentum and by the 1990s most Human Resources and Organisation Development professionals stated using it widely. Rationale for using 360-degree feedback There are number of rationales for using the 360-degree feedback. In a knowledge-based economy, it is increasingly important for organisations to understand the competencies needed in the workforce for business success and then develop those competencies on an ongoing basis. 60-degree feedback has several advantages over other assessment methods that make it ideal for these purposes (Tornow & London, 1998). These advantages include: Accuracy Arguably, 360-degree feedback is the only assessment method many organisations can rely on to evaluate the capabilities of their people. 360-degree feedback surveys are more accurate for several reasons. Firstly, multiple ratings are obviously more accurate than a single person's view, as long as the raters are properly selected and trained. Secondly, ratings from different perspectives (self, manager, peers, direct reports, etc. provide a more complete picture of the participant's capabilities than just one perspective. Thirdly, the anonymity in providing feedback typically assures honest and accurate ratings. Acceptance A wide range of research consistently shows that 360-degree feedback is more accepted by participants than supervisor evaluations alone and is more likely to lead to specific developmental actions (Lepsinger & Lucia, 1997). The motivational component here is particularly important, because no matter how accurate the feedback is, little will be gained unless it results in positive change and development.

Richer understanding of performance Providing feedback from different perspectives allows participants to gain valuable insight into how their own performance is perceived across different groups. People behave differently when interacting with different groups and even the same behaviours could be perceived differently. Understanding these differences across roles can be very helpful in developing training and development needs of the employee. Promotes open communication around performance 60-degree feedback can open up communications about performance because the process involves giving and receiving feedback from all directions in the organisation–upwards, sideways and downwards. More specifically, 360-degree feedback can provide an excellent forum for employees and their managers to talk openly about performance and plan ways employees can further develop their capabilities and behavioural attributes. Easy and fast to implement Organisations use 360-degree feedback surveys because they are easy to implement and can be done quickly and cost effectively (since the emergence of web-based assessment tools).

At the opposite extreme is something like formal, comprehensive assessment centres that demands much more resources, time and cost (Mack, 2009). Application of 360-degree feedback The organisations use 360-degree feedback for more than one application and uses for different purposes (Rigby 2009). Individual development This is the primary and the most common reason for using 360-degree feedback. The feedback reports summarises strengths and development needs and provides insight on how employees are perceived by different groups i. e. peers, customers, manager.

Well-designed 360-degree feedback reports also provide suggestions on what the participant might do to change behaviours and become more effective in their role. Identify leadership potential Organisations often use 360-degree feedback to identify potential leaders. This application requires creating 360 assessments not only to tap into the competencies that are needed for current roles, but also to give an indication as to how the individual might perform at levels above their current position. Senior management coaching Senior managers at times can be unaware of the impact their actions have on others.

However, more than employees, what they do and say adds impetus to drive the organisational performance. Good feedback can help executive understand the ‘blind spots’ (how executives perceive themselves versus how others see them), communicate the consequences of actions and highlight priority areas needed for leadership success. Identify skills gaps and measuring training impact 360-degree feedback can help to understand the organisation’s overall strengths and the skill gaps. This information can be used to better target training and development needs of the organisations.

Further, the feedback can be used to measure changes in behaviour after training. The resulting feedback will indicate whether behavioural change has occurred and to what extent the training was successful in helping employees transfer learnings to their jobs. 360-degree feedback lifecycle It is important that organisation’s allocate enough time to define the scope of the exercise and have a comprehensive plan to implement. This is pivotal for the success of any performance appraisal and management method (Rigby 2009). Defining the scope and planning The design and implementation of the 360-degree feedback system requires thoughtful planning.

Are the employees accepting the system? Are the goals, procedures and benefits of the system clearly defined? Is the rating instrument relevant, valid and reliable? Need to answer all these questions to define the scope. Gain management and employee commitment Management need to be committed to the 360-degree feedback process for it to work. If they aren’t committed, the employees will feel this and the process won’t be effective. Need involve a good cross section of employees to design the process and use them as the ‘champions’ to support the idea across the organisation.

This will increase employee buy-in and acceptance. Customise content for the organisation It is important that the organisation do not purchase one-size-fits-all type 360-degree packages. The organisation needs to focus on getting the feedback on competencies, values and behaviours (Reddan, 2009). A questionnaire (may include 50 to 100 questions) used for 360-degree feedback typically contains items that are rated on a 5 point scale. Questionnaires can include open-ended questions to solicit written feedback. 360-degree feedback can be a time consuming process if done manually.

A good software package will take care of all the time consuming tasks. Communicate with people People tend to be suspicious of things they do not understand. Thus, it is important to communicate to the employees the precise way in which ratings are to be combined, as well as the purpose, benefits and procedures of the 360-degree feedback. Need to use simple and clear language to provide key messages. Ask people to provide feedback Need to determine who is going to receive feedback and then the feedback providers need to be selected. It’s also essential that a person completes a self review.

This really helps a person identify gaps between how they see themselves and how they are perceived by others. Collate feedback and produce reports A report is produced for each person receiving feedback. This helps them understand the feedback provided by each of their reviewers. Responses from each of the reviewers, except managers, are generally aggregated. This protects anonymity and makes sure that an individual’s responses can not be identified. When employees eventually receive their feedback they will need someone (i. e. HR professional) to help them understand it and to create a plan to develop areas needing improvement.

Provide coaching A report is provided to the person receiving feedback as part of a coaching and development process. This should be done by someone skilled at coaching–someone from HR or a coaching professional. If immediate managers are to provide coaching and they aren’t skilled in this area, they will need some training. Post implementation review After the pilot program and after the first full 360-degree feedback process, conduct a post implementation review to determine whether the feedback is producing the result the organisation wanted and where improvements can be made to the process.

Steps for successful implementation In order for the 360-degree feedback system to be successful there must be employee acceptance of the system. If the system is unjust or has errors, it will be dismissed for obvious reasons (Clark & Whittall, 2003). There are three key steps to using the 360-degree feedback assessment successfully: Make it fit into the organisation From my own experience, the need to fit 360-degree feedback into the culture of the organisation is the key to success as it will appear less threatening and fairer. Employees should be encouraged to be active participants in the evaluation.

It is also important to train the feedback providers to be sensitive, respectful and polite. Treating employees in a friendly and respectful manner and offering constructive advice will make them more open to accepting the performance appraisal system. Make it psychometrically sound Ensure that the selected feedback instrument is applicable in terms of it measures what it proposes to measure, consistency and accuracy. The 360-degree feedback system only works effectively if it measures the relevant knowledge, skills, abilities and personality characteristics necessary for high levels of job performance.

To increase reliability and decrease the impact of individual biases a large sample of reviewers should be selected. Use with care 360-degree feedback is a powerful tool and it should not be used in a way which is likely to damage trust between colleagues–for example to try and manage someone out of a job or justify some sort of disciplinary action. Also, it should be credible that the purpose of the exercise is a supportive one designed to help people succeed. It should not be used if there is no intention of helping the employee to develop in the issue that it raises.

Steps must be taken to ensure the confidentiality of the feedback results. For example, feedback ratings from several subordinates may be averaged to mask the identity of an individual subordinate. The confidentiality helps ensure that the results are genuine. What can go wrong? Ineffective Assessment Items If questions are not designed to extract information on competencies, values and behaviours, then it will hard to receive valuable information that satisfies organisational expectations. Therefore, the questions need to be well written to gather valuable data to avoid garbage in–garbage out phenomena.

Lack of alignment with the organisation's Vision, Mission and Strategy If the scope and the purpose of the feedback process is not aligned to the organisation's vision, mission and strategy, then employees will not be developing competencies that contributes to the strategic direction of the organisation. Lack of senior-level support and commitment If the leaders in the organisation do not vocally support and encourage participation in the feedback program and express their belief in the benefits it will provide, the 360-degree initiative will never be a success.

It is important to get buy-in at all levels of the organisation to make it work (Rigby, 2009). Lack of communication and trust Lack of communication with both the people receiving feedback and the people giving feedback as to what, why, how and when will set a degree of mistrust and fear to provide feedback. One of the most effective ways to reduce anxiety is to use a neutral third party to administer the feedback program. Poor planning If the feedback program is not well thought out, it will not run smoothly. There are many logistical issues to consider before launching a feedback program.

If the employees perceive that the program is not well planned the credibility of the organisation will be undermined (Rigby, 2009). Inappropriate delivery of feedback The idea of a feedback program is to help employees perform better. Negative feedback can be demoralising and counterproductive. If feedback is not provided in an appropriate manner the feedback program could backfire. It is recommended to use professional, neutral coaches to deliver feedback. No development plan To be successful and truly realise the value of 360-degree feedback, the rocess must include strategies for ongoing development and accountability around individual performance improvement. Inturn, employees who receives feedback needs to create some developmental goals that can be measurable and achievable. No accountability Development of goals are meaningless unless employees are held accountable for achieving them. It is recommended to create goals on SMART (Specific, Measurable, Attainable, Realistic and Timely) principle (Rigby, 2009). No follow-up There is no way to find the success of the feedback program if there is no follow up.

It is a good practice to solicit additional feedback sessions six to twelve months after the initial feedback. How 360-degree feedback compare with other performance appraisal methods The key question is can 360-degree feedback method be used in place of traditional performance appraisal methods? My personal experience gives a firm no answer. Firstly, the raters may not necessarily in a position to assess employee’s performance in terms of achievement of goals and objectives. Secondly, just because an individual receives insight into the behaviour does not mean that the individual can or will change it.

Traditional performance management systems have struggled with this axiom for years and it is naive to think that 360-degree feedback programs will be significantly different. Lets discuss what other methods presents us. Critical Incidents This method focuses on an unusual event that denotes superior or inferior employee performance in some part of the job. The limitations are that negative incidents may be more noticeable than positive incidents and the supervisors have a tendency to unload a series of complaints about incidents on the employee during an annual performance review session (Rigby, 2009).

Behaviourally Anchored Rating Scales (BARS) This is a method where a rating scale which uses specific behaviours as anchor points. The limitations are that rater errors still may apply and behaviours used are activity oriented rather than results oriented. This is a problem when employees perform the activity but not accomplish the desired goals. This method could be time consuming and expensive to run (Rigby, 2009). Management by Objectives (MBO) This is a method where the management rates performance on the basis of employee achievement of goals set by mutual agreement of employee and manager.

MBO works less well when -it has goals that are difficult to set -goals tend to take precedence over the people who use it -goals are inflexible and rigid (Rigby, 2009) Further, Psychometric Profiling such as Myers Briggs Type Indicator (MBTI), DISC (Thomas International) or Forte Communications Style Profile measures employee preferences and then predicts how employee likely to choose to behave while 360-degree feedback focuses on the observed behavioural competencies.

In conclusion when I compare 360-degree feedback with other performance appraisal methods, I think it still stands out as a leading assessment tool for the reasons discussed under ‘rationale for using 360-degree feedback’. For the best result, the research suggests that the two combined methods (i. e. MBO and 360-degree feedback) will provide an incredibly powerful assessment method for both the employee and the organisation (Eichinger, 2004). References •Clark, S. , Whittall, A. (2003). Performance management develops productivity.. Retrieved from http://web. lexis-nexis. om/universe/document on September 8, 2009. •Edwards, Mark R. , & Ewen, Ann J. (1996). 360-degree feedback: The powerful new model for Employee Assessment & performance improvement. •Eichinger, Robert. (2004). Patterns of Rater Accuracy in 360-degree feedback. •Fleenor, J. W. , & Prince, J. M. (1997). Using 360-degree feedback in organisations: An annotated bibliography. Greensboro, NC: Center for Creative Leadership. •Heathfield, S. (2004). 360-degree feedback: the good, the bad and the ugly defines and examines multirater feedback. Retrieved from http://humanresources. bout. com/library/weekly/aa042501b. htm on September 9, 2009. •Lepsinger, R. , and Lucia, Anntoinette (1997). The art and science of 360-degree feedback •Mack, R. (2009). ANU lecture material on Assessment and Employee Selection on Human Resource Management. •Reddan, T. , (2009). ANU lecture material on Assessment and Employee Selection on Human Resource Management. •Rigby. C. , (2009). ANU lecture material on Assessment and Employee Selection on Human Resource Management. •Tornow, Walter W and London, Manuael (1998). Maximising the value of 360-degree feedback

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