My company recently announced it will be using "360 Degree Feedback" for employee assessments. What is it, why is it popular now and how are other organizations using 360 Degree Feedback?
Well, your company is not alone. Many of the companies we work with are choosing to use 360 degree feedback ("360" for short) as one means of motivating and measuring employees. The theory is this: By increasing the amount and sources of feedback, the 360 process should more fairly and accurately appraise performance -- ideally leaving both employees and supervisors feeling better about the evaluation process. So how did this "new" idea come about?
What is 360 Degree Feedback?
While the concept of measuring performance and motivating employees is not new, 360 is a relatively new model for employee performance feedback and appraisal. 360 evolved from several existing feedback and performance appraisal methods that you are probably familiar with, including TQM, organizational surveys, and developmental feedback. The 360 degree feedback process, also called multisource assessment, taps the collective wisdom of those who work most closely with employees: supervisors, peers, direct and skip-level reports, and internal and external customers.
Credit: M. Edwards & A. Ewen, "360 Degree Feedback: The Powerful New Model for Employee Assessment & Performance Improvement," 1994, New York: AMACOM
For many companies, 360 degree feedback is a new way to motivate employees and supervisors for continuous learning. Most employees today are more willing to accept feedback to improve their skills and their performance than they have been in the past. However, feedback in the form of only annual reviews puts all the burden for assessment on supervisors who may be biased or lack the training or time necessary to do a fair or complete job.
What's the use?
We've seen companies use 360 for developmental purposes or as a performance appraisal method. Each requires different efforts and considerations. When companies use 360 for development, they must make it very clear that the assessments serve only to identify developmental needs or opportunities. When used for appraisal, far greater efforts must be made to ensure accuracy and fairness. In either case, anonymity and the means for removing bias must be present and paramount in the process. If not, employees won't have much faith in the process and 360 may prove more harmful than helpful. To illustrate how 360 can be used, we'll offer two very different situations that we've seen ...
Scenario 1: An Informal Use for Training and Development
Jack is the president of a large corporation with several subsidiaries. His firm is growing quickly through mergers, acquisitions and the steady growth of existing businesses. He needs a way to develop managers at lower levels to make them ready for advancement when openings occur. Jack uses 360 to identify where his development group "is" with respect to the skills needed for the business' growth. Feedback is received from the "development group" supervisors, peers, and subordinates, and the results are shared with the development group exclusively.
The most critical factor here is that feedback providers understand their role in helping 360 degree feedback recipients to identify development opportunities. In this scenario, 360 serves as a communication mechanism which tells the recipients "here are some areas you should consider." Given this feedback, recipients can decide on which areas they should focus development activities. The application is informal because use of the data is voluntary by the employee, not under the control of the employer. Steps are taken to reduce bias, but the overall approach promotes the inclusion of as much feedback as possible.
Scenario 2: A Formal Use for Promotion and Pay Increases
Jill has just lost her general manager for regional sales and has decided to promote one of five sales managers to the general manager position. Each is intensely interested in getting the increased pay and recognition that would accompany this promotion. Jill wants to select the best person for the job and decides to implement 360 degree feedback as a method for comparing the five potential general managers.
Here, the critical factor is that feedback providers are able to evaluate recipients on their ability to perform both their current position and the promotional position. The instrument used to collect data must be created with painstaking attention to detail. In this scenario, 360 serves as a measuring tool for comparative purposes and therefore must possess the characteristics of any good measuring tool -- accuracy and lack of bias. The application is formal because very specific information is sought. Questions must be unambiguous and relate only to feedback recipients' ability to perform required duties.
Like many good tools, 360 can be used in different ways. In our examples, you saw that Jack used the 360 process to assess managers' general skill levels to better focus development opportunities. Jill used 360 to fill a vacant position, i.e., to compare managers' ability to perform specific duties. To achieve the objectives of their specific 360 application, they must be aware of the necessary steps that ensure success in each different situation. Without doing so, Jack and Jill may have fallen down the hill again!
The Promise and Challenge of 360 Degree Feedback
Because many of the more conventional performance appraisal methods have often proved unpopular with those being appraised and evaluators alike, 360 is gaining popularity with many managers and employees. It offers a new way of addressing the performance issue. When used with consideration and discipline, feedback recipients will feel that they're being treated fairly. In addition, supervisors will feel the relief of no longer carrying the full burden of assessing subordinate performance. The combined effect of these outcomes should result in increased motivation, which in turn improves performance.
For those of you who have a burning need to learn more about 360 ... our suggested reading on the topic is "360 Degree Feedback: The Powerful New Model for Employee Assessment & Performance Improvement" (M. Edwards & A. Ewen, 1994, New York: AMACOM).