Like most employee evaluation programs, the 360-degree feedback process can be effective or ineffective depending on the guidelines, training and implementation accompanying it.
Feedback in this process is typically provided by subordinates, peers and supervisors. It also includes a self-assessment and may include feedback from customers, suppliers and other stakeholders.
Results can be effectively used by the person receiving the feedback to seek training and development for improvement if necessary.
However, there is some controversy regarding whether 360-degree feedback improves employee performance, and it has even been suggested that it may actually decrease shareholder value.
A 2001 Watson Wyatt study found that 360-degree feedback was one of the factors associated with a 10.6 percent decrease in market value of an organization. The study notes that while nothing is inherently wrong with these practices, many organizations implement them in misguided ways.
And a study on the patterns of 360-degree feedback rater accuracy shows that the length of time the rater has known the person being rated has the most significant effect on the accuracy of a 360-degree review. According to the study, the most accurate ratings come from knowing the person long enough to get past first impressions (one to three years), but not so long as to begin to generalize favorably (more than five years).
Organizations having success with 360-degree feedback processes report:
- Organizational climate fosters individual growth
- Criticisms are seen as opportunities for improvement
- Assurance that feedback will be kept confidential
- Development of feedback tool based on organizational goals and values
- Feedback tool includes area for comments
- Brief workers, evaluators and supervisors about purpose, uses of data and methods of survey prior to distribution of tool
- Train workers in appropriate methods to give and receive feedback
- Support feedback with back-up services or customized coaching
Organizations using 360-degree feedback without first providing the foundation for success can have negative consequences such as:
- Feedback too often tied to merit pay or promotions
- Comments are traced to individuals causing resentment between workers
- Feedback not linked to organizational goals or values
- Use of the feedback tool as a stand alone without follow-up
- Poor implementation of tool negatively affects motivation
- Excessive number of surveys mean raters provide few tangible results
When a 360-degree feedback process is not properly implemented it can seriously derail its effectiveness. Like any training or development program, this process requires guidelines and oversight to ensure it is implemented properly and fairly throughout the organization.
Since 360-degree feedback processes are typically anonymous, people receiving feedback have no recourse if they want to further understand the feedback. They have no one to ask for clarification of unclear comments or more information about particular ratings and their basis.
Too often the 360-degree feedback process is problem-focused rather than solution-focused. By focusing on the employee’s weaknesses there is less of an opportunity to build on the employee’s strengths. And great leaders are those who build upon employee strengths rather than on their weaknesses.
The best 360-degree feedback provides insight about the skills and behaviors desired to meet the mission, vision and goals of the organization. It enables each individual to understand how his or her effectiveness as an employee is viewed by others. The feedback is based on behaviors that other employees can see. And the process includes a follow-up plan or coaching in order to improve.
As with any performance feedback process, it can be a profoundly supportive, organization-affirming method for promoting employee growth and development. Or the process can reduce morale and motivation, and make things much worse for the individual and the entire organization.