The Good, Bad and Truly Ugly about 360-degree Feedback

 

Just what is 360-degree feedback?

Does your organization gather feedback about employees’ interactions from a variety of source types (such as customers, suppliers, colleagues, and supervisors)? That’s called multi-source feedback, or 360-degree feedback.

What’s GOOD about it?

The 360 strategy can provide insights into an employee’s leadership ability, customer service satisfaction, and readiness for advancement.

The 360 strategy can provide insights into an employee’s leadership ability, customer service satisfaction, and readiness for advancement. Research shows that gathering multi-source feedback can benefit the organization by helping develop leaders (London and Beatty), improving customer loyalty (Smither and Walker), and creating a host of other positive outcomes, like increasing revenues, profit margins, sales, and contracts (Erickson and Allen). 360 feedback has been linked to higher employee satisfaction, lower turnover, and deeper engagement with the organization (Kazi et al.).

What’s BAD about it?

When multi-source feedback is used for appraising—but not developing—employees, they may feel it’s merely an excuse to refuse them incentives or promotions.

In certain circumstances, 360 feedback may have negative repercussions. A meta-analysis of 600 studies found that only one third of the studies actually found an improvement in performance. Another third showed no change (Kluger and DeNisi). Worryingly, the last third reported negative changes in performance (Taylor). When multi-source feedback is used for appraising—but not developing—employees, they may feel it’s merely an excuse to refuse them incentives or promotions.

What’s truly UGLY about it?

Using multi-source feedback to generate performance reviews can lead to inaccurate performance reviews and employee resentment due to several common issues:

• Those giving feedback may not understand the job’s objectives, performance metrics, or the employee’s work on cross-functional teams, leading to irrelevant feedback.
• The anonymous nature of 360 feedback may preclude constructive follow-up that leads to behavioral improvement.
• Office politics, biased reviews, or immature reviewers can devastate a career.
• Those being reviewed may use their networking and positional power to “arrange” to get better reviews than a less-connected but higher-performing peer.

Multi-source reviews don't give a full picture of performance. 360 reviews provide only a snapshot—performance must be examined continuously.

HR experts urge caution in basing evaluations on multi-source feedback—especially when it impacts pay and promotion opportunities.

According to Dick Grote, author of the book How to be Good at Performance Appraisals (Harvard Business Press, 2011), managers “do virtually nothing on the back end [to hold] people accountable for doing something with the data they get.” Grote said that applying 360 feedback to development or coaching “probably doesn't do much harm,” but when it's used for determining compensation and/or promotion, misleading information might be provided “by the office screw-up who doesn't know anything anyway. And also by the guy down the hall bucking for the same promotion I am [who] wants to put a dagger in my ribs.”

Even if such corruption is not present, there are frequently highly specialized skills involved that outside raters do not understand. They are also less likely to be trained observers of human behavior, which means that multi-source reviews don't give a full picture of performance. 360 reviews provide only a snapshot—performance must be examined continuously.

Moreover, cost is a factor. Gathering multi-source feedback might involve the employee, the supervisor, several peers, and a few direct-reports—up to a dozen people filling out reports. The numbers of staff hours necessary to complete a 360 review can be intense.

To 360 or not to 360?

360 feedback can enhance the information gathered directly by the supervisor but shouldn’t replace it.

If you want to gather as much feedback as possible for employee development purposes, a 360 review may help.

However, if your goal is to improve behavior quickly and effectively, consider coaching by the direct supervisor—the person responsible for setting standards, assigning tasks, and overseeing the work. The supervisor can provide timely feedback on the employee’s overall performance.

Setting expectations, coaching toward success, and assessing performance are the duties of a supervisor.

360 feedback can enhance the information gathered directly by the supervisor but shouldn’t replace it.

References

Erickson, A., and T. Allen. “Linking 360 Feedback to Business Outcome Measures.” 18th Annual Conference of the Society for Industrial and Organizational Psychology, Orlando, FL, 2003.

Kazi, Abdul Subhan, et al. “The Impact of the 360 Degree Feedback Systemon Employee Satisfaction in Higher Educational Institutes.” NICE Research Journal of Social Science. ISSN: 2219-4282, vol. 7, no. 14, 2018, pp. 29–47.

Kluger, Avraham N., and Angelo DeNisi. “The Effects of Feedback Interventions on Performance: A Historical Review, a Meta-Analysis, and a Preliminary Feedback Intervention Theory.” Psychological Bulletin, vol. 119, no. 2, American Psychological Association, 1996, p. 254.

London, Manuel, and Richard W. Beatty. “360‐degree Feedback as a Competitive Advantage.” Human Resource Management, vol. 32, no. 2‐3, Wiley Online Library, 1993, pp. 353–72.

Smither, James W., and Alan G. Walker. “Measuring the Impact of Multisource Feedback.” The Handbook of Multisource Feedback, Jossey‐Bass San Francisco, 2001, pp. 256–74.

Taylor, S. “Assess Pros and Cons of 360-Degree Performance Appraisal.” SHRM, 12 July 2011, https://www.shrm.org/resourcesandtools/hr-topics/employee-relations/pages/360degreeperformance.aspx.