360-degree feedback is a performance appraisal system that provides each employee with feedback from their supervisor and four to eight peers, coworkers, and customers. Feedback from a diverse group helps each employee understand how they are viewed based on behaviors each appraiser has seen. Companies using this system most likely also provide for a self-appraisal by the employee.
Most companies have a mission, a vision, and goals, and the 360-performance review provides insight into the skills and attitudes desired by the organization in order to meet these targets.
However, unless implementation and maintenance of the process are fine-tuned, using 360-degree feedback can produce unhelpful results. Nevertheless, there are many benefits to using 360-degree feedback.
The Benefits of 360-Degree Feedback
The Association for Talent Development has been following the use of 360-degree feedback for over 15 years. They have reported that companies are happy with this aspect of their performance review process and say that the following features of the process are what they like the most:
- Better feedback from more feedback sources
- Aids in team development
- Personal and organizational performance improvement
- Career development
- Lessens the risks of discrimination
- Better customer service
- Ongoing resource for organizational training needs
Disadvantages of a 360-Review Process
However, companies that use the 360-degree process as their complete performance management system are making a mistake. Instead, 360-degree reviews should only be one part of an organizational performance management system. So, what could possibly go wrong?
- A lack of implementation planning can hamper the review process.
- It may result in a failure to connect the process with the strategic goals of your company.
- Reviewers are usually anonymous, so getting clarification of shortcomings is almost impossible.
- Too much focus on negatives. The appraisal process highlights the negatives as well as the positives of each employee. However, programs that highlight and explain review outcomes should instead place more emphasize on the positive.
- Employees asked to participate in a 360-degree review can take it as an opportunity to “put the fix” in and rate friends higher than they deserve or rank people they dislike lower than they should. The performance management system needs safeguards.
The positives attributable to the 360-degree review process indicate it is a good method for furthering employee careers and organizational goals. Addressing the disadvantages of the process before implementation will help to ensure that implementation will be successful.
Understanding When to Leverage 360 Degree Feedback
Given the pros and cons, whether or not to implement this type of appraisal system does not just depend on your organization’s type or industry, but also the level of contribution you’ll receive across your workforce. If your organization has a strong sense of company culture and there is fluidity between departments and locations, then utilizing this type of feedback program may be beneficial given that you will have the proper level of employee engagement to support it.
Another option in approaching this is to ease into it, meaning to take an already existing feedback program and slowly add in relevant stakeholders that could provide visibility in areas that would otherwise be overlooked.