The 360 Mystic
Do 360-degree appraisals really work?

By Janice Schonwetter

A major workplace management tool in the last 20 years has been 360-degree appraisals.

In a traditional approach to performance assessment, a manager receives feedback only from the boss. With a 360-degree performance review, a manager receives feedback from a circle of associates, including the boss, peers and direct reports. The manager also does a self-evaluation. Comparisons can then be drawn between the manager's self-perception and the perception of others.

Research indicates 360-degree feedback is extremely effective in changing behavior if the system is implemented correctly. Research also shows 360-degree feedback negatively impacts individual behavior and organizational effectiveness if not implemented correctly. The success of a 360-degree appraisal system is dependent upon overcoming the cons and leveraging the pros related to a multi-rater feedback system.

The Cons

• Fear of reprisal. Ensure the feedback remains anonymous. Managers being rated will, of course, be able to identify their own feedback and that of their boss. In order for feedback from the peer and direct report groups to remain anonymous, there should be at least five respondents in each group. Compile responses from these groups as aggregate results by group.
  
• Rating inflation. Encourage respondents to be honest in their feedback. Research indicates that respondents tend to be consistent in ratings. The employee being assessed and the boss should determine who the raters should be. This will prevent the employee from choosing only those who might provide favorable ratings.
  
• Use of feedback. The most common 360-degree use is for manager development. Data has also been used to determine performance appraisal ratings and compensation treatment. The most effective way to use 360-degree feedback is for developmental purposes only, allowing the manager receiving feedback to own the data and share with the boss on a voluntary basis. 
  
• Time constraints. Responding to a 360-degree feedback survey can be time consuming. The time required is compounded if one individual has to assess numerous others. Using an electronic system for administering and interpreting the assessment can speed up the process.
  
• Resistance to feedback. Foster a culture of continuous learning where honest and caring feedback is an expectation. 360-degree systems work especially well in cultures where mistakes are used as learning rather than disciplinary opportunities.

The Pros

• Behavior change. Honest and direct feedback revealing consistent trends in opinion can have an impact on a manager's behavior. The ability to compare self-perception with  others' perceptions can result in deeper understanding of performance. This type of feedback frequently leaves the manager open to change, growth and development.
  
• Data validity. Studies show that multi-source rating systems are significantly more accurate than single-source rating systems.
  
• Focused skill building. The attributes included in the 360-degree assessment can identify and reinforce specific skill sets required to achieve business-related goals.
  
• Team effectiveness. Team strengths and weaknesses can readily be identified when analyzing 360-degree results for an entire management team.
  
• Systemic integration. The 360-degree attributes also can be used in recruitment and selection, assessment centers, performance management systems and leadership development programs. This type of attribute integration encourages continuous reinforcement and development of skill sets critical to organizational success.

Successful Implementation

Use the following steps to effectively implement a 360-degree appraisal system in your organization:

• Determine the purpose for implementing 360-degree system in your organization.
  
• Gain key stakeholder support to ensure relevance and ownership.
  
• Buy or develop a survey instrument and customize the assessment attributes to the vision, values and skills needed to help the organization meet its goals.
  
• Develop and implement a robust communication plan that positions the 360-degree appraisal as a process to help managers develop and grow.
  
• Train all levels of management in the art of giving and receiving feedback.
  
• Train specified individuals in your organization to interpret the 360-degree results and deliver them to the manager along with the report.
  
• Develop and implement action-oriented development plans and follow-up activities to reinforce behavior change.
  
• Monitor the implementation throughout the organization to gauge response and to identify ideas for improvement.

Anthony Pantaleone in the Business and Legal Reports said, "Used regularly as an integral part of a strategic development plan, 360-degree appraisals can lead to more consistent management development, better alignment of corporate goals with personal development objectives, more open communication and a stronger team ethic."

Janice Schonwetter is president of HR by Design, which partners with small to medium-size businesses, non-profit organizations and government agencies to optimize employee performance and improve organization effectiveness. You can contact her at or (913) 484-5954.