360 Degree Feedback As A Tool Of Performance Management

Published by MBA Skool Team, Published on October 13, 2012

About 360 Degree Feedback

Performance appraisal has its roots in Tailor’s time and motion studies. At that time it was a tool to evaluate the monetary compensation to be paid to a person for the performance of some work. It did not take into consideration elements such as job satisfaction and personal competencies. Appraisal, as a tool of management, dates to the period of the Second World War. It was the German military that used feedback from multiple sources to evaluate performance during the Second World War. This method of collecting feedback from multiple sources is now called 360 Degree Feedback. It also referred to as multi rater feedback, multi source feedback or multi source assessment.

This method is four-dimensional and evaluates performance in a manner that is holistic. A 360-degree feedback evaluates a person on certain competencies from the view point of:

  • One’s immediate superior or supervisor
  • One’s peers from the same function or different function but at the same level (sometimes called internal customers)
  • Direct reports
  • External Customers one may have serviced

Feedback from multiple sources is more acceptable than from one source. Thus if the similar feedback, good or bad, comes from multiple sources the feedback has higher credibility. Also one is able to get feedback not only from one’s superior but also one’s peers and reportees who in turn help reduce deviation from the required behaviour.

The Instrument

A competency is the ability of a person to do a job properly. It encompasses a set of defined behaviors that employees are expected to exhibit and are judged on. For e.g. Customer Centricity, Champions Change, Personal Values and Leadership.

A 360 Degree is administered via a questionnaire, which is of the multiple-choice nature. The questionnaire contains positive statements, which correlate to a particular competency. E.g. Under customer centricity: Focuses on customer delight. The assessor is required to rate the person in question on a scale that ranges from Strongly Agree to Strongly Disagree. It is to be noted that the assesse himself also rates him. The questionnaire is structured in such a manner that the assessor is unaware of the competencies in question and the number of questions that anchor a single competency.

The statements from all competencies appear in the questionnaire in a random jumbled order. At the back end, the team administering the survey will know the statements that comprise a single competency. The questionnaire also comprises an open ended section wherein the rater is asked to provide some feedback on questions such as, What should this person start doing, what should this person stop doing etc.

The Report

After a questionnaire is administered to all the raters of an individual, the assessee, average score for each statement is calculated and a feedback report is generated. While administrating the survey it is vital to choose raters and assessors wisely. They must know the assesse in question for a sufficient amount of time to be able to answer the questionnaire in a fair an unbiased manner.

A typical report comprises information on the number of raters of an assesse, his overall score on each competency, detailed scores on each competency statements and an open ended section of comments. These ratings can also be represented graphically. The ratings on different competencies are displayed as a comparison to the assessor’s self rating.  This is essential in showing the gap between a person’s self perception and that of other of himself. Further analysis in the report may include the Top 10 statements and bottom ten statements of the assessor.

A 360-degree feedback may be intimidating to a novice for it provides group average, individual average, and score ranges for the various competencies. Generally a counseling session is conducted wherein the report is explained to the employee. What is essential to the employee is the linkage in the various competencies he has been assessed on. The employee also needs to be pushed to think on the reasons of his low or high ratings on any given competency. Self-analysis will go a long way in taking the best of a 360-degree feedback. The counselor or the person who disseminates the report to the individual must be experienced and understand the implication of the ratings on the various competencies.

Administration and Usage

The nature of such a feedback process is highly sensitive. Feedback provided about a person is not on his work performance but more on his behaviour. Thus secrecy is of utmost importance in any 360-degree feedback. Owing to this fact, many companies outsource this feedback process to an agency. This provides a company with two benefits. Firstly it ensures secrecy of the feedback disclosed. Since the entire process would be administered and controlled by an external agency, the employees of the company would not have access to such sensitive data. Secondly, the external team would have expertise and experience in conducting such an exercise.

The ubiquity of the Internet has enabled most organizations to conduct this exercise online. Form administrating the questionnaire to generating the report, the entire exercise can be driven via the internet. This not only saves time but also reduces the margin for error and increases accuracy.

The wide usage of this tool results from its usefulness in evaluating behavioural aspects of an employee’s performance, especially at the senior management levels. At a leadership position a person’s behaviour and attitude are more critical. Good performance is a given owing to his rank and position in the company. A multi rater feedback can be used for various purposes. It may be used to identify high potential employees for senior management roles.

It may be used to improve team performance and dynamics. It is often used to as an exercise of business strategy and cultural change. This means that when an organization wants its employees to exhibit certain attitudes so that a certain culture can be inculcated in the organization, a 360-degree feedback may be conducted to evaluate an employee on those behaviours and then help them bridge the gap, if one exists. In the middle management it may be used for individual development of employees and grooming them for the next step on their career ladder.

The offshoots of a 360-degree program are learning and development initiatives in order to enhance the employee’s existing skill and develop the dormant ones. Depending on the skill deficit of the organization as a whole, training programs can be tailored to develop specific skills and competency. A 360-degree has nothing to do with actual accomplishment of organizational tasks or activities (in terms of Key Result Areas). Thus it finds its use in employee development.

On the basis of his scores, an individual development plan (IDP) is prepared. It contains the course of action an employee must take in order to improve or further develop a competency. It may include the performance of certain activities, attending training program or even reading some books or literature. The IDP clearly attaches responsibility to the person who is responsible for the course of action. Generally it is the assesee’s responsibility to perform the mentioned activities in order to bring out the desired change. However, the onus may also lie on one’s manager to help the assesse in his development areas. A target date for achievement of the said course of action also features in an IDP.

A 360 degree feedback can provide immense benefits if administered in the right manner. A careful analysis must be done in order to determine whether the exercise must be conducted internally or outsourced. The cost, number of employees under the survey, level in the organization, use of the survey is certain considerations while deciding the same.

This tool holds immense potential to bring about change and development in an organization. While its use for performance appraisal purposes vis-a-vis development purposes is controversial and debatable, once cant deny its benefits owing to the fact that about 90% of the Fortune 500 companies employ some form of 360 degree feedback in their organization.

This article has been authored Vyoma Vegad from Goa Institute of Management.

Image: FreeDigitalPhotos.net

Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.

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