"Understand thyself, improve thyself and then improve the bottom line" is a pervasive notion in today's business world. At the root of this idea is self-awareness; in the business world this means knowing your strengths and weaknesses so you can play up the former and work on the latter.
Sixty-four percent of respondents say that they use manager and team feedback as methods to keep top performers engaged.
Source: Capital H Group survey, June 2005, of over 100 business leaders and HR professionals
Popular books like Good to Great ask companies to be self-aware in order to improve performance. The emotional intelligence movement, perpetuated by international bestsellers like Primal Leadership, asks the individual to do just the same. It is this context that made the 360 degree feedback process as popular as it is.
The 360 degree feedback process, also known as multi-rater or multi-source feedback, involves participants receiving feedback from all the constituents of their work life (i.e. supervisors, direct reports, peers and customers). While there are other types of performance management, this full-view is intended to promote complete self-awareness and, in turn, improved performance. But with all the hype around 360s as a magic potion for performance improvement, HR is left with many questions on what is the truth and what is a myth. With this in mind, the following will provide a clearer understanding around the what, why, when and how of the 360 degree feedback process.
- 360 degree feedback is expensive and time consuming to implement.
Myth
Within this myth are two debates: "customised vs. off the shelf" and "web-based vs. paper-pencil, IVR or software." There is no doubt that the value of a customised, web-based tool is high. A customised tool allows the organisation to truly drive the behaviors necessary to achieve its specific goals. The benefits of web-based tools can be endless including automatic feed into a development plan and reports on the data in aggregate. But, as expected, this is the most expensive route. Off the shelf solutions can be a good, cost-effective introduction for companies just looking to promote a more feedback-oriented environment. Because they are standardised, some offer benchmarks against other companies. Organisations that have not yet implemented fancy technology (or have employees without access to technology) may not find web-based tools useful. The key is to get the quality, cost and ease of use formula right for the organisation.
- It is better not to initially connect the 360 degree feedback process with compensation decisions.
True
In the first one or two cycles of multi-rater assessments, raters will be more honest if they know the feedback does not affect compensation. Ratees, knowing that the feedback is as honest as possible, will accept it more readily and drive change more effectively. Also, the process will foster more dialogue and openness which further reinforces behavioral change. Finally, there can be controversy over allowing peer reviews to play into compensation decisions. Above all, it is critical to be clear and honest about the purpose of the process with participants. Trust issues can skew feedback results.
Over time, however, once employees become comfortable with giving, receiving and accepting feedback through a 360 degree process, adding this as a component of the annual performance management process can actually improve the process. It is important however, to first establish a culture of giving, receiving and accepting honest feedback.
- A 360 degree feedback will change behavior.
Myth
Unfortunately, gaining the benefits of the process is not fail safe. The process may not be as effective at changing behavior as promised if the following is not in place:
- Thorough and clear communications and training:
Communicate why this process is being implemented and why it is important to ensure employees make it a priority, including how it fits among any pre-existing performance management systems. Train on how to participate in 360s and what to do with the feedback.
- Leadership backing:
The communication of leadership support is critical to the integrity of and participation in the 360 feedback process. It is critical at the time of roll-out and if the integrity or importance of the tool is ever called into question.
- Effective feedback delivery:
This involves both the timing and the method. It is important to give feedback in the promised timeframe and ensure that the timeframe is short enough to preserve its relevance. In addition, having someone (e.g. mentor, consultant, HR) assist the employee interpret the feedback can add much value to the process.
- Support in creating a development plan:
The most significant change will occur if identified areas for improvement are immediately turned into an improvement plan. Employees will also be more engaged in the entire process if they see that the organisation supports them in their actual development and not just the identification of the development areas.
- All salaried employees can benefit from the 360 process.
True
Involving only leadership in the process was the trend when 360s were first popular in the 90s. But today there are many reasons to include the entire employee population. The main purposes of the 360 degree feedback process are: foster a culture of feedback with the aim of improved performance, drive certain behaviors towards results that are important to the goals of the organisation and create better leaders to encourage both of the above. Even if an organisation just wants to think of the purpose as creating better leaders, ideally all employees would still participate. It is never too early to start developing leadership skills. However, some companies do limit the 360 degree process to leadership and management.
- Employees should have input into his/her raters.
True
The majority of companies use this process with the variation of allowing employees alone to decide the raters or allowing a supervisor to also add to the rater's list. The spring 2004 issue of Public Personnel Management had a research article, "Participant Input into Rater Selection: Potential Effects on the Quality and Acceptance of Ratings in the Context of 360-Degree Feedback," which thoroughly explored this issue. The article proposed that ratees who determine their raters perceive the process as more fair, the raters as more credible and the ratings as more acceptable and useful. Furthermore, the article proposed that ratees who have input and receive negative feedback set more challenging goals and have a higher level of job performance. However, they noted that rating inflation does often occur.
- Written comments are not as important as the numerical rating.
Myth
Some find the comments to be time consuming and are afraid of misuse. However, without comments, there is no context to interpret the ratings. It can be much more difficult to digest and make use of unexpected feedback. Comments are worth the time. Also, training raters upfront on the purpose and best use of the comment section helps reduce the risk.
A wide range of organisations are using a 360 feedback process. It does not suit any type of industry or organisational structure more than another. Rather, it suits an organisation that is committed to helping its employees in their effort to develop towards improved performance. However, if an organisation is not ready for a culture that values employee development in their talk and in their walk, the ROI on this investment will not be fully realised. This means having a culture of trust and one where time spent on development is valued. On the other hand, when an organisation is ready for this kind of culture, the 360 degree feedback process can be a powerful tool for change.