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January 01, 2000
360 Degree Feedback: Pluses and Minuses
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re is no shortage of experts in books or at HR conferences singing the praises of 360 degree feedback. But, as many HR managers have discovered, how you do it is more important than doing it. Implementing this technique without a clear plan and active monitoring can make it a negative for your organization.

"Switching to a 360 degree feedback system can improve teamwork, facilitate better communication and boost productivity", said Dave Gartenburg, a Rohm and Haas leadership and organization effectiveness staff consultant who created the chemical conglomerate's multi-source feedback guidelines. The process involves "going around" employees; asking their supervisors, direct reports, peers and clients about their performance.

But switching from a traditional top-down feedback system is no easy task. The most difficult change is enlightening managers about its effectiveness and garnering their commitment. "Education is key" says Gartenburg. Another is the fact that 360 feedback sometimes doesn't have to be mandatory. If the managers at the top of business units aren't committed to it, some companies don't make them use it. Companies using this approach hope that other managers will share their success stories, thus getting other units to switch to this all-around method of appraisal.

Here are some of the reasons why more organizations are adopting 360 degree feedback:

  • Feedback that comes from a variety of sources gives a better picture of individuals' performance development needs.

  • Overall company performance will improve when employees' goals and areas of improvement are more accurately identified from a wider perspective.

  • Multi-source feedback pays off as decision-making authority is pushed lower and lower in the organization.

What steps do you need to take?

The first task is to design a feedback instrument that captures the most beneficial data. One way to do this is to develop a questionnaire with key values and skills. Then a focus group of different levels of employees and groups meets to "test" these values out.

The second and third steps are to find out who interacts with the managers, and collect the data. One approach using MIS resources is to ask managers which subordinates they interact with. After you collect the data, strip the names of the respondents off and share the results with the individual managers. A less formal approach involves informal meetings between managers and their subordinates, either using a facilitator or an workbook instrument such as the Kouzes/Posner "Leadership Practices Inventory (LPI)".

But how effective is 360 degree feedback.

A recent study about HR practices, the Watson Wyatt Human Capital Index study, found that 360 degree feedback can be counter-productive in some situations. In fact, the study concluded, the practice might produce negative returns for shareholders.

Some incidents from companies give dimension on why 360 degree feedback can be a negative, even when the basic concept, getting feedback on managers from all sources, seems so sound. In one company most of the managers loathed the practice, and resisted cooperating. For some managers meeting with their subordinates and discussing what the boss needed to improve was too alien and frightening a concept. For others, there was insufficient training in how to use the process, thus dooming it from the beginning.

One manager in a large Wall Street bank had nothing but contempt for the process, particularly the part relating to peer review: "Once a year we have to go around and ask somebody for a peer review. It's either screw your buddy or kiss up to them. Nobody picks someone they are not tight with. The whole process is ridiculous".

Another question we've seen is whether 360 feedback should be part of the compensation equation. One answer was succinct: once you've included it in the review, of course it's related.

How to make 360 degree feedback work for you

  • Think through how you are going to develop the process. What do you want to accomplish?

  • Get key stakeholders to buy into the process. If they help you develop the program, they'll be part of it.

  • Train everyone on the process - from top managers to subordinates. Explain how it is going to help, and train everyone how to improve their listening skills and avoid being defensive.

  • Hold managers accountable for listening, responding, changing. Build a follow-up step for managers into the process.

  • Review how the program is going. Adjust to fit your culture and the realities or your organization.

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