360-degree Feedback:
Weighing the Pros and Cons

By Terri Linman


360-degree Feedback, or multi-rater feedback, was used by 90% of Fortune 500 companies last year (Carruthers, 2003). It is generally believed to be a highly effective performance evaluation tool yet there are many who doubt its benefits. Considering factors for the success and the failure of this popular method will provide guidelines and suggestions for its use.

360-degree Feedback Definition

360-degree feedback is an evaluation method that incorporates feedback from the worker, his/her peers, superiors, subordinates, and customers. Results of these confidential surveys are tabulated and shared with the worker, usually by a manager. Interpretation of the results, trends and themes are discussed as part of the feedback. The primary reason to use this full circle of confidential reviews is to provide the worker with information about his/her performance from multiple perspectives. From this feedback, the worker is able to set goals for self-development which will advance their career and benefit the organization. With 360-degree feedback, the worker is central to the evaluation process and the ultimate goal is to improve individual performance within the organization. Under ideal circumstances, 360-degree feedback is used as an assessment for personal development rather than evaluation (Tornow, W., 1998). Unfortunately, not all circumstances are ideal.

Factors Linked to Success

Organizations who experience success with the 360-degree feedback methods have many environmental attributes present. Some of these are:

  • Organizational climate fosters individual growth
  • Criticisms are seen as opportunities for improvement (Randel, A., 2004)
  • Proper framing of feedback method by management
  • Assurance that feedback will be kept confidential
  • Development of feedback tool based on organizational goals and values
  • Feedback tool includes area for comments (Hoffmanner, A., 2004)
  • Brief workers, evaluators and supervisors about purpose, uses of data and methods of survey prior to distribution of tool
  • Train workers in appropriate methods to give and receive feedback
  • Support feedback with back-up services or customized coaching


Factors Linked to Failure

Many organizations have rushed into 360-degree feedback without laying the foundation for success. Typical errors include:

  • Feedback tied to merit pay or promotions
  • Comments traced to individuals causing resentment between workers
  • Feedback not linked to organizational goals or values
  • Use of the feedback tool as a stand alone without follow-up
  • Poor implementation of 360-degree tool negatively affects motivation
  • Excessive number of surveys are required of each worker with few tangible results provided to individuals (Clark, S., Whittall, A., 2003)

Dr. John Sullivan, of San Francisco State University, states his concerns about 360-degree feedback:

"There is no data it actually improves productivity, increases retention, decreases grievances or that it is superior to forced ranking and standard Perormance Appraisal systems. It sounds good but there is no proof it works other than a lot of companies have tried it."


Weighing the Pros and Cons

Reviewing comments from practitioners and corporate use of this method will provide further understanding of the pros and cons of 360-degree feedback. Alan Hoffmanner (personal communication, February 1, 2004) of AGILEdge, has facilitated the use of 360-degree feedback programs with dozens of companies. He lists many positive results to using the 360-degree method:

"I received frequent feedback that it had an overall positive effect on the organization since as employees broadly evaluated their managers on people, personal effectiveness and attitudes; it raised the consciousness on these issues such that they observed changes/improvements in their culture/relationships..."


Hoffmanner's comments are supported in the literature (Tornow, 1998, Heathfield, S., 2001) that highlight the human benefits of "connectivity" where workers feel more linked with each other as a result of focusing on common goals for the benefit of the organization.

A. Randel (personal communication, January 26, 2003), formerly of Hewlett-Packard and Agilent Technologies, distributed 360-degree surveys frequently and rarely had any surprise information revealed. Typical comments received showed respect and appreciation of co-workers but seldom any negative remarks. This perplexing result can be explained by the open methodology of the survey (they were not confidential), and the fact that the workers usually made their complaints verbally to her. Organizational climate indeed plays a large role in the effective use of this assessment tool (Tornow).

IBM provides an interesting example highlighting a shift in use of assessments. Until recently, IBM used 360-degree feedback as part of their annual performance review. This practice was halted as the reviews had become politically charged and were no longer reliable. Since IBM appreciated the value of multiple perspectives, a new employee satisfaction survey was implemented to regain the benefits found in using the survey without the pitfalls (Carruthers, and Hoffmanner).

Conclusion

The popularity of 360-degree feedback is undeniable. Yet, the perceived benefits will help the personal development of workers only in the right organizational climate. When this method is utilized in the wrong environment, the results can be detrimental. With close consideration and evaluation of the environment, the decision to employ this tool, or another, should be made carefully.

References

Carruthers, F. (2003, November 14). Nothing but the truth. Australian Financial Review, p. 78.

Clark, S., Whittall, A. (2003, August 17). Performance management develops productivity. Winnipeg Sun. Retrieved from http://web.lexis-nexis.com/universe/document on January 28, 2004.

Heathfield, S. (2001, April 25). 360 degree feedback: the good, the bad and the ugly defines and examines multirater feedback. Retrieved from http://humanresources.about.com/library/weekly/aa042501b.htm on January 26, 2004.

Shaking things up. (2003, October 8). Editor, Retrieved from http://www.trainingmag.com/training/index.jsp on January 28, 2004.

Sullivan, J. (1998). HR program evaluation template: 360-degree feedback. Retrieved from http://www.drjohnsullivan.com/articles/1998/net12.htm on February 2, 2004.

Tornow, W., London, M. (1998). Maximizing the value of 360-degree feedback. San Francisco: Jossey-Bass Inc.

Author Note

Terri Linman~ tlinman@cox.net

 

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