360 Degree Performance Appraisal

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360 Degree Performance Appraisal
Posted by Farhaan Panagar on Jun 18, 2009 | 7 Comments The meaning of the word ³appraisal´ is ³to fix a price or value for something´. This is used in finance in terms such as project appraisal or financial appraisal where a value is attached to a project. Similarly performance appraisal is a process in which one values the employee contribution and worth to the organisation. Employees across the entire organisation are appraised of their performance. This could be done annually, twice a year, periodically depending the need of the organisation. Performance appraisal is a systematic and orderly evaluation of performance of employees at work by their superiors or others who are familiar with the techniques of performance appraisal. A performance appraisal is a formal review of employee performance. At a performance appraisal, objectives or targets are agreed between manager and employee. At each subsequent appraisal, current and past performance is compared and targets are reviewed. Performance appraisals are essential for the effective management and evaluation of staff. Appraisals help develop individuals, improve organizational performance, and feed into business planning. Formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by their line manager. Performance appraisals are also essential for career and succession planning. Performance appraisals are important for staff motivation, attitude and behaviour development, communicating organizational aims, and fostering positive relationships between management and staff. Performance appraisals provide a formal, recorded, regular review of an individual¶s performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations.

360

DEGREEE

PERFORMANCE

APPRAISAL

In 360-degree performance reviews, many different types of people are consulted about an employee¶s performance. This includes customers, suppliers, peers and direct reports. In the case of a manager, employees are often asked to give ³upward feedback´ on how well they are being managed. If 360-degree performance reviews are performed, a Human Resources manager should coordinate the process, so that subordinate reviewers (i.e., employees) are assured that their performance reviews are kept anonymous.

The aim is to find the gap between one¶s own appraisal and the perceptions of others. This will in turn enable a professional to analyse his strengths and shortcomings and accordingly improve his performance. While it is true that the system serves as an excellent process since it reduces biases, it is not always successful. It is necessary to create the right culture in the company before introducing the system. If many people are unhappy or their morale is low, the situation can turn disastrous as some staffers will become obvious targets. ADVANTAGES OF 360 DEGREE APPRAISAL Provides a more comprehensive view of employee performance. Increases credibility of performance appraisal. Feedback from peers enhances employee self-development. Increases accountability of employees to their customers. The combination of opinions can approximate to an µaccurate¶ view Comments expressed by several colleagues tend to carry weight Some skills are best judged by peers and staff, not by manager alone Feedback may be motivating for people who undervalue themselves The wider involvement help to engender a more honest organizational culture DISADVANTAGES OF 360 DEGREE APPRAISAL Time consuming and more administratively complex. Extensive giving and receiving feedback can be intimidating to some employees. Requires training and significant change effort to work effectively. Results can be difficult to interpret Feedback can be damaging unless handled carefully and sensitively Can generate an environment of suspicion if not managed openly and honestly

y y y y y y y y y y y y y y y

The 360-degree appraisal significantly differs from the traditional supervisor-subordinate performance evaluation. Rather than having a single person play judge, a 360-degree appraisal acts more like a jury. The people who actually deal with the employee each day create a pool of information and perspectives on which the supervisor may act. This group of individuals is made up of both internal and external customers.

Using 360-degree appraisals provides a broader view of the employee¶s performance. The most obvious benefit of the 360-degree appraisal is its ability to corral a range of customer feedback. Because each customer offers a new, unique view, it produces a more complete picture of an employee¶s performance. Unlike with supervisors, employees can¶t hide as easily in 360-degree appraisals because peers know their behaviors best and insist on giving more valid ratings. In addition to providing broader perspectives, the 360-degree appraisal facilitates greater employee self-development. It enables an employee to compare his or her own perceptions with the perception of others on the employee¶s skills, styles, and performance.

PEER-TO-PEER

EMPLOYEE

PERFORMANCE

EVALUATIONS

Peer-to-peer employee performance evaluations require employees at the same level to review each other. The thinking behind peer-to-peer employee performance evaluations is that nobody knows a worker¶s ability better than his or her co-workers. While this can be an effective review format for some groups of workers (for example, a team of doctors working on a research project together, where specific content knowledge is required), it can also cause controversy because of the way it affects future group dynamics. When evaluating the use of these types of employee performance evaluations, consider the maturity level of the employees involved and the long-term effects that could result from the source of negative reviews getting back to the team members. SELF-ASSESSMENT PERFORMANCE REVIEWS

Self-Assessment performance reviews are effective when combined with any of the other three types of performance reviews. With this type of review, employees are asked to rate themselves, often using the same form that a manager will use to review them. Self-assessment performance reviews help make the employees an active part of the process and provide a vehicle for them to reflect on their own performance prior to the formal review. Studies have shown that employees are usually harder on themselves in self-assessment performance reviews, than their managers and generally give themselves lower ratings. Having employees do self assessment performance reviews prior to a manager¶s review can set a positive tone for the meeting, as the manager will often have better things to say than the employee has said about him or herself. DOWN TO TOP EMPLOYEE PERFORMANCE EVALUATIONS

Down-Top employee performance evaluations tend to be one of the most common and most effective method, because they involve the assessment of an employee by its subordinate. Down to top employee performance evaluations are most useful when given by an employee¶s immediate subordinate ± someone who works with that employee everyday and knows his or her strengths and weaknesses. The Down-Top employee performance evaluation becomes less effective when given by a Human Resources manager who has only second-hand knowledge of an employee¶s performance. TOP ± DOWN EMPLOYEE PERFORMANCE EVALUATIONS

Top-down employee performance evaluations tend to be the most common and most effective, because they involve the assessment of an employee by a direct manager. Top-down employee performance evaluations are most useful when given by an employee¶s immediate supervisor ± someone who works with that employee

everyday and knows his or her strengths and weaknesses. The top-down employee performance evaluation becomes less effective when given by a Human Resources manager who has only second-hand knowledge of an employee¶s performance. One offshoot of top-down employee performance evaluations are ³matrix´ employee performance evaluations, where multiple managers rate the same employee. This is a good choice when the employee works for multiple managers, or engages in various fixed-time length projects

Arguments Against 360 Degree Performance Appraisal
Appraisals Home » Arguments Against 360 Degree Performance Appraisal

Despite the widely used performance experts and technique of are:

fact that 360 degree appraisals are being throughout the world for appraising the of the employees at all levels, many HR professionals argument against using the 360 degree appraisals. The main arguments

y 360 performance rating system is not a validated or corroborated technique forPerformance appraisal. y With the increase in the number of raters from one to five (commonly), it become difficult to separate, calculate and eliminate personal biasness and differences. y It is often time consuming and difficult to analyze the information gathered.

y

The results can be manipulated by the employees towards their desired ratings with the help of the raters.

y

The 360 degree appraisal mechanism can have a adversely effect the motivation and the performance of the employees.

y

360 degree feedback ± as a process requires commitment of top management and the HR, resources(time, financial resources etc), planned implementation and follow up.

y

360 degree feedback can be adversely affected by the customers perception of the organisation and their incomplete knowledge about the process and the clarity of the process.

y

Often, the process suffers because of the lack of knowledge on the part of the participants or the raters.

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees¶ performance comes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedbackregarding the "on-the-job" performance of the employee. 360 1. 2. 3. 4. degree appraisal has Self Superior¶s Subordinate¶s Peer four integral components: appraisal appraisal appraisal appraisal.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior¶s appraisal forms the traditional part of the 360 degree performance appraisal where the employees¶ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior¶s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees¶ abilities to work in a team, co-operation and sensitivity towards others.

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degreePerformance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review" of the employees¶ performance and is considered to be one of the most credible performance appraisal methods. 360 degree performance appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others¶ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and Reliance Industries etc.

Traditional performance appraisals, as discussed above, can be both subjective and simplistic. At times, they can also be deemed to be ³political´. In an attempt to improve this methodology, some companies have turned to 360-degree appraisals. 360 appraisals pool feedback from a department¶s internal and external customers to ensure a broader, more accurate perspective of an employee¶s performance. 360-degree performance appraisal is an attempt to answer the question: ³How can a supervisor evaluate an employee he or she sees only a few hours each week?´

Using internal and external clients
360-degree performance appraisals offer an alternative by which organizations may gain more useful performance information about employees. Because all clients/customers an employee comes into contact with can conceivably have input into the performance appraisal, this methodology can also makes them more accountable to their customers. Using a courtroom metaphor, one could say that, rather than having a single person play judge, a 360-degree appraisal acts more like a jury. People who actually deal with the employee each day have an opportunity to create a pool of information from which the appraisal is written. Internal clients may include supervisors, subordinates, co-workers, and representatives from other departments. External customers may include clients, suppliers, consultants and customers.

Perceived fairness
Given the use of a wide variety of sources for information in the 360-appraisal process, this method provides a broader view of the employee¶s performance. Frequently, the employee on whom the appraisal is being done (the ratee) will feel that the process is more fair.

Validity
Very often, an employee¶s peers know their behaviors best. Consequently, employees cannot hide as easily in 360-degree appraisals.

Employee development
360-degree appraisal enables an employee to compare his or her own perceptions of their work performance with the perception of others. As such, the method facilitates employee self-development. Feedback from one¶s peers is more likely to lead to changed behaviors.

Accountability to customers
A 360-degree appraisal process provides a formalized communication link between the employee being evaluated and their customers. These people now have feedback into the employee¶s performance rating. As such, the process is likely to make the employee more accountable to his or her various internal and

external customers. Furthermore, organizations can also use this feedback to create more customeroriented goals for the following year.

The raters: how many and who?
One issue employers must solve in implementing a 360-degree appraisal program is determining how many raters should be involved. Next, the organization must decide who should do the rating. Generally speaking, less than five raters limits the perspective while more than ten raters is likely to make the appraisal system complex and time consuming. A firm would be well advised to develop a workable definition of what constitutes a peer, an internal customer, an external customer, a supervisor, etc. For example, to be useful, the customer ought to be one who has significant interactions with the ratee. Some organizations permit the ratee to develop a list of key internal and external customers that he or she interacts with. The ratee then recommends five to ten of these individuals to serve as raters. In this process, the supervisor still retains the ultimate responsibility for the appraisal and therefore ensures that appropriate raters are selected. The ratee is thus prevented from stacking the deck with supportive customers. Another option has the raters selected at random from the ratee¶s team by a computer-generated system. Those selected are then notified by E-mail to participate in the appraisal.

Limitations on the use of external clients
An organization contemplating the use of the 360-degree process must keep in mind that reviewing that organization¶s employees¶ performance is not the customer¶s business. To ensure the customers¶ cooperation, the process should be a mutually beneficial process. Furthermore, the various external customers would ideally evaluate the ratee only on the behaviors or work incidents that they have directly observed. This, of course, also holds for internal raters.

Summarizing the data
Once all raters have supplied their appraisals, the employee¶s supervisor is generally responsible for summarizing the data and determining the final performance rating. After summarizing the data, the supervisor conducts the formal appraisal interview with the ratee. Another variation of the summary process makes the ratee responsible for summarizing the feedback data from the raters. The ratee then submits a summary analysis to his or her supervisor. The ratee and the supervisor then meet to determine the ratee¶s final performance rating and development plan.

Rater confidentiality
Organizations must decide whether the feedback from the various raters should be kept anonymous or be identified to the employee. Sometimes raters give fuzzy feedback because of the fear that the feedback might come back to them. One rule rule might be that no rater can give negative feedback in the appraisal unless that rater has previously given the feedback directly to the ratee. Most organizations should start with a policy of confidentiality until sufficient understanding, maturity and organizational trust is achieved

Advantages Of 360 Degree Appraisal
Advantages of 360 degree appraisal

1. For employees
‡ Can uncover hidden lights and blind spots. ‡ Feedback coming from a number of different people is more likely to be accepted. ‡ Helps individuals gain a realistic view of how others perceive them. ‡ Inspires people to take ownership of their own learning and development. ‡ Provides feedback in a quantifiable form on a structured range of behaviors.

2. For the team:
‡ It helps people understand how their behavior influences both their own personal effectiveness and how they impact the smooth running of the organization. ‡ Supports teamwork by involving team members in the development process. ‡ Increases communication between team members. ‡ Higher levels of trust and better communication as individuals identify the causes of breakdowns. ‡ Increased team effectiveness.

3. For the organization:
‡ Better career development planning and implementation for employees. ‡ Improves customer service by having customers contribute to the evaluation process. ‡ Reinforced corporate culture by linking survey items to organizational leadershipcompetencies and company values. ‡ Helps with training needs analysis.

Tracy M.
Senior Manager, HR Operations at LEGO
see all my questions

What are the pros and cons of using 360 feedback as part of the performance appraisal process?
posted March 20, 2009 in Organizational Development, Compensation and Benefits | Closed Share This

Answers (10)
Laura L. Learner-focused design that impacts the bottom line.
see all my answers

Pro - feedback from people in various strata of the organization; a more well-rounded set of feedback from which to grow and learn Con - those people might not really know you and what you do well enough to provide meaningful feedback, might have bizarre, unfair, or uneducated expectations, and/or might not be skilled in providing *constructive* feedback
posted March 20, 2009

Paul J.

Mediator and HR Consultant
see all my answers

Pro - It is important to get feedback from all angles in order to know what you do well and what to change. Con - Most employees do not understand how to give quality feedback and most people don't know how to receive and use feedback. What you can end up with is a group of people focusing on the negatives and some feeling bullied or harassed. Going in after this atmosphere has been created is my bread and butter. I see it all the time. If you're thinking of introducing 360's be sure to deliver feedback training to all participants.
posted March 20, 2009

Dilip N. Visiting Faculty at Symbiosis Centre for Management And Human Resource
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Theoretically 360 feedback is expected to give a balanced & objective feedback. However an important prerequisite for its success is that the organization must have a learning culture where both the person reported upon and the persons who are assessing the individual must be mature and supportive respectively. The HR as well as the management must communicate the purpose and value of this appraisal system convincingly. This will rule out personal bias and prejudice that may occur in the course of job performance of the person being appraised. An expert study conducted worldwide by Watson & Wyatt Group states that if the prerequisites mentioned above are not present in an organization it results in negative productivity and drop in market valuation of the company. Thanks.
posted March 20, 2009

Susan B. Leadership Psychologist & CEO, Battley Performance Consulting
see all my answers Best Answers in:Change Management (1)... see more

Hi Tracy, More than 80% of Fortune 500 companies - and many nonprofit and public sector organizations - now use some form of 360-degree feedback process. Many use this 360 feedback as part of their performance appraisal data. Pros include: -Ability to collect data from multiple perspectives/raters so that the participant's performance is not overweighted in terms of one person's (manager) opinion. This can be especially important when a person's immediate manager is not onsite (or even in the same country) or there's significant manager turnover. -Ability to obtain actionable information that the participant can use to become better faster in the areas that are most critical to success in his/her role and responsibilities. -Fairness and organizational impact. Ability to use a standardized process as part of making compensation, advancement and succession planning decisions. Caveats include: -The 360 tool should assess performance dimensions that have been identified as necessary, relevant and desired skills and behaviors, as in an established organization-specific or title-specific competency model. -The competency model(s) should be published and discussed in advance of 360 administration to ascertain that everyone - 360 participant and raters - understands what the performance dimensions mean and why they are important. -The rating scale should be explained in advance so that raters understand what actually constitutes "Effective" "Outstanding" and "Unsatisfactory" performance levels. -The purpose of the 360 survey should be communicated up front so that everyone understands how the feedback will be used. NOTE: Often, the first iteration of a new 360 feedback program is for development purposes - not performance management - so that those involved can familiarize themselves with the process. (This is my firm's approach to designing 360 programs for companies, and a best practice to orient and engage people to the value of 360 feedback.)

-If a participant has a small number of raters, then rater confidentiality may not be possible. -A participant might "stack the deck" if he/she can nominate the raters without review by a manager or HR professional. Rater selection/inclusion criteria are therefore important to establish and monitor.

I find that a key concern in some organizations or departments can be about fear of reprisal among a participant's direct reports if they are completely candid in their responses. So it is important to discuss rater confidentiality and any limitations to same in advance in a general briefing session. In summary, how the 360 program is launched is especially important to managing people's understanding and expectations of its value, and in getting accurate, high-quality feedback. And the 360 survey items need to capture and reflect what has *already* been communicated to the participant as critical to his/her performance. Wishing you much success.
posted March 20, 2009

James H. Leadership Development at Erie Insurance Group
see all my answers Best Answers in:Organizational Development (7)...see more

I see three advantages to using 360 feedback as a tool for both development and appraisal. (1) Cost advantage of one tool meeting two needs, (2) Direct link from appraisal to development, (3) Broader range of input than manager-only appraisal process. Conversely, I see the top 3 disadvantages as (1) Overly broad or inexact evaluation criteria in the tool, (2) Low rater reliability due to culture, either too harsh or too soft, (3) Low rater reliability due to time commitment to do multiple 360s.
posted March 20, 2009

Anna E. Director Consulting Services for Questar Global Survey Research
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360-feedback can be a great way to provide accountability to and input from those the employee works closely with daily. However, it does not work well to use the same tool for development and performance appraisal input. 360 scores are usually very high - but are even higher when the boss gets a copy of the report and/or when the input is being used for performance appraisal. When used purely for development and when this purpose is clearly communicated, raters are usually more honest in their assessments. I would also recommend different and shorter content when using it for appraisal input as opposed to purely development. Good luck with your program! Anna Erickson www.questaroig.com
posted March 20, 2009

Karen C. President, KLC Associates --Organization and Management Consulting
see all my answers Best Answers in:Organizational Development (19)...see more

Hi Tracy My experience is that processes in which 360 feedback is actually incorporated into the final rating ± not just the manager¶s assessment -- are very powerful in improving performance on the individual, group and organizational levels, and creating a cohesive culture. Where we have successfully implemented such a process, here are some key benefits clients have cited: > It surfaced people who were adept at 'upward facing' but treated their subordinates and internal (or external)

customers badly and/or had weaknesses in developing and fully utilising the talents of their subordinates. (Conversely it identified people who were very good at all of the above -- which in many cases, had not been recognised). > It identified the extent to which people collaborated cross-functionally with peers in achieving objectives. This was particularly important in mid-to senior management levels. This also highlighted areas in which there turned out to be conflicting functional objectives and targets or other organisational disconnects. > In companies which had, or were trying to develop, strong branded cultures with values-driven behaviours, it again provided a very holistic set of feedback around the extent to which these behaviours were demonstrated. > It surfaced a number of more general organisational issues in areas such as communications, decision-making, information flow, response to problems, etc. A great deal of thought needs to go into what is measured in the process and how it is conducted. Also, to what extent inputs may be weighted. For instance, are the experiences of subordinates or customers given less, the same, or more weight than assessments by a person's direct manager? To avoid a key pitfall Laura mentioned, it is important to identify what specific constituencies/roles/people will participate in providing the feedback. They MUST be people who interact (or should interact) directly with the PA recipient. This is another very timeconsuming element ,at least in the first year of implementation. If feedback will actually be incorporated into the PA and rating, it is necessary to custom tailor the 360. For our projects, these have typically included the individual's objectives as well as any values-driven behaviours the company wants to see expressed. Another thing to look at and decide how to manage are areas which are not at all relevant to particular constituencies. In terms of the feedback process, what is usually quite unproductive, even damaging -- for the reasons outlined by both Laura and Paul -- is to ask groups or individuals to directly give feedback to the recipient (particularly in a large group setting). What our clients have done is to ask for written feedback from the identified constituencies -- either in a survey form or online -- and then synthesise the inputs by groups (i.e., manager, matrix if one exists, peers, subordinates, internal customers. Whether online or written, it is important to think about wording of questions -- so that you generate evidence based observations and assessments -- and whether you also want to use a rating scale. The suvey/online questions and synthesis were handled by either an OD resource and/or HR. Once the feedback is synthesised, the manager giving the PA discusses the feedback and ratings with the recipient. As already has been commented on, it is very important that all supervisors and managers involved in PAs have training and coaching. We also encouraged and facilitated (then trained internals to facilitate) workshops with the recipients and various constituencies to better understand feedback and agree actions to address issues. The need for this decreased as time went by and informal communications and relationships improved.
posted March 20, 2009

Peter R. CEO at Team Management Services
see all my answers Best Answers in:Organizational Development (3)...see more

My answer is based on 14 years experience of reviewing and facilitating hundreds of 360 profiles and training trainers in the facilitation of 360 profiles. It is fair to say I am bias in favour of the positive value of 360 profiling. Top pro ± participant¶s attitude and behaviours are improved via the development of strengths and the acknowledgement and reduction of areas that require improvement. Top con ± The 360 process can sometimes be seen by senior managers as a goal in itself (a box ticking exercise) ± the true goal of 360 profiling should be the personal development of the individual involved leading to improved performance. The 360 process is simply a tool or the means by which we get there. The majority of cons raised above are valid but can be nullified if the process is conducted correctly. One of my best weapons against 360 objections is the effective use of the following statement; ³it is the collective view that we are seeking to understand, agree with and act upon´ If the profile and process that is used is sound and a participant only takes note (good or bad) of the collective view represented in the profile you will successfully identify key themes that become the opportunities for personal

development. Focus on none collective responses (outliers scores) is at worst a waste of time and effort at best an unnecessary distraction. To learn more about great 360 tools with an accompanied effective process that ensures success go to the links below. Cheers Pete Robinson TMS NZ y y y
Links: http://tms.co.nz/index.htm http://www.tls360.com/ Peter R. also suggests this expert on this topic: Paul R.
posted March 23, 2009

Dave K. Principal at HR-ROI Solutions
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Hi Tracy: Good to hear from you. Hope all is well with you. The assignment with LAZ has ended. They filled the position with their Labor Atty. I woould suggest youcheck out the article in Business Week (March 23) on the use of Twitter to have 360's. I think making it (360's) more immediate, frequent, and goal focused.....are better than the classic stress related...once per year event. Frequency allows the boss to become more of a coach/mentor. Best Dave
posted March 24, 2009

Kiana P. Experienced HR Generalist
see all my answers Best Answers in:Personnel Policies (2)... see more

Pro - Employee recives information from both sides. The more information you have the more you can understand how your job fits into the organization, your strenghts and weaknesses. Con - People are catty and not always experienced to give proper feedback.

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