360 Degree Performance Appraisal

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360 Degree Performance Appraisal: A myth or fact By Miss Deepti Hariramani Lecturer in Management Dept. MAII !ollege" #ota I$ %&D'! I&$ Appraisal of performance is widely used in society. Parents evaluate their children, teachers evaluate their students & employers evaluate their employers. However, formal evaluation of employees is believed to have been adopted for the first time during the (irst )orl* )ar. At the instance of Walter Dill Scott the S Army adopted the +Man to Man, rating system for evaluating military personnel. During !"#$%!"&$ hourly paid wor'ers in industrial units were evaluated on the basis of rating scores. (his early appraisal system was called Merit %ating. )n the early *ifties, performance appraisal techni+ues began to be used for technical, professional & managerial personnel. Since then tremendous changes have ta'en place in the concept, techni+ues & philosophy of employee appraisal. (his changes have been summari,ed in (able ! a-le . ren*s in Performance Appraisal )tem !. (erminology #. Purpose *ormer -mphasis /erit%0ating Determine wage )ncrease, promotion, (ransfer, layoff &. Application 2. *actors 0ated 3. (echni+ues *or ran' & file Wor'ers Personal (raits 0ating scales with -mphasis upon scores *or managerial & technical personnel Performance, results etc. /utual goal% setting, critical incidents, group appraisal. Present *ocus Performance Appraisal Development of individual, improved 1ob performance

4. Post Appraisal )nterview

Superior 5ommunicates his rating to the suborn% %innate & see's to have the employee accept the rating

Superior stimulates emp% loyee to analy,e himself & set down goals with the help & counsel of the superior

)n the recent years &4$ Degree Performance Appraisal became very popular. )t became popular as it has been felt for long years that one persons assessment of another individual cannot be free of biases.360 Degree Performance Appraisal is Multirater Assessment / (ee*-ac0 1ystem 2MA(13. )n this system the candidate is assessed periodically by a +!ircle, of assessors including his boss, immediate subordinates, colleagues, internal customers & e6ternal customers. (he assessment is made on a +uestionnaire specially designed to measure behaviors considered as critical for performance. (he raters limit their evaluations to 1ob behaviors that they have directly observed. *or e6ample, subordinates might be as'ed whether the manger7% 8 *ollows up on problems, decisions & re+uests in a timely manner. 8 Shares information when appropriate. 8 Provides subordinates with coaching when needed. 8 -valuates subordinates fairly. &4$ degree appraisal has four integral components7 !. Self appraisal #. Superior9s appraisal &. Subordinate9s appraisal 2. Peer appraisal. Self appraisal gives a chance to the employee to loo' at his:her strengths and wea'nesses, his achievements, and 1udge his own performance. Superior9s appraisal forms the

traditional part of the 360 *egree performance appraisal where the employees9 responsibilities and actual performance is rated by the superior. 1u-or*inates appraisal gives a chance to 1udge the employee on the parameters li'e communication and motivating abilities, superior9s ability to delegate the wor', leadership +ualities etc. Also 'nown as internal customers, the correct feedbac' given by peers can help to find employees9 abilities to wor' in a team, co%operation and sensitivity towards others.

Self assessment is an indispensable part of &4$ degree appraisals and therefore &4$ degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. )t provides a 43605*egree re6ie74 of the employee9s performance and is considered to be one of the most credible performance appraisal methods.

)hat is 360 *egree performance appraisal 8 )t is an assessment process used to improve managerial effectiveness by providing the manager with a more complete assessment of their effectiveness & their performance & development needs. 360 *egree performance appraisal is also a powerful developmental tool because when conducted at regular intervals ;say yearly. it helps to 'eep a trac' of the changes others9 perceptions about the employee9s. A &4$ degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. (his techni+ue is being effectively used across the globe for performance appraisals. Some of the organi,ations following it are Wipro, )nfosys, and 0eliance )ndustries etc. $ee* of 3605Degree Performance Appraisal in &rgani9ations <usiness is towards surplus generation. Without surplus no organi,ation can grow. Here the effort to grow the business and the surplus should come from employee part. (he performance of the employees is at wor' here matters in business development and organi,ational development. (he performance of the employees should then align with the strategic decisions that integrate the business goals in an increasingly competitive environment. )t is the responsibility of the H0/ to integrate the culture of the organi,ation with all available resources to the optimum out put. (he &4$ $ Appraisal helps the H0 Department to have better understanding of the competitive advantage and disadvantages of the current manpower resources and tune them towards performance e6cellence and productivity. Prere:uisites

8 (op /anagement Support ; 5onfidence of employees on the appraisal methodology ; =b1ectives need to be measurable with performance re+uirements clearly stated. ; A detailed plan of implementation ; 5ollaboration between superior and subordinates ; Some prior e6perimentation and positive e6periences, clear organi,ational philosophy and policy ob1ectives

Ho7 to Measure <mployee Performance8 (he most difficult part of the performance appraisal process is to accurately and ob1ectively measure the employee performance. /easuring the performance covers the evaluation of the main tas's completed and the accomplishments of the employee in a given time period in comparison with the goals set at the beginning of the period. /easuring also encompasses the +uality of the accomplishments, the compliance with the desired standards, the costs involved and the time ta'en in achieving the results.

/easuring employee performance is the basis of the Performance appraisal processes and performance management. Accurate and efficient performance measurement not only forms the basis of an accurate performance review but also gives way to 1udging and measuring employee potential. *or the purpose of measuring employee performance, different input forms can be used for ta'ing the feedbac' from the various sources li'e the superior, peers, customers, vendors and the employee himself. All the perspectives thus received should be combined in the appropriate manner and to get an overall, complete view of the employees9

performance. =bservation can also be e6ercised by the superior to obtain information. Some suggestions and tips for measuring employee performance are7 • 5learly define and develop the employee plans of action ;performance. with their role,

duties and responsibilities.

Also ta'e note of the s'ills, 'nowledge and competencies and behaviors of the )f possible, collect the feedbac' about the performance of the employees through multi% *inancial measures li'e the return on investment, the mar'et share, the profit generated *ocus on accomplishments and results rather than on activities.

employees that help the organi,ation to achieve its goals.

point feedbac' and self%assessments.

by the performance of the team should also be considered.

*or an organi,ation to be an effective organi,ation and to achieve its goals, it is very important to monitor or measure it9s and its employee performance on a regular basis. -ffective monitoring and measuring also includes providing timely feedbac' and reviews to employees for their wor' and performance according to the pre%determined goals and standards and solving the problems faced. (imely recognition of the accomplishments also motivates the employees and help to improve the performance.

)/P>-/-?()?@ &4$ D-@0-- P0=5-SS

Ho7 *oes 360 *egree performance appraisal help 8 8 0egular discussion of performance. 8 )dentification of strengths for career development. 8 )dentification of wea'nesses for training. 8 Salary recommendations. 8 A well designed performance appraisal system is associated with increased profitability. Ho7 3605*egree fee*-ac0 system a**s 6alue8 &4$ degree feedbac' enables an organi,ation to focus on developmental efforts, at the individual and group level, in the present business environment where the success of the company depends on continuous revolution, which is possible through organi,ational development. &4$%degree feedbac' facilitates the alignment of individual capabilities and behaviors with organi,ational strategies. )t adds value to the organi,ation indifferent ways7%


&4$%degree feedbac' provides a better understanding of individuals performance at wor'. &4$%degree feedbac' provides a multifaceted view about the employees from different sources. &4$%degree feedbac' provides increased understanding about oneAs role e6pectations. &4$%degree feedbac' provides increased understanding of competence and competency in various roles. &4$%degree feedbac' e6tends better morale to those who perform and contribute well to the organi,ation &4$%degree feedbac' reduces training costs by identifying common development needs. &4$%degree feedbac' increases the teamAs ability to contribute to the organi,ations goals. &4$%degree feedbac' helps everyone to wor' for a common standard and institutionali,e performance management. &4$%degree feedbac' ensure better interpersonal relationship and group cohesiveness. )t promotes better 5ommunication within departments. &4$%degree feedbac' )ncreases the teamAs ability to contribute to the organi,ations goals


o o


o o


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develop better bottom line through boosting the capability of the organi,ation to meet its ob1ectives. 1teps may -e ta0en to gauge the rea*iness of an organi9ation for 3605*egree:
o o o o o

)dentification of the problem. Analysis of the organi,ational conte6t for finding a solution to the problem. Allocation of resources for the purpose in terms of time and finances. A detailed plan of implementation. *ollow up.

Ho7 to ma0e effecti6e 360 Degree Performance Appraisal 8 (o ensure that the performance appraisal system does not violate principles of fair employment practices following steps should be ta'en7%

• • • • • • • • • • • • •

Bob related performance standards should be developed. Provide employees with a written copy of the standards before the appraisal. Standards must be based on observable or measurable behaviour. (rain the raters. Provide feedbac'. )mplement an appeal system to settle disagreements. Anonymous feedbac'. /anager involvement. Prevent gaming. Statistical techni+ues. Avoid & reduce biases. 5onducting appraisal interview. (raining to appraisers.

Ho7 to prepare for implementing 360 Degree Performance Appraisal 8 )t ta'es a lot of trust in an organi,ation and a lot of preparation before you can move from using &4$ Degree strictly for development purposes to using it for ta'ing decisions on promotions and rewards. /any companies are 1ust not ready. /ost current literature on ma'ing &4$ Degree effective as a tool for performance and leadership%style reviews have this to recommend. .. Begin 7ith De6elopment:5 )t is advisable to introduce &4$ Degree as an internal tool for personal development. @pioneered the use of &4$ Degree for over three years as a developmental tool and getting people used to it without seeing any change in the organi,ation. (he program too' root and began to be seen as integral part of the company9s functioning and value system only in the last few years. =ne good alternative is to focus on a single department or division that seems most ready for &4$ Degree. =. Lin0 7ith !ompany >oal:5

)t must be finally lin'ed to a significant business reason that is plain to everyone. 3. rain <6eryone:5 Do e6ecutives view this as a constructive or corrective processC )t9s human nature to rush to the negative feedbac'. (raining is re+uired to focus on the positives. ?. (ollo7 'p:5 (he feedbac' report should finally go into an action plan for improvement. (he superior and the H0 professional can help interpret the report so that the employee does not come up with a wrong action plan. (he action plan, as in the case of several contemporary companies, must eventually be tied to results as well as to the rewards and punishment systems of the organi,ation. @. !ompany !ulture:5 )n an atmosphere of downsi,ing, where everyone is afraid of their 1obs, it can also poison people about &4$ Degree that they never want to use it again. )n fact, &4$ Degree is most effective in a company which has a culture of learning and individual growth. nless some other development inputs are initiated to create a positive climate, &4$ Degree can be of very limited value to the culture change in that company. 6. Performance Inter6ie7s:5 Performance )nterviews are another step in the appraisal process once appraisal has been made of employees the raters should discuss & review the performance with ratee9s so that they will receive feedbac' about where they stand in the eyes of supervisors. *eedbac' is necessary to effect improvement in performance especially when it is inade+uate. Specifically, performance interview has three goals. • • (o change behaviour of employees whose performance does not meet organi,ational (o maintain the behaviour of employees who perform in an acceptable manner

re+uirements or their own personal goals.

(o recogni,e supervisor performance behaviour so that they will be continued.

A. A=0 Degree performance appraisal:5 D#$ degree performance appraisal is performing a feedbac' after the main &4$ degree appraisal. /any management e6perts feel that doing a comprehensive &4$ degree appraisal is not complete in itself. (hey feel that an effective procedure to measure improvements & receive feedbac' is essential for the success of any appraisal. (his gives a pre & a post intervention results. (he pre%intervention results sets the base line. (he development intervention is done to improve the participants behaviour;e6ample training, coaching.. (he post%intervention survey then shows the amount of improvements in the results. D#$ degree as the name suggests is &4$ degree twice%doing the appraisal once where the performance of the employee analy,ed and having a good feedbac' mechanism where the boss sits down with the employee another time and gives him feedbac' and tips on achieving the targets sets. (oo often, employees complain that they never receive feedbac' until the ne6t performance appraisal. (hey say that, by then it is too late. D#$ degree appraisal see's to address these concerns by giving the employees feedbac' on their performance and help to maintain the goals set for them. (in*ing:5 ; Philips Lea*ership !ompetencies / the 360 *egree Appraisal:5 Philips uses a number of tools aimed at measuring the competency levels focusing at si6 competencies7% • • • • • • Shows determination to achieve e6cellent results. *ocuses on the mar'et. *inds better ways. Demands top performance. )nspires commitment. Develops self & others.

)nstrument used for &4$ degree is >eadership Assessment Euestionnaire. 8360 Degree Performance Appraisal at $II :5 $II competence. In*i6i*ual <ffecti6eness (ee*-ac02I<(3" has been carefully administered over the last 2 years in ?))( used by all &F$$ staff of the co. across all levels & positions. 5urrently it is not possible to 'now the feedbac' of Gpeers9 seperatly from Gsubordinates9. Such role specific analysis of feedbac' will help individuals gain a much sharper understanding of what needs to change or improve. P%&BL<M1 .3 <rrors in rating :5 Performance Appraisal may not be valid due to following types of errors7% 8 Halo <ffect :5 )t is the tendency to rate an employee consistently high or low on the basis of overall impression. (his error may be minimi,ed by rating all the employee on one trait before ta'ing up another trait. 8 1tereotyping :5 (his implies forming a mental picture of a person on the basis of his age, se6, caste or religion. 8 !entral en*ency :5 )t means assigning average ratings to all the employees in order to avoid commitment or involvement. 8 !onstant <rror :5 Some evaluators tend to be lenient while others are strict in assessing performance. (his creates overrated ie. >eniency error or introduced the formal &4$ degree survey in !""3. (he primary

ob1ectives to provide multiple source feedbac' as input to enhance inter%personal

underrated ie. Strictness error .(his tendency may be avoided by holding meetings so that the raters understand what is re+uired of them. 8 Personal Bias :5 Performance Appraisal may become invalid because the rater disli'es an employee. Such bias may arise on the basis of regional or religious beliefs & habits or interpersonal conflicts.

; 1pill &6er effect :5 (his arises when past performance affects assessment of present performance. =3 Lac0 of %elia-ility :5 0eliability implies stability & consistency in measurement. >ac' of consistency among different raters may reduce the reliability of Performance Appraisal. Different +ualities may not be given proper weight age. *actors li'e initiative are highly sub1ective & cannot be +uantified. 3. Incompetence :5 0aters may fail to evaluate performance accurately due to lac' of 'nowledge & e6perience. ?3 $egati6e Approach :5Performance Appraisal losses value when the focus of management is on punishment rather than on development of employees. @3 Multiple &-Becti6es :5 0aters may get confused due to two many ob1ectives or unclear ob1ectives of Performance Appraisal. 63 %esistance :5 (rade unions may resist Performance Appraisal on the ground that it involves discrimination among its members.

!onclusion &4$%degree is sometimes referred to as multi%rater appraisals, multi%source feedbac' or &4$ degree profiling. )t is essentially a process, which enables a person to receive feedbac' from a number of people around them ;see diagram..(he success of the appraisal depends on the transparency and clear ob1ectives of its need and its clear cut intimation to the employees even at the bottom level of the organi,ation. )t can be said for sure that those corporations which have imbibed &4$ degree as an important part of their organi,ation have come to be associated with accountability, value, creation, transparency & care for employees coupled with the image of caring for social values also. (his has automatically given them an advantage over their competitors & is li'e an investment for their future profitability. )n conclusion, it is important perhaps to note that &4$ Degree can be very significant behavioural science intervention in bringing about culture change in )ndian corporations which continue to be preoccupied with top%down autocratic cultures. %eference !. Aswathappa. ;!""3., AHuman 0esource and Personnel /anagementA, ?ew Delhi. #. ?iehoff, <.P. -n,, 5.A. and @rover,0.A. ;!""$. H (he )mpact of (op management Actions of -mployee Attitude and perceptions,H @roup and =rganisations Studies,!3,;&. PI &&D%&3#. &. /acgregor, D. ;!"D#., HAn neasy >oo' at Performance Appraisal <usinessH, Harvard 0eview, September:=ctober, pp. !&&%!&F. 2.Dale S.<each 7 Personnel J (he /anagement of People at Wor', 5ollier /acmillan Publishing 5oI ?ew Kor', !"D3 p.#F$


dai Paree', (.L.0ao 7 Designing & /anaging H0 Systems, (hird -dition chap. !D,p

2&F =6ford & )<H Publishing co. Pvt. >td.

ADD%<11:5 =002B3 $AM%A A ACA1 BAD%A$> $A>A% #& A2%ADA1 HA$3 3=?00E

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