Get the most from 360-degree feedback: put it on the Internet - Otis Elevator Co.'s Internet-based 360-degree feedback system

HR Magazine, May, 1999 by Huet-Cox. G. Douglas, Tjai M. Nielsen, Eric Sundstrom

How one organization made its appraisal system worthwhile by using web-based technology.

Suppose a senior corporate vice president calls you one day and asks you to create a better way to do performance appraisals - a process that accurately evaluates performances, makes individuals accountable, links performance to organizational strategy goals and fosters employee development. By the way, the system has to be easy to use, and the process of putting it into place can't resemble a fire drill.

This is exactly what happened in June 1996, when a senior vice president of a division of Farmington, Conn.-based Otis Elevator Co. called Doug Huet-Cox, president of E-Group, an international management consulting firm in Maryville, Tenn. The phone call led to a user- friendly performance appraisal system based on 360-degree feedback collected via the Internet - a developing technology that is the next logical step in making this instrument a seamless, efficient way to foster professional development. Here's how it was done.

The Problem

The vice president, who was the executive leader of Otis' Farmington worldwide engineering group, wanted to avoid the headaches that had plagued performance evaluation in the past. Earlier systems consumed too much tune and paper and didn't inspire confidence. Employees saw the evaluations as an unavoidable hassle and an exercise in red tape. Nobody believed they were helpful - not for employees or the company. So, any new system had to be user-friendly, and users had to see it as worthwhile.

The vice president also needed a system that evaluated the performance of engineering managers based on competencies required in the company's new orientation to project teams. Farmington executives sought to build a system that evaluated how well managers demonstrated the competencies required in this new environment.

For the team-based organization to flourish, its managers would have to exhibit superior performance in two crucial areas: team leadership and project management. The performance evaluation system had to accurately assess both sets of competencies and had to make managers accountable for business results of engineering projects.

Farmington added one more challenge: Engineering managers were unaccustomed to being evaluated on leadership skills. Many of them had a great deal of learning to do. In addition to evaluating managers' team leadership and project management skills, the new system would have to provide feedback in a way that helped managers to learn and develop leadership competencies.

The Solution

To meet the company's needs, senior leaders at Farmington decided to build a 360-degree feedback system accessed via the Internet and the company's intranet. They concluded that such a system would assure that managers got feedback directly from those most affected by their performance in the areas of project management and team leadership: direct reports, peers and customers, as well as their managers. When leaders looked into practices at other companies, they learned that 360-degree feedback, if well executed, could accurately assess performance in strategically important competencies, establish accountability for business outcomes and foster managers' development.

Executives decided to use the Internet as the vehicle for collecting 360-degree feedback. Nobody favored paper-and-pencil ratings; the group recalled the time, trouble and aggravation of filling out questionnaires by hand and dealing with the resulting stacks of paper. The Internet offered a faster, more convenient alternative. Appraisers also perceived it as secure and confidential.

The executives quickly chose to use E-Group as an external supplier for the 360-degree feedback system, rather than to complete it internally. Farmington lacked both the required capacity in house and the time to develop the system. Using a contractor also meant that performance evaluation would be administered by an objective third party. This point relates to a key "human factor" in the success of 360-degree feedback: Managers only trust it if they are confident of its objectivity and confidentiality. A third-party system has obvious advantages in these respects.

After reviewing several 360-degree feedback instruments, Farmington decided to go with LEAPS (Leading Empowered, Active People Survey), which was specifically designed by E-Group to provide 360-degree feedback on team leadership skills and worked best at assessing behaviors required in a project team-based organization.

LEAPS incorporates specific behaviors for effective team leadership in a variety of settings. It includes desirable behaviors, such as "employee uses humor to defuse tension and create harmony." It also includes some undesirable behaviors that effective leaders must minimize or avoid. One example: "Employee tends to blame people when performance is poor." In all, LEAPS has 75 items that tap the seven facets of team leadership. Executives felt that LEAPS would give appraisers clear, easily understood images of behavior.