Ten reasons you should be using 360-degree feedback

HR Magazine, April, 1995 by Robert Hoffman

This evaluation technique enables companies to align employee performance with the organization's needs and overall strategy and leads to the development of a more involved, less hierarchical workforce.

The use of 360 [degrees] feedback is increasing every day. Many companies have turned to this popular diagnostic and assessment tool to increase employee participation and to demonstrate a commitment to their workforce. The process identifies behaviors nurtured by the corporation and teaches techniques to align personal focus with organizational expectations.

Also known as full-circle appraisal, multi-rater assessment or group performance appraisal, 360 [degrees] feedback is an approach that gathers behavioral observations from many layers within the organization and includes employee self-assessment. The individual employee completes the same structured evaluation process that managers, direct reports, team members, peers and, in many cases, external clients use to evaluate his or her performance.

Summary results are compared against organizational strategies, values and business objectives. The feedback is communicated to the employee and interpreted with the assistance of the company's human resource department or an outside consultant. The technique can be used for team-based work groups and for traditional working hierarchies.

The objective of the 360 [degrees] process is to identify areas for both organizational and individual improvement. Some companies use the tool solely as a developmental mechanism. Others incorporate 360 [degrees] feedback as a key part of the performance appraisal process. The technique is used by a growing number of firms including General Electric, AT&T, Digital Equipment Corporation, Nabisco and Warner-Lambert.

Incorporating 360 [degrees] feedback into the performance assessment cycle has proved valuable as a tool for providing insight into the entire organization. Jim Gemmell of Mobil Oil embraces the process, "Until we implemented 360 [degrees] feedback, we were only focusing on issues related to managing upwards. We would typically neglect other critical aspects of our business objectives. Currently, with 360 [degrees] feedback we show concern for employees at all levels, in addition to emphasizing the external client focus of Mobil."

Implementing 360 [degrees] feedback is relatively simple. Outlined below are 10 facts about this evaluation process that you can use to persuade your company to begin now.

1. Defines corporate competencies. Many companies are wrestling with the problem of identifying their organization's true mission. What must be done to meet the demands of the marketplace? How can companies link the critical factors that bond job requirements with business objectives? What these organizations need is an instrument that determines the relationship between their strategic plan and performance expectations.

When 360 [degrees] feedback is used, contrasting the results of self-evaluation against organizational norms illuminates areas of the business plan that need more attention from the employee. As Roger Baguley, an organizational development consultant to Digital Equipment of Canada explains, "The evolution of performance appraisal is exemplified by the 360 [degrees] feedback instrument. A properly designed and executed process will determine the continuity of product delivered at the level above and below the individual. You can truly determine if the results required by the strategic plan are filtering throughout all organizational levels." Once the differences are known, senior management can more effectively communicate the skills, knowledge and experiences necessary to align individual goals with overall corporate strategy.

2. Increases the focus on customer service. Many organizations today emphasize meeting the needs of both internal and external customers. A 360 [degrees] feedback program can reinforce total quality management (TQM) and continuous process improvement programs. Customers of the employee or work group assess key variables that contribute to the cornerstone of the quality program. A sample question measuring customer service skills might be, "How effectively does the employee get things done without creating unnecessary adversarial relationships?" The validity of the TQM program is determined by the extent of positive survey responses. Incorporating customer feedback in the evaluation process emphasizes the importance of client expectations in determining company focus.

3. Supports team initiatives. The shift from individual to team-based initiatives is spiraling. More companies have realized that a team-based culture can be a catalyst for attaining business objectives. Regardless of whether an organization is just beginning to involve employees or has migrated completely to self-directed work teams, the multi-rater process promotes team-building.

The traditional approach of relying on feedback from an employee's manger becomes only part of the overall assessment process. Incorporating feedback from direct reports, peers and higher organizational levels fosters the transition to teams. Employees are more inclined to consider factors beyond the bosses' expectations when exhibiting behaviors and striving for results.