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360-Degree Feedback Revisited:
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By Tracy Maylett, Ed.D CEO DecisionWise Successfully using 360-degree feedback for both employee development and performance appraisal requires a clear understanding of objectives and possible outcomes. Download PDF Version << Back | Next >> Page 2 of 7 Problems With Standard Appraisals A significant percentage of companies report that their traditional performance appraisal process—a top-down, supervisor-to-subordinate process—is inadequate and fails to provide an extensive view of performance. To further complicate the situation, tying compensation to a questionable appraisal system only complicates already-flawed compensation practices. This would certainly come as no surprise to a compensation or human resources professional. Other organizations find that their performance appraisal metrics generally do not take into account the manner in which employees go about reaching targets. Consider the case of a large manufacturing organization that learned this fact the hard way. One particular group of senior leaders stuck out more than the rest of this organization in this regard. This particular group of managers regularly achieved revenue targets. As a result, these managers consistently received exceptional performance appraisal ratings and, consequently, significant bonuses beyond those of their counterparts. However, they also experienced high levels of employee attrition. They had difficulty attracting and retaining talent. It soon became clear that these managers were meeting short-term targets at the expense of long-term profitability. These managers were also leaving a "wake of dead in their paths," as the company described it, in achieving their short-term revenue targets. Although their performance appraisals indicated that they were excellent performers, and their compensation so reflected, these managers and their departments were often found to be the origination points of many employee issues. It was quickly realized that the top-down appraisal being used by this organization took into account only the ratings of the manager's supervisor. These ratings were based almost entirely on whether or not the manager hit monthly revenue targets. However, the manager's true overall performance went largely unmeasured. The company made the decision to use multi-rater feedback to look at overall performance and leadership behavior. Through this process, it found that many of these managers being compensated as "outstanding performers" were actually not so stellar after all. In fact, it became apparent that these managers' traditional performance appraisals were ineffective at determining true levels of performance, particularly in terms of leadership behaviors. Advantages and Disadvantages Multirater feedback has several significant advantages over single-rater assessment. Rather than relying on the perceptions of one individual, multirater feedback takes into account multiple perspectives. Those working with the employee, along with the supervisor, are generally able to provide a more comprehensive picture of an employee's behavior or performance. This is especially critical when the supervisor does not have the opportunity to observe all areas of an employee's performance. However, there are some significant disadvantages to using multirater feedback for appraisal purposes. Because many organizations and managers operate in poor feedback environments, the first exposure to 360-degree feedback may be accompanied by some degree of angst on the part of both the organization and the employee. When employees understand that the feedback they receive will be used purely for their own developmental benefit, they tend to be more receptive to the feedback provided. Rather than receiving the feedback from a defensive posture, employees are more apt to accept the feedback as a "gift" from those they affect. When 360-degree feedback has administrative consequences, such as raises, promotions, bonuses or possible layoffs, employees may be more likely to attack the feedback rather than accept it. After all, they may have much more to lose. Similarly, raters may be less likely to provide honest, candid feedback when they know that it may affect someone's pay or position. << Back | Next >> Page 2 of 7 |
