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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 3 of 7 Measuring the What Versus the How It is critical to be clear about the purpose behind an assessment. Is the purpose of the process administrative or appraisal focused, or is it intended purely for development? Failure to clearly answer this question upfront could spell disaster. DecisionWise, an assessment and organization development firm, recently completed a comprehensive, 3-year series of studies that show that little, if any, correlation exists between a person's traditional single-rater, top-down performance appraisal and the same person's developmental multirater assessment. One might expect that those receiving very high 360 scores would also receive the highest performance appraisal scores. Employees in the middle ranges of one appraisal would naturally be in the middle ranges of the other. These studies found that this was not necessarily the case. However, those who were the highest performers —the top 10% on a developmental, multirater assessment—typically scored in the top half of performance appraisal scores when compared to others. Similarly, those who ranked in the bottom 10% of multirater scores were generally ranked in the bottom half of performance appraisal scores. A first glance at these performance studies brings into question the validity and reliability of 360s and performance appraisals. Although it is true that validity and reliability of the instruments are important, the primary issue here is not one of statistics. It lies in the purpose of the instrument. The primary purpose of a performance appraisal is to rate an employee's performance based on what he or she has accomplished. It measures skills, performance and accomplishment according to established metrics, goals and company or unit objectives. The purpose of a developmental assessment is to measure how it was accomplished and what behaviors brought this about. In other words, a manager could theoretically accomplish all of his or her stated objectives—something that is measured in a performance appraisal. This is the what. An employee's supervisor may be in the best position to provide this type of feedback. However, the manner in which he or she accomplished the objectives is measured in a developmental assessment. This is the how. The employee may have hit all the key performance goals but destroyed important relationships in his or her path, a situation more common than not in many organizations. Persons other than the manager—peers, subordinates and others—may be in the best positions to evaluate this component of performance. Because of these not-so-subtle differences, it is possible to receive high scores on one form of assessment and low scores on the other. Absolute Versus Relative Scores One of the concerns typically expressed about multirater feedback is that the scores are too high. On a 7-point scale, this may mean that average scores hover in the 5.0 to 5.4 range. On further examination, it is no surprise that this is the case. The vast majority of employees should be performing at least at this level. If not, the company has a separate performance issue. However, it is important to recognize that, by nature, multirater feedback used for development purposes will typically result in mean, median and mode scores that are about 20% higher than performance appraisal scores. In fact, more than 90% of employees will receive higher overall developmental feedback scores than they do on their overall performance appraisal scores when rating scales are similar. Part of the reason for this is that those providing feedback for development tend to look at absolute performance rather than relative performance. In other words, on a scale from 1 to 10 in terms of how the employee actually performed, where did the employee fall on an absolute scale? On the other hand, when used for appraisal purposes, raters tend to look at the relative performance: How well did they perform relative to others? It is a bit like the grading on a curve experienced by generations of college students everywhere. This also means that a greater range in scores will likely be found in feedback used for appraisal. This is a fact that tends to encourage proponents of 360s for appraisal; there is a greater spread between high scorers and low scorers. However, some of this comes from pressure on the supervisor, real or perceived, to make a visible distinction between high and low performers. This pressure is often carried over from the need to provide clear performance ratings to divvy up bonus or compensation pools. Unfortunately, this forced ranking system may cause supervisors to spread scoring ranges out to the point that they are no longer indicative of true performance levels and therefore are of questionable use to the person receiving the feedback report. << Back | Next >> Page 3 of 7 |
