Our research has shown that traditional performance appraisals fail to provide an accurate view of performance. One of the most effective ways to improve the process is to incorporate a 360 degree feedback assessment. 360 feedback provides more points of reference, measures how someone does their job, and opens up a real developmental conversation between manager and subordinate. Before using 360 degree feedback as part of a performance review process, we recommend the following 10 tips:
- Understand the differences in use and purpose. There are differences in how a 360 degree feedback survey should be used for development as opposed to appraisal. Scores are typically elevated when 360 feedback is used for appraisal purposes because raters recognize that results can impact a person’s compensation. Understanding that scores will differ depending on the purpose will help in determining how best to use and interpret the scores. These differences should be taken into account when determining how to use and interpret the results.
- Communicate the purpose and process. Let employees know the intended purpose before administering the assessments, as well as how the results will be used. Communicate the process and hold to it. Train the organization on how to provide accurate ratings.
- Use a pilot group. Using a pilot group of 35-50 people prior to organization-wide rollout has several advantages. First, it allows for refinement of the process and of the instrument itself. Many potential problems are quickly identified that would have been wide-spread otherwise. Second, the pilot participants can act as champions to promote the process throughout the rest of the organization.
- Wait before taking administrative action. If you are starting to use 360 degree feedback for the first time, wait until the second year of use before to tying raises, promotions, etc. to the appraisal results. This allows people to become familiar with the process and comfortable with providing feedback.
- Manage rater selection. If participants select their own raters they may be tempted to “stack the deck” in their own favor. This can be solved by selecting raters on behalf of the employee or having the person’s manager review the list before it is finalized. Be sure that the selected raters have regular interaction with the employee being rated and can provide accurate feedback as to performance.
- Use small but relevant rater groups. Consider the number of people that will be involved in providing feedback. 360 degree appraisals involve more of the organization in terms of providing feedback. Each person (especially managers), may be required to complete multiple evaluations. We recommend selecting only two to three people in each of the peer and direct report rater groups.
- Consider the answer scale. We recommend using a 7-point Likert scale, rather than a 5-point scale. This allows for greater differentiation in scores.
- Keep the survey short. Design a survey that is short enough that it can be completed in 15 minutes. We have found this to be approximately 45-55 questions. Any longer and raters tend to experience rater fatigue, often resulting in all scores falling in the “good” range. The shorter the survey, the more apt raters are to take the time needed to give accurate information.
- Use a customized 360 degree feedback survey. 360 assessments for development should include questions geared at behavior (the how), while appraisal assessments can focus more on performance (the what). 360 survey questions should reflect these differences in design. Be aware that most off-the-shelf surveys are designed for developmental use, not for appraisals. We typically find that off-the-shelf surveys are inappropriate for appraisal purposes, and that organizations should consider a survey customized to their specific purposes.
- Don’t group questions into single category scores. Many performance appraisals group a series of questions under one category. An example of this would be the category of “Communications.” Communications is comprised of many elements: oral communications, written communications, listening, etc. Rather than providing scores for each item, many appraisals will give one overall score for the category. When this is the case, it is often difficult for an employee to know which area of “Communications” is being addressed. Providing a score for each individual question provides more useful data, and is easier for the rater to evaluate accurately.
