360-degree feedback

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In human resources or industrial/organizational psychology, 360-degree feedback, also known as "multi-rater feedback," "multisource feedback," or "multisource assessment," is feedback that comes from all around an employee. "360" refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where managers are given feedback by their direct reports, or a "traditional performance appraisal," where the employees are most often reviewed only by their managers.

The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review." However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well (Waldman et al., 1998).


Contents

[edit] History

The German Military first began gathering feedback from multiple sources in order to evaluate performance during World War II (Fleenor & Prince, 1997). Also during this time period, others explored the use of multi-rater feedback via the concept of T-groups.

One of the earliest recorded uses of surveys to gather information about employees occurred in the 1950s at Esso Research and Engineering Company (Bracken, Dalton, Jako, McCauley, & Pollman, 1997). From there, the idea of 360-degree feedback gained momentum, and by the 1990s most Human Resources and Organization Development professionals understood the concept. The problem was that collecting and collating the feedback demanded a paper-based effort including either complex manual calculations or lengthy delays. The first led to despair on the part of practitioners; the second to a gradual erosion of commitment by recipients.

Multi-rater feedback use steadily increased in popularity, due largely to the use of the internet in conducting web-based surveys (Atkins & Wood, 2002). Today, studies suggest that over one-third of U.S. companies use some type of multisource feedback (Bracken, Timmereck, & Church, 2001). Others claim that this estimate is closer to 90% of all Fortune 500 firms (Edwards & Ewen, 1996). In recent years, internet-based services have become the norm, with a growing menu of useful features (e.g., multi languages, comparative reporting, and aggregate reporting).


[edit] Benefits

Benefits of 360-degree feedback are many. Some of the most common include:

  • Raised awareness of one's individual behaviors and how they impact others- positively and negatively.
  • Increased awareness and reinforcement of those competencies most important to the organization.
  • Increased awareness by senior management that they, too, have development needs.
  • More reliable feedback to senior managers about their performance.
  • Gained acceptance of the principle of multiple stakeholders as a measure of performance.
  • Encouraging more open feedback — new insights.
  • Identifying key development areas for the individual, a department, and the organization as a whole.
  • Identifying strengths that can be used to the best advantage of the business.
  • Supporting a climate of continuous improvement.
  • More focused agenda for development.
  • Requiring line managers to discuss development issues.
  • Perception of feedback as more valid and objective, leading to acceptance of results and actions required.
  • Gaps are identified in one's self-perception versus the perception of the manager, peer or direct reports.


[edit] Concerns with 360-degree feedback

Several studies (Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999) indicate that the use of 360-degree feedback helps people improve performance. However, Siefert, Yukl, and McDonald (2003) claim that there is little evidence that the multi-rater process results in change. A Watson Wyatt study also found that 360-degree feedback programs were associated with a 10.6 percent decrease in shareholder value when not directly measuring those areas most critical to the organization or not implemented correctly (Pfau & Kay, 2001). Other studies, however, contradict the notion that multi-rater assessment processes do not result in change. In a 5-year Walker and Smither (1999) study no improvement in overall ratings was found between the 1st and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years. A study by Reilly et al. (1996) found that performance increased between the 1st and 2nd administrations, and sustained this improvement 2 years later. Additional studies show that 360 feedback can be predictive of future performance (Maylett & Riboldi, 2007).

Additional concerns reported by organizations include:

  • Return on investment, for the time and energy required, may be perceived to be minimal.
  • Transparent feedback can be adversely affected by emotions and ongoing peer conflicts.
  • Appraisees may not be ready for honest and open feedback.
  • Some cultures rigidly avoid passing negative feedback or information to superiors or elders.
  • Multi-rater assessments often generate conflicting opinions, and that there may be no way to determine whose feedback is accurate (Vinson, 1996).
  • Unless accompanied by appropriate coaching or debrief, employees may not understand how to read and interpret their feedback.


[edit] Strategic Use of 360 Data

While the value of 360-degree feedback is often seen in terms of individual development, aggregate reporting of all recipients' results can provide valuable data for the organization as a whole. It enables leaders to:

  • Take advantage of under-utilized personnel strengths to increase productivity.
  • Tie human assets data to the valuation of the organization.
  • Make succession planning more accurate.
  • Design more efficient coaching and training initiatives.


[edit] Rater accuracy

One advantage of multi-rater assessment is the opportunity for individuals to rate themselves, and compare these ratings to others’ ratings. Studies examining discrepancy between self-assessments and others (supervisors, peers, direct reports, and customers) have indicated that the ratings between self-scores and scores provided by others showed significant disagreement (Lublin, 1994). Self-ratings tend to be inaccurate when compared to the ratings of others (Yammarino & Atwater, 1993), with self-ratings generally being significantly higher than the ratings of others (Nowack, 1992).

A study on the patterns of rater accuracy shows that length of time that a rater has known the person being rater has the most significant effect on the accuracy of a 360-degree review. The study shows that subjects in the group “known for one to three years” are the most accurate, followed by “known for less than one year,” followed by “known for three to five years” and the least accurate being “known for more than five years.” The study concludes that the most accurate ratings come from knowing the person long enough to get past first impressions, but not so long as to begin to generalize favorably (Eichinger, 2044).


[edit] Introducing 360 feedback in an organization

Before introducing 360-degree feedback into an organization, the planning process must include addressing the benefits and perceived risks of all participants. Recipients of feedback and reviewers may have concerns about issues such as confidentiality of reviews, how the completed reviews will be used in the organization, and what sort of follow-up they can expect. Communication and support provided throughout the project must take this into account if the program is to provide maximum value for the individuals and the organization using 360 feedback.


[edit] References

  • Atkins, P., & Wood, R. (2002). Self-versus others' ratings as predictors of assessment center ratings: Validation evidence for 360-degree feedback programs. Personnel Psychology, 55(4), 871-904.
  • Bracken, D.W., Dalton, M.A., Jako, R.A., McCauley, C.D., & Pollman, V.A. (1997). Should 360-degree feedback be used only for developmental purposes? Greensboro, NC: Center for Creative Leadership.
  • Bracken, D.W., Timmereck, C.W., & Church, A.H. (2001). The handbook of multisource feedback. San Francisco: Jossey-Bass.
  • Eichinger, Robert. (2004). Patterns of Rater Accuracy in 360-degree Feedback. Perspectives, 27, 23-25.
  • Fleenor, J. W., & Prince, J. M. (1997). Using 360-degree feedback in organizations: An annotated bibliography. Greensboro, NC: Center for Creative Leadership.
  • Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree feedback on management skills development. Human Resource Management, 32(2-3), 325-351.
  • Maylett, T. M., & Riboldi, J. (2007). Using 360° Feedback to Predict Performance. Training + Development, September, 48-52.
  • Pfau, B. & Kay, I. (2001) Does 360-degree feedback negatively affect company performance? Studies show that 360-degree feedback may do more harm than good. Watson Wyatt's Human Capital Index (HCI) report.
  • Reilly, R., Smither, J.W., & Vasilopoulos, N. (1996). A longitudinal study of upward feedback. Personnel Psychology, 49(3), 599-612.
  • Siefert, C., Yukl, G., & McDonald, R. (2003). Effects of multisource feedback and a feedback facilitator on the influence of behavior of managers toward subordinates. Journal of Applied Psychology, 88(3), 561-569.
  • Vinson, M. (1996, April). The pros and cons of 360-degree feedback: Making it work. Training and Development, April, 11-12.
  • Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone amok? The Academy of Management Executive, 12(2), 86-94.
  • Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What managers do with their results matters. Personnel Psychology, 52(2), 393-423.
  • Yammarino, F. J., & Atwater, L. E. (1993). Self-perception accuracy: Implications for human resource management. Human Resource Management, 32(2&3), 231-235.
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