When Should Organizations Use 360-Degree Feedback?

When Should Organizations Use 360-Degree Feedback?

Q: We are getting set to formalize our review process. How do I know if 360-degree performance appraisals are right for our company?


A: The 360-degree method of appraising performance is not right for every company. These appraisals are based on feedback from peers, direct reports and supervisors - typically for people in a supervisory role. The idea is that by hearing 360-degree of feedback, the person will be better positioned to improve performance. However, the first issue to address is whether 360-degree performance appraisals make sense within your company's culture. To find out if your company is prepared to do these types of review, ask yourself and your team the following questions.

How big is big?
In a company of five people, it does not make sense to do 360-degree performance appraisals. In this environment there is a strong likelihood that feedback will not be confidential, based upon the responses. Companies with more than 500 employees would be a decent place to start thinking about 360-degree feedback. In this case, size does matter.

What is the ideal number of supervisors?
There is no ideal number. However, if you have at least 10 people in a supervisory role, it may make sense to use 360-degree feedback. The implication is that you will have lots of people to manage and lots of feedback to get.

How many reports is enough?
I would not recommend doing 360-degree performance appraisals for a supervisor with fewer than five employees. It's too easy for supervisors to figure out who said what, therefore undermining the process. Teams with fewer employees also are likely to be closer and talk among themselves. Instead of standardizing the process, ask people one on one for feedback. It will go a long way and it's what good managers do.

What will be the perception of the feedback?
If supervisors go through a 360-degree performance appraisal process, and are on a witch hunt to find who said what, then it will not go well. Supervisors themselves need to be open and honest that the system produces constructive criticism. Those who are resistant to the feedback are likely not the right people anyway, so it's about time they were shown the door.

How will the feedback be used to improve supervisor performance?
It's important that the feedback be used in conjunction with strategic business goals that your supervisors already have. Tie the feedback to goals and you'll get a winning process. Tie the feedback to "this person is a bad person," and you'll find yourself in last seat on the bus to nowhere.

What are the implications on the workforce?
It makes a difference if your company is unionized or non-union. In a union environment, you will need to consider a host of legal issues before making any management decisions that affect people. If yours is a non-union environment, then it's probably riper for 360-degree appraisals because folks will be more inclined to give their honest opinion, rather than blast a supervisor out of the water because he docked someone's pay for showing up late 10 weeks in a row.

Will 360-degree performance appraisals be conducted internally or externally?
No matter how many times you say that something is confidential, there will always be a contingent of folks who don't believe confidentiality will be maintained. If the system is launched internally, not using an external expert, then it will be more open to the criticism of being non-confidential. If an outside expert is used, this will decrease the likelihood of folks thinking their name will show up on your "Big Red List of People We Want to Fire Today." 



[Source: Dana E. Jarvis, human resources director, Snavely Forest Products, Pittsburgh, November 30, 2006. Jarvis also is an adjunct professor at Duquesne University in Pittsburgh.]