performance appraisal

360 DEGREE PERFORMANCE APPRAISL

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PERFORMANCE APPRAISAL

INTRODUCTION

People differ in their abilities and their aptitudes. There is always

some difference between the quality and quantity of the same work on the same

job being done by two different people. Therefore, performance management

and performance appraisal is necessary to understand each employee‘s abilities,

competencies and relative merit and worth for the organization. Performance

appraisal rates the employees in terms of their performance.

Performance appraisals are widely used in the society. The

history of performance appraisal can be dated back to the 20th century and then

to the second world war when the merit rating was used for the first time. An

employer evaluating their employees is a very old concept. Performance

appraisals are an indispensable part of performance measurement. Performance

appraisal is necessary to measure the performance of the employees and the

organization to check the progress towards the desired goals and aims.

The latest mantra being followed by organizations across the

world being – ―get paid according to what you contribute‖ – the focus of the

organizations is turning to performance management and specifically to

individual performance. Performance appraisal helps to rate the performance

of the employees and evaluate their contribution towards the organizational

goals. If the process of performance appraisals is formal and properly

structured, it helps the employees to clearly understand their roles and

responsibilities and give direction to the individual‘s performance. It helps

to align the individual performances with the organizational goals and also

review their performance.

Performance appraisal takes into account the past

performance of the employees and focuses on the improvement of the future

performance of the employees.

http://appraisals.naukrihub.com/


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FEATURES OF PERFORMANCE APPRAISAL

1) Setting SMART Goals for Employees:

Goal setting provides leaders, managers and employees with web-based

tools to set SMART goals and track progress on frequent intervals.

2) Evaluate Employee Performance:

Employee Appraisal ensures objective and accurate evaluation of your

employee‘s performance and helps you find the strengths and weakness of

the employee.

3)Coach and Train Employees to improve their performance:

To continually improve performance of your organization you need to

continuously training employees to update their skills and competencies.

Training Management allows you manage employee training effectively.

4) Define competitive employee compensation plans:

Employee compensation plan helps you to remain competitive in your

business and attract and retain talented employee.

5)Promote right employees to critical positions:

Organizations success by placing right employee in right positions.


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OBJECTIVE OF PERFORMANCE APPRAISAL

Objectives of Performance appraisal:

To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior

– subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to

identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the

organization.

Provide clarity of the expectations and responsibilities of the functions to

be performed by the employees.

To judge the effectiveness of the other human resource functions of the

organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.


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PERFORMANCE APPRAISAL SYSTEMS

Issues like promotions, demotions, bonuses and pay will affect the

success or failure of a 360 degree performance appraisal. Keep in mind that

performance appraisal systems are used to define employee goals, employee

contributions and determine the employee‘s results in meeting those goals and

contributions. It is a genuine review of past employee performance.


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PERFORMANCE APPRAISAL - PUNISHMENT TOOL OR

ORGANIZATIONAL CATALYST

Performance Appraisal is one of the core HR activities. It is the

assessment of the employee‘s job performance. It is completely based on

employee‘s job description and objectives to be achieved.

Performance Appraisal (PA) has 2 basic purposes. First, PA serves an

administrative purpose. It provides information for making salary, promotion

and layoff decisions as well as providing documentation for justifying these

decisions. Second, rather more importantly, performance appraisal serves a

developmental purpose. This information can be utilized for determining

training needs, career planning and succession planning.

Employees have mixed views about performance appraisals.

According to one segment, it is for the betterment of the employees and the

organization. Those employees, who work efficiently and effectively, will get

the agreed intrinsic as well as extrinsic benefits. It is being regarded as an

excellent method of keeping everyone motivated. The better you perform, the

more you get.

On the contrary, some employees suggest to their managers that

companies should get rid of performance appraisals as it is a bitter process

which has the ability to create emotional pressures and stress for the employees.

http://blog.ephlux.com/?p=190

http://blog.ephlux.com/?p=190


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A manager‘s bias also plays its role. Furthermore, he might lack proper training

for evaluating employees‘ performances. Their perception is that ―no matter

how well we perform, our contributions will never be acknowledged.‖

Annual performance

The annual performance appraisal might be the most important

meeting you have with your employees all year. Appraisals offer an opportunity

to clarify job descriptions, set goals and objectives, formulate sensible

compensation decisions, and decisively address any performance challenges.

Properly handled, performance appraisals can correct personnel issues and set

employees on a positive course for the coming months. Handled poorly, they

have the potential to demoralize employees, provoke EEO complaints, and

erode trust in management.

This session is a must for managers and human resource professionals

who are frustrated with the typical ineffectiveness of performance management

discussions in advancing organizational goals and promoting positive employee

relations.


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360 DEGREE PERFORMANCE APPRAISAL

INTRODUCTION

Unlike, the traditional top-down appraisal where a supervisor

appraises the performance of their subordinate, 360 Performance Appraisal

incorporates multiple perspectives by using feedback from a variety of sources.

360 degree feedback, also known as 'multi-rater feedback', is the most

comprehensive appraisal where the feedback about the employees‘ performance

comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers,

managers (i.e. superior), subordinates, team members, customers, suppliers/

vendors - anyone who comes into contact with the employee and can provide

valuable insights and information or feedback regarding the ―on-the-job‖

performance of the employee.

360 degree appraisal has four integral components:

1. Self appraisal

2. Superiors appraisal

3. Subordinate‘s appraisal

4. Peer appraisal.

Self appraisal gives a chance to the employee to look at his/her

strengths and weaknesses, his achievements, and judge his own performance.

Superior‘s appraisal forms the traditional part of the 360 degree appraisal where

the employees‘ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the

parameters like communication and motivating abilities, superior‘s ability to

delegate the work, leadership qualities etc. Also known as internal customers,

the correct feedback given by peers can help to find employees‘ abilities to

work in a team, co-operation and sensitivity towards others.


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Self assessment is an indispensable part of 360 degree appraisals and

therefore 360 degree Performance appraisal have high employee involvement

and also have the strongest impact on behavior and performance. It provides a

"360-degree review" of the employees‘ performance and is considered to be one

of the most credible performance appraisal methods.

The aim is to find the gap between one‘s own appraisal and the

perceptions of others. This will in turn enable a professional to analyze his

strengths and shortcomings and accordingly improve his performance. While it

is true that the system serves as an excellent process since it reduces biases, it is

not always successful. It is necessary to create the right culture in the company

before introducing the system. If many people are unhappy or their morale is

low, the situation can turn disastrous as some staffers will become obvious

targets.

360 degree appraisal is also a powerful developmental tool because

when conducted at regular intervals (say yearly) it helps to keep a track of the

changes others‘ perceptions about the employees. A 360 degree appraisal is

generally found more suitable for the managers as it helps to assess their

leadership and managing styles. This technique is being effectively used across

the globe for performance appraisals.



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Some of the Organizations using 360 Degree Performance Appraisal are:

Wipro,

Infosys,

Reliance Industries

Maruti Udyog etc.

HCLTechnologies.

Wyeth Consumer Health (WCH)

WHAT IS 360 DEGREE PERFORMANCE APPRAISAL?

360 Degree performance Appraisal is the most comprehensive

appraisal where the feedback about the employee‘s performance comes from all

the sources that come in contact with the employee on his job. For e.g.: peers,

colleagues‘, supervisors, subordinates, and clients etc, including the employee

himself. Such appraisal can provide valuable information regarding the ―on-the-

job‖ performance of the employee.

The employees receiving feedback gets rated by 360 raters. It involves

appraisal by those above, below, and to the side of an individual employee, as

well as self assessment in practice. The half yearly or yearly report of work

schedule goes from company to their headquarter of all the workers where their

performance is appraised. It contains all demotion, promotion, and other

activities related to the performance.


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360 DEGREE FEEDBACK

INTRODUCTION

360 feedbacks is simply a process for employees, management and customers

to receive…

advice

reactions

comments

opinions

responses

criticisms

views

pointers

…from each other about the efficiency of their professional development. Thus

the term 360 degree feedback, meaning a circle of those co-workers, managers

and customers around you.


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It is common for employees to be appraised by just one person, a manager or

boss. What if this appraisal process can be improved by gaining feedback from

people that work around the employee as well? This would give a fairer and

more accurate view of an employee.

360-degree feedback occurs when feedback is obtained from sources all around

an employee.

These sources may include:

management;

co-workers;

clients;

self assessment.

The system can include feedback from all of these groups, and from multiple

people from each of the groups. If you do not want to include all the groups in

the appraisal process, our system will automatically adjust for this. A common

example might be that employee (a) will be appraised by two managers, six co-

workers, zero clients and will perform a self assessment.

WHAT IS 360-DEGREE FEEDBACK?

It is a process whereby an individual is rated on their performance

by people who know something about their work. This can include direct

reports, peers, managers, customers or clients; in fact anybody who is credible

to the individual and is familiar with their work can be included in the feedback

process. The individual usually completes a self-assessment exercise on their

performance, which is also used in the process.


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360-DEGREE FEEDBACK DEFINITION -ACCORDING TO: TERRI

LINMAN

―360-degree feedback is an evaluation method that incorporates

feedback from the worker, his/her peers, superiors, subordinates, and

customers. Results of these confidential surveys are tabulated and shared with

the worker, usually by a manager. Interpretation of the results, trends and

themes are discussed as part of the feedback. The primary reason to use this full

circle of confidential reviews is to provide the worker with information about

his/her performance from multiple perspectives. From this feedback, the worker

is able to set goals for self-development which will advance their career and

benefit the organization. With 360-degree feedback, the worker is central to the

evaluation process and the ultimate goal is to improve individual performance

within the organization. Under ideal circumstances, 360-degree feedback is

used as an assessment for personal development rather than evaluation‖.


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360 DEGREE FEEDBACK SYSTEM

A 360 degree feedback system is designed to develop and discover

and employee‘s level of skill, how capable and knowledgeable employee is and

look for ways to improve how employee does their job.

A performance evaluation appraisal and a 360 degree feedback have

different functions. Research shows that 360 feedbacks when used incorrectly

cause poor performance. It breeds employee mistrust and as stated before,

increases the organizations risk of legal hot water.

Employee compensation decisions have historically been associated

with performance appraisals. In my organization (Local Government) there is a

culture of skepticism of management at best.

360 degree appraisals involve evaluating supervisors and managers as

well employees. This could be a positive for anyone who works for a local

government. However, because of the secrecy involved in who does the

rating…secrecy, government.

When 360 reviews are merged with compensation decisions (360 degree

performance appraisal), employees will begin to doubt the advantages of 360

degree feedback. When workers perceive that people around them are deciding

their financial rewards and promotional opportunities, mistrust may set in.

Some employee and manager raters may have trouble separating personal bias

and dislikes from an honest assessment of a coworker. Multiple source raters

are not very good at giving unbiased feedback. For performance appraisal

purposes, co-workers are bad at figuring out 360 feedbacks that influences

promotions and the size of the paychecks.


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SOME DIFFERENCES BETWEEN A 360 DEGREE

FEEDBACK AND A PERFORMANCE APPRAISAL

An effective performance appraisal is basically done between the

employee and however she reports to. The employee does not come to a

performance appraisal to find out how much she met co-worker, subordinate or

customer expectations.

When the manager calls her into the office for a performance appraisal

meeting the focus is on the actual performance of her job between the last

review and the current one. There are different expectations in a 360 degree

feedback. 360 degree evaluations involve how those around you perceive your

level of…

skill

practice (the way you apply yourself to the task)

competency(know-how)

behavior (actions or deeds)

Each of these areas is then measured to determine where improvement is

needed. Thus a 360 degree evaluation is used for ongoing personal and

professional development. A traditional staff performance appraisal highlights a

set of tasks performed satisfactorily in a specific period of time.

There are other differences between a performance appraisal and 360

degree feedback.

Typical performance appraisal methods involve the following…

pay increases or decreases

merit raises

promotions

demotions

separations or transfers

guidelines to calculate effective progress in training and decisions


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A 360 degree feedback system by design should not deal with employee

compensation.

Compensation decisions are one of the areas of controversy involving the

merger of 360 degree feedback and performance appraisal in evaluating job

reviews.

The need for growth in team and personal levels of performance have been

the driving force toward blending appraisal of performance and a 360 degree

feedback system.

A standard procedure of 360 appraisal involves providing a survey for

employees to rate each other and managers. These surveys are typically of a

confidential nature. This gives employees the confidence to give comments

without fear of retaliation. However there is research that points to dangers in

360 degree evaluations.

These 360 degree feedback surveys have managers and employees who are

selected as raters. What does rater mean? They are fellow employees or

managers who are selected to evaluate us. This is viewed as a more fair process

because the appraisals of employee performance are conducted by multiple

sources versus one manager who may be biased.

Research shows mixing 360 degree feedback and job performance appraisals

can expose a company to more employee lawsuits. This is because those rating

an employee must be careful not to violate the Civil Rights Act or Equal

Employment Opportunity Commission (EEOC) guidelines. The info gathered

from all raters is then given to the employee by someone designated by

management.

http://www.you-can-learn-basic-employee-rights.com/360-degree-feedback-survey.html


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NEED OF 360-DEGREE FEEDBACK IN ORGANIZATIONS

Business is towards surplus generation. Without surplus no organization can

grow. Here the effort to grow the business and the surplus should come from

employee part. The performance of the employees is at work here matters in

business development and organizational development. The performance of the

employees should then align with the strategic decisions that integrate the

business goals in an increasingly competitive environment. It is the

responsibility of the Human Resource Management to integrate the culture of

the organization with all available resources to the optimum out put. The 3600

Appraisal helps the HR Department to have better understanding of the

competitive advantage and disadvantages of the current manpower resources

and tune them towards performance excellence and productivity.

PREREQUISITES

* Top Management Support

* Confidence of employees on the appraisal methodology

* Objectives need to be measurable with performance requirements

clearly stated.

* A detailed plan of implementation

* Collaboration between superior and subordinates

* some prior experimentation and positive experiences Clear

organizational philosophy and policy objectives

USES FOR 360 DEGREE FEEDBACK INCLUDE:

Performance Appraisal

o Recognition of performance.

o Providing feedback on individual performance.

o Providing a basis for self-evaluation.

Assessing Employee Development:

o Diagnosing training and career development needs.

o Providing a basis for promotion, dismissal, job enrichment, job

enlargement, job transfer, probation, etc.

o Monetary and other rewards.


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Organizational Climate Study:

o Organizational environment improvement needs

o Changes in the Managerial approaches, leadership, etc

Customer Satisfaction Study

o Employees attitudinal change

o Customer satisfaction improvements


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HOW IT IS CONDUCTED.

(1.) Develop questionnaire: A questionnaire used for 360 Performance

Appraisal typically contains items that are rated on a 5 point scale. These items

may be developed to measure different dimensions of job performance (e.g.,

communication, teamwork, leadership, initiative, judgment). Questionnaires

also typically include one or more open-ended questions to solicit written

feedback.

Questionnaires typically include from 50 to 100 items. When estimating the

amount of time to complete the questionnaire they should estimate about 1

minute per questionnaire item.

If using a printed questionnaire form, they should consider using forms that can

be scanned into a computer.

(2.) Ensure confidentiality of participants Steps must be taken to ensure the

confidentiality of the feedback results. For example, feedback ratings from

several subordinates may be combined (averaged) to mask the identity of an

individual subordinate. The confidentiality helps ensure that the results are

genuine.

(3.) Provide training/orientation often the feedback process involves use of one

or more questionnaires, confidential information, and involvement from many

different areas of an organization. Therefore, training and orientation to the

feedback process is needed to facilitate a smooth feedback process. During this

training/orientation, employees should be informed of what 360 Performance

Appraisal is and why it is being implemented at the organization. They may

want to provide samples of the questionnaire items and/or feedback results.

(4.) Administer the feedback questionnaire Distribute questionnaire forms (if

using printed copies) with instructions. May want to prepare answers to

common questions if other employees will be assisting in the administration. If

possible, post the questions and answers to their web site for easy access.

It is important to monitor the progress through the system in order to contact

employees who need to complete forms.

(5.) Analyze the data Basic data analysis would include averages of ratings.

More complicated analyses may include item-analysis and/or factor-analysis.

Types of analyses include: Performance Dimension Summary; Summary-


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Performance vs. Expected; Individual Item Ratings; Item Ratings-Performance

vs. Expected (formed); Highest- or Lowest-Rated Items (shows individual's

strengths and weaknesses); Group & Organizational Ranking, and

Recommendations for Development.

They may want to analyze the data by organizational division or department to

assess group and organizational strengths and weaknesses. This can be used to

support or promote training and organizational development.

(6.) Develop and Distribute Results Feedback results should be shared with the

employee. It should not be mandatory that the employee share the results with

their supervisor. However, they may want to make this an optional part of the

performance review of the employee.

Most results for an employee will include a comparison of their ratings to the

ratings of their supervisor and average of the ratings from others (peers,

customers...). The comparisons may be in the form of numbers or simple bar

charts.

They may want to provide individual review sessions or group workshops

conducted by a facilitator to help individuals review and understand the results

and develop appropriate goals and objectives.

Dimensions

Responses are collected for items that fall under a specific dimension of job

performance. A single questionnaire may contain dozens of questions that

measure responses on one or more dimensions.

Example of dimensions are shown below.

• Problem Solving Items under this dimension measure how well a person can

understand information and options, give appropriate considerations to

information, make correct decisions, analyze and interpret information, and

react to changing situations.

• Planning and Organizing Items under this dimension measure a person's

ability to develop plans and objectives, develop long-term solutions, set

business objectives adhere to schedules.


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• Communication Items under this dimension measure the ability to present

information formally and informally in both written and orally. Also measures

the ability to communicate with customers, staff, peers and supervisors.

• Supervisory Skills Measures the individual's skill level in planning, organizing

and overseeing the work of subordinates. Also measures a person's ability to

manage work flow efficiently.

• Administrative Skills Measures an individual's ability to implement and

monitor actions to ensure compliance with policies and regulations. Also helps

identify the ability to distribute information, allocate staff and maintain records

or documents.

• Business Control Measure the skill in, and concern for, controlling expenses,

reducing costs, setting performance standards and reviewing budgets.

• Manager Potential Index A measure of the composite score of the scales

reflecting an individual\'s overall ability to successfully perform management

tasks.


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HOW 360-DEGREE FEEDBACK SYSTEM ADDS VALUE?

360 degree feedback enables an organization to focus on developmental efforts,

at the individual and group level, in the present business environment where the

success of the company depends on continuous revolution, which is possible

through organizational development. 360-degree feedback facilitates the

alignment of individual capabilities and behaviors with organizational

strategies. It adds value to the organization indifferent ways:-

o 360-degree feedback provides a better understanding of individuals

performance at work

o 360-degree feedback provides a multifaceted view about the

employees from different sources

o 360-degree feedback provides a better understanding of employed

developmental needs

o 360-degree feedback provides increased the understanding about

one's role expectations.

o 360-degree feedback provides increased the understanding of

competence and competency in various roles

o 360-degree feedback extends better morale to those who perform

and contribute well to the organization

o 360-degree feedback reduces training costs by identifying common

development needs.

o 360-degree feedback increases the team's ability to contribute to

the organizations goals

o 360-degree feedback helps everyone to work for a common

standard and institutionalize performance management.

o 360-degree feedback ensure better interpersonal relationship and

group cohesiveness

o It promotes self-directed learning and provides a road map for

employee's development planning.

o It promotes better Communication within departments.

o 360-degree feedback Increases the team's ability to contribute to

the organizations goals develop better bottom line through

boosting the capability of the organization to meet its objectives.


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360 DEGREE FEEDBACK BENEFITS

Employees should be aware of what 360 degree feedback benefits could mean

for them. The benefits centre on improving managerial performance which has

been demonstrated to have a substantial impact on productivity and

profitability. Evaluations typically achieve 90% agreement rates that the results

are useful.

The benefits apply at several levels:

Self-insight and learning. 360-degree feedback provides the opportunity

to see ourselves as others see us. This is the first step to help identify

strengths in one's management style that can be built on and areas of

weakness that can be redressed.

Focuses career development Discussions around feedback, strengths and

development areas are also useful for sharpening ideas about the future

and potential career directions.

Hard data. 360-feedback data provides quantifiable data on a range of

leadership and personal capabilities, enabling comparisons to be made,

both within and between managers.

Motivational. A programme of 360-degree feedback can have a positive

motivational effect on managers. The managers feel they are being

listened to as individuals and that they are receiving support in their

development and dealing with problems. Team members can similarly

experience positive motivation if they too feel they are being listened to,

and positive changes that affect their working lives follow.

Culture change Introducing feedback can subtly change the culture. An

atmosphere of open and honest feedback means decision making can be

more rigorous. Unsatisfactory behaviour can be identified and addressed

rather than swept under the carpet.

Competency approach. The use of competencies to define the

managerial behaviours valued in an organization helps integrate

recruitment, leadership development and performance appraisal into a

coherent framework.

Broader perspective. Performance management becomes more rounded,

taking a broader set of perspectives than just the manager.


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THE 360 DEGREE PROCESS

(1.) Self-assessment

Self-assessment encourages the individual to take responsibility for his or her

own development and is a useful starting point in the 360-degree feedback

process. Consideration needs to be given to the purpose of this information and

how it is used as well as who has access to this data and how long is it held for.

(2.) The raters

Identifying the most appropriate people to rate the performance of the

individual is a key part of the process. Ideally the recipient will have full

involvement in identifying who they think is in the best position to comment on

their performance. The raters must be credible to the recipient for them to act on

the resulting feedback.

Number of raters

The assessment has to be based on a large enough sample to ensure that it is

valid. If too small, there is a danger that one rater‘s view will have a major

impact on the overall results. 7 to 12 respondents are usually sufficient in terms

of reliability.

(3.) The questionnaire

The design of the assessment, reporting and feedback process should suit the

purpose of the exercise. It needs to describe the behaviours, which relate to

actual job performance. It should relate to existing measurement systems within

their area, such as competencies. It also needs to be in line with City‘s culture

and values.


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The questionnaire needs to be relevant to the raters and their day-to-day

involvement with the individual. A well-designed questionnaire should offer

respondents the opportunity to indicate where they have not had the opportunity

to observe behaviour, or where the behaviour is not relevant to the job, so as not

to force them to guess. Ideally the questionnaire should take between 15 and 30

minutes to complete.

Qualitative and quantitative data

The most effective questionnaire design is one that encompasses both

quantitative as well as qualitative elements. The quantitative elements provide

the structure and the qualitative questions provide the context.

(4.) Feedback strategy

It is important to consider what feedback is communicated and how

and when this takes place.

Feedback report

Feedback usually consists of a report. The design of the report should

be kept simple and ideally designed to help the individual priorities their

relative strengths and development areas Given that an individual is receiving

sensitive information about how their colleagues, direct reports and manager

view their performance, sensitivity is essential. Someone must be available to

help interpret the results with that person.

.

Trained facilitators

As 360-degree feedback is being used as part of the appraisal process,

feedback is communicated face to face. The people giving the feedback

(appraisers) must have had the relevant training to give them the skills to

support this process.


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When feedback is communicated

Ideally the individual receives feedback as soon as possible after that

feedback has been collated. It is important to ensure that people receive it when

there is support available to interpret the results e.g. as part of a supportive

appraisal process.


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360 Feedback- For Appraisal Or Employee Development?

In terms of communication management and performance feedback in the workplace, the 360

degree feedback methodology is becoming an increasingly common way of developing

employees, appraising their performance or in some companies; a combination of the two.

The concept behind 360 degree feedback, including its pros and cons; stating that it can be

defined as a ―contrived method of providing a flow of feedback to employees from all

directions‖.

However a key point standpoint is the discussion of conflicting views on whether 360 degree

feedback should be used primarily for employee development or performance appraisal. The

purpose of 360 degree feedback arguably creates a huge impact on the overall effectiveness

of the feedback to initiate positive change in employee performance as it has the potential to,

for example, influence what motivates the employee and what they hope to gain from the

feedback process itself.

http://hrclubsydney.com/2009/06/22/360-feedback-for-appraisal-or-employee-development/


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For instance, provision of feedback for development purposes will ensure the employee is

seeking accurate feedback from their manager and/or other raters in order to improve their

performance. This means they will be more open and receptive to the dialogue about their

performance. However, when the feedback is evaluative in nature, provided for a

performance appraisal for example, the employee desires to appear competent and attractive

in order to be scored as highly as possible, particularly if this rating is linked to a financial

reward or bonus. This then significantly reduces their willingness to be receptive to the

feedback provided and make the necessary changes to improve performance.

Moreover, when 360-degree feedback is used for purposes other than development such as

performance appraisal, the effectiveness (or perceived accuracy) of the feedback received,

arguably diminishes. For instance O‘Reilly (1994) asserts that when 360 degree performance

feedback is provided by raters for the purposes of development, the feedback is ―remarkably

similar‖. However when this feedback is gathered and used for more formal evaluative

purposes, the scores and feedback are different as friends pump up each others scores and

mark competitors as mediocre.

34 per cent of respondents in their study would rate their manager differently if the feedback

was used for a performance appraisal as opposed to developmental purposes and both raters

and those being rated are less fearful and more likely to be honest if they know results will be

used for personal development purposes. In the same way it may encourage gamesmanship

and ‗behind-the-scenes‘ deals.

I found this article really interesting- but at the same time- it all makes so much sense. It will

really make good business sense to consider first WHY you are doing 360 degree feedback-

is it for developmental or evaluative purposes- and what is the outcome you need.


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ADVANTAGES OF 360 DEGREE APPRAISALS

o Provides a more comprehensive view of employee performance.

o Increases credibility of performance appraisal.

o Feedback from peers enhances employee self-development.

o Increases accountability of employees to their customers.

o The combination of opinions can approximate to an ‗accurate‘

view

o Comments expressed by several colleagues tend to carry weight

o Some skills are best judged by peers and staff, not by manager

alone

o Feedback may be motivating for people who undervalue

themselves

o The wider involvement help to engender a more honest

organizational culture

DISADVANTAGES OF 360 DEGREE APPRAISALS

o Time consuming and more administratively complex.

o Extensive giving and receiving feedback can be intimidating to

some employees.

o Requires training and significant change effort to work effectively.

o Results can be difficult to interpret

o Feedback can be damaging unless handled carefully and

sensitively

o Can generate an environment of suspicion if not managed openly

and honestly

The 360-degree appraisal significantly differs from the traditional

supervisor-subordinate performance evaluation. Rather than having a

single person play judge, a 360-degree appraisal acts more like a jury.

The people who actually deal with the employee each day create a pool

of information and perspectives on which the supervisor may act. This

group of individuals is made up of both internal and external customers.


T.Y.B.M.S Page 30

Using 360-degree appraisals provides a broader view of the

employee‘s performance. The most obvious benefit of the 360-degree

appraisal is its ability to corral a range of customer feedback. Because

each customer offers a new, unique view, it produces a more complete

picture of an employee‘s performance. Unlike with supervisors,

employees can‘t hide as easily in 360-degree appraisals because peers

know their behaviors best and insist on giving more valid ratings. In

addition to providing broader perspectives, the 360-degree appraisal

facilitates greater employee self-development. It enables an employee to

compare his or her own perceptions with the perception of others on the

employee‘s skills, styles, and performance.


T.Y.B.M.S Page 31

RISK OF 360 DEGREE PERFORMANCE APPRAISAL

Appraisal of performance is not the same as an assessment of 360 feedbacks.

Here are some of the risks of 360 degree feedback appraisals.

Discrimination from Raters

They can distort the peer performance appraisal information to help or

harm the employee being rated.

Mistrust of the 360 degree performance appraisal system

If a business or organization already has a culture of suspicion and

mistrust of management by the employees, a 360 degree evaluation

feedback will not work.

Employee perception of rating

Employees receiving negative performance appraisal comments will

focus blame on the co-workers and supervisors who are the raters. Raters

are normally selected anonymously so the employee doesn‘t know

exactly who is evaluating them and did not give them a good rating of

performance and appraisal.


T.Y.B.M.S Page 32

THE PROBLEM WITH 360 FEEDBACK

This is a good challenge to using 360 Degree Feedback as a means of

communication in an organization. I would respond as follows:

Face-to-face communication, with immediate and relevant feedback is of

course the best way to manage individuals and teams. 360 Degree

Feedback should never be used as a substitute for this, or as a way of

avoiding difficult conversations.

360 Degree Feedback is part of a wider set of activities that helps people

to understand their own skills and how they can grow as managers or

leaders in their organization. That‘s why generic 360s are less useful that

those that are customized and aligned with the organization‘s goals.

Even in organizations with good face-to-face feedback, we find that

individuals who receive 360 Degree feedback are often surprised at the

perceptions of others about them, and that this can lead to an increased

awareness of their day to day behaviours and their impact on other

people.

And in an ideal world, of course I should tell my boss when I‘m not

happy that she chews me out in front of the rest of the team…and she

should accept that feedback directly from me and without any

reprecussions, but we know that‘s not always the case. And maybe my

boss needs to understand that a number of other people might feel that

way? 360 is a great way of getting that message across. Used correctly

and in the right situations, 360 Degree Feedback is a very powerful tool

for development; please don‘t throw the 360 Degree Feedback baby out

with the bathwater

!TRACK: THE RIGHT TRAINING, FOR THE RIGHT PEOPLE, AT THE

RIGHT TIME

http://lundinoninnovation.wordpress.com/2008/11/22/why-360-feedback-may-not-be-such-a-good-thing/

http://tracksurveys.co.uk/

http://www.tracksurveys.co.uk/




T.Y.B.M.S Page 33

DOES 360-DEGREE FEEDBACK NEGATIVELY AFFECT

COMPANY PERFORMANCE? STUDIES SHOW THAT 360-

DEGREE FEEDBACK MAY DO MORE HARM THAN GOOD.

WHAT'S THE PROBLEM? - PERFORMANCE

MANAGEMENT - STATISTICAL DATA INCLUDED

"If we practiced medicine like we practice management--based on hunch,

intuition and ideology--we would have much more malpractice and a lot of

mortality and morbidity."

Those are tough words from Dr. Jeffrey C. Pfeiffer, professor of organizational

behavior at Stanford University and a leader in management thinking, but they

are on the mark. Too many organizations base their human resources

investment decisions on tradition, fads or competitors' practices, instead of on

sound financial measures.

A perfect example of this phenomenon may be 360-degree feedback. Adopted

by a growing number of organizations, 360-degree feedback is widely accepted

as an effective performance management tool.

However, new research shows that 360-degree feedback programs may hurt

more than they help. Watson Wyatt's 2001 Human Capital Index (HCI), an

ongoing study of the linkages between specific HR practices and shareholder

value at 750 large, publicly traded companies, found that 360-degree feedback

programs were associated with a 10.6 percent decrease in shareholder value.

That doesn't necessarily mean 360-degree feedback programs should be

abandoned. But it does mean organizations should take a second look at their

performance management programs to see if they are accomplishing what they

are supposed to.

Popularity of 360-Degree Feedback

360-degree feedback is a performance appraisal approach uses input from an

employee's supervisors, colleagues, subordinates--and, sometimes, even

suppliers and customers. Most 360-degree feedback programs focus on the

manager level and above.


T.Y.B.M.S Page 34

The use of 360-degree feedback has grown dramatically in recent years.

According to HR consulting firm William M. Mercer, 40 percent of companies

used 360-degree feedback in 1995; b 2000, this figure jumped to 65 percent.

The premise behind 360-degree feedback is logical: The people who work most

closely with an employee see that person's behavior in settings and

circumstances that a supervisor may not. And, in theory, the more complete the

insight into an employee's performance, the more likely he will understand what

needs to be improved and how.

The theory is very promising. The reality, on the other hand, is another matter.

Watson Wyatt's 2001 HCI report revealed that companies using 360-degree

feedback have lower market value. According to the study, companies that use

peer review have a market value that is 4.9 percent lower than similarly situated

companies that don't use peer review. Likewise, companies that allow

employees to evaluate their managers are valued 5.7 percent lower than similar

firms that don't.

Taken together, these practices are associated with a 10.6 percent decline in

shareholder value.

Voices of Doubt

The HCI study is not the only indicator that 360-degree feedback programs may

be failing to match their promise. Researchers and formerly strong advocates of

360-degree feedback have begun to raise questions. Jai Ghorpade, a professor

of management at San Diego State University, wrote in the Academy of

Management Executive that, "while it delivers valuable feedback, the 360-

degree concept has serious problems relating to privacy, validity and

effectiveness."

Ghorpade also reported that out of more than 600 feedback studies, one-third

found improvements in performance, one-third reported decreases in

performance and the rest reported no impact at all.

John Sullivan, professor of human resource management at San Francisco State

University, says "there is no data showing that [360-degree feedback] actually

improves productivity, increases retention, decreases grievances or is superior

to forced ranking and standard performance appraisal systems. It sounds good,

but there is no proof it works."


T.Y.B.M.S Page 35

Roots of the Problem

Why is 360-degree feedback failing to live up to its potential? For starters,

giving effective appraisals is a difficult task. Unless everyone participating in a

360-degree program is trained in the art of giving and receiving feedback, the

process can lead to uncertainty and conflict among team members.

Another issue is that there may be a gap between an organization's business

objectives and what 360-degree feedback programs measure. Typical 360-

degree feedback programs assess competencies that are not directly related to

business results or are so broad that they aren't relevant to the average

employee.

The time and cost associated with 360-degree feedback also are stumbling

blocks. By trying to capture every nuance of a worker's performance, many

360-degree feed-back programs have become so complex that they require a

much greater investment in time and money than they can return.

Another common problem: Reviewers and those being reviewed fail to follow

up after feedback. When there are no consequences for poor performance--

which often is the case with 360-degree reviews--performance won't change.

Mend It, Don't End It

Despite these drawbacks, there are good reasons not to give up on 360-degree

feedback.

The process still holds the potential to deepen employees' understanding of their

own performance. And, it may be able to help companies create value by better

aligning job performance with business strategy.

The question is this: Can 360-degree feedback be implemented in such a

way that it achieves these benefits without negatively affecting the

bottom line? Based on our analysis--and conversations with clients-- we

believe the following steps may help companies transform 360-degree

feedback into a value creator, not destroyer.

* Implement 360-degree feedback for the right reasons. "The first thing you

need to ask is why you're doing it," says Paul Rudely, a New York-based

executive coach. If you can't articulate a strong business case for a 360-degree

feedback program, it should not be introduced.


T.Y.B.M.S Page 36

Jeff Seretan, head of human resources for Barclay's Global Investors, based in

San Francisco, agrees. "You should not implement it unless you can show that

it is solving a problem or adding value," he says.

Barclay's uses 360-degree feedback to provide senior executives with input on

their management styles. "Our executives had minimal input into their

leadership styles, so our goal was to address these information gaps," Seretan

explains.

* Assess the costs of the program. Employers must "assess the real burden they

are placing on the organization by doing 360-degree feedback," Seretan says.

"If you don't do it in a way that is targeted and strategic, you run the risk of

value destruction.

* Focus on business goals and strategy. Feedback should provide employees

with insight into the skills they must develop to help the organization meet its

goals.

* Do not rely solely on 360-degree feedback. Employees must receive regular,

timely feedback about their day-today performance. "360-degree feedback is

just one part of our approach," Seretan says.

Rudely likes to use 360-degree feedback as a baseline for a more in-depth look

at an individual's performance profile. "While I've yet to see a 360 that was

inaccurate, often they can stand to be fleshed out a bit," he says.

He recalls one 360-degree feedback assessment that made an employee "look

like Mother Theresa." The woman was very talented, he says, "but nobody

walks on water like that. I conducted a series of personal interviews with the

woman's raters to follow-up. After the interviews, I had a much better view of

her strengths and weaknesses."

Additional interviews won't always be necessary, but companies should

consider using them in situations where they can help clarify the results of 360

feedback. Ultimately, the thing to remember is that 360 feedbacks is just one

part of an overall performance management system.

* Get support at all levels of the organization. Make sure executives play a key,

visible role. And, give line employees a voice in designing and implementing

the program to ensure relevance and ownership. A 360-degree feedback

program is doomed if HR is its only champion.


T.Y.B.M.S Page 37

* Train people in giving and receiving feedback. Companies that implement

360-degree feedback without first checking and developing managers' feedback

skills risk serious damage to teamwork and morale. Providing constructive

feedback takes instruction, training and practice.

While training individuals to give and receive feedback may temporarily

increase the expense associated with 360-degree feedback programs, the

gains will outweigh the higher costs as the feedback delivered to

participants becomes more focused, targeting the behaviors most closely

associated with value creation and destruction. Ultimately, the goal

should be to create a culture in which individuals feel comfortable giving

and receiving feedback--both positive and negative--on a real--time basis,

rather than waiting for an annual review.

* Create an "action plan" for each employee based on the feedback. "Knowing

what to do and not doing it doesn't get you very far," Pfeiffer says.

Rudely recommends that individuals sit down with their managers and their

subordinates and review scores. "They should present their scores and then ask,

'Which ones do you think are the most critical to being as effective as possible,

and what tactics are necessary to get there?"'

Companies should identify and enforce rewards and consequences for

individuals related to their success in following their action plans. "If the

program is just another add-or and not part of a scorecard, you're kidding

yourself," Rumely says.

Monitor implementation, ask for ideas for improvement and make adjustments.

Companies don't always get 360-degree feedback exactly right on the first try.

By monitoring results, asking for feedback on the process and implementing

changes based on the answers, companies may be able to put 360-degree

feedback programs back on track.

It also helps to continually benchmark results against the objective articulated at

the outset. "For us, the test is not whether we have a program in place, it's

whether we got the desired result," Seretan says.

* Recognize that 360-degree feedback is not a panacea. Just because an

individual receives insight into his behavior doesn't mean he can--or will--

change it. Traditional performance management systems have struggled with


T.Y.B.M.S Page 38

this axiom for years, and it is naive to think that 360-degree feedback programs

will be significantly different.

Take Another Look

The findings about 360-degree feedback programs are eye-opening. The fact

that they are associated with a decline in shareholder value should persuade HR

managers to revisit their existing or planned 360-degree feedback programs.

The existence of such data also should force companies to ask themselves what

they hope to gain from 360 reviews--or, for that matter, from any HR initiative

they undertake. What is the potential return on investment (ROT)? How do ROI

projections compare to actual performance? And, if expectations haven't been

met, what can be done to improve the effectiveness of these programs?

Implementing a successful 360-degree feedback program is akin to managing

your own investment portfolio: You can come out ahead, but it takes work.

Feedback Varies with Your Point of View

By Kenneth M. Nowack

Multi-rater feedback can raise more questions: How is an employee to react, for

example when his manager gives him negative ratings while feedback from his

direct reports an peers is situation. Research suggests than disagreement

between rate groups is common-and that the resulting confusion creates

challenges for employee development.

The strength of 360-degrees feedback is that it reflects him varying perspectives

of different rate groups. That's also part of the problem. What one group views

as effective behavior, another group may see as problematic.

And each rater group brings natural biases to the table. For example studies

conducted by Organizational Performance Dimensions find that supervisor

feedback tends to be based no bottom line results (are tasks completed on time


T.Y.B.M.S Page 39

and well?) technical competence and whether an employee's behavior draws

complains or clients.

By contrast direct reports base their reviews on factors such as willingness to

involve the direct report in decisions interest in a direct reports professional

development and trustworthiness

Peers who lack perspective on their colleagues' day-to-day performance tend to

focus on leadership potential. Their remarks often reflect opinions or whether

the participant has the "rights stuff" to motivate and create a compelling vision

for others to follow.

None of these perspectives is wrong and all of these insights can be valuable in

creating a 360-degrees view of performance. However it's important that the

person being reviewed-and his supervisors-understand how the filters used by

different groups affect how they rate performance.

Kenneth M. Nowack is a licensed psychologist and director of Organizational

Performance Dimensions, a Santa Monica Calif: based company specializing in

360-degree-feedback.

Focus on Why and How

Jai Ghorpade

In evaluating the effect of 360-degree feedback--on any HR practice--on firm

performance we must ask why companies about it. For example in the 1930s

many troubled companies adopted Joe Scanion's group incentive plan. As a

result a snapshot of companies using the Scanion Plan at that time would have

shown that the plan was associated with poor performing companies.

Therefore, I suggest caution in interpreting the Watson Wyatt study. We nee to

know more about companies motivation for adopting 360-degree feedback as

well as their financial condition before and after adoption. Perhaps the

researchers can ferret out this information.

Assuming there is some truth to the Watson Wyatt report. I would like to focus

on a potential explanation provided by Plau and Key for why 360-degree

feedback is not living up to its advanced billing. The authors state that there

may be a gap between an organizations business objectives and what 360-

degree feedback programs measure. I strongly emphasized this point in an


T.Y.B.M.S Page 40

article they cite, which appeared in the January 2000. Academy of Management

Executive.

But I believe the problem goes beyond congruence with company objectives.

Most companies using 360-degree feedback tent to employ generic off-the shelf

instruments that are of interest to psychologists but may not have much

relevance to the organizational context in which they are being used. It is a

question of the relevance of the behaviors and traits on the feedback

instruments to specific interpersonal and cultural problems a specific company

laces are a specific time.

Assuring context relevance is not easy and calls for a very different type of

competency on the part of the HR professionals and other who are helping

companies to use 360-degree feedback.


T.Y.B.M.S Page 41

THE DANGERS OF USING 360 DEGREE FEEDBACK FOR

PERFORMANCE APPRAISAL- DAVID LASSITER

In a time of low unemployment and transient loyalty, knowledgeable

managers are keenly aware of the need to motivate, develop, and retain quality

people. Research has clearly indicated that employee satisfaction is a key

ingredient to loyalty and retention and is heavily influenced by feedback on

performance. Managers increasingly, and mistakenly, look to 360-degree

assessment as a quick and easy solution to the feedback dilemma.

Trend:

Inappropriate use of 360 degree feedback can unravel years of

environment building effort and huge investments of bottom line dollars. It is

not, however, the "silver bullet". There is a rising demand in organizations for

improved performance and results. American business during the 1970's and

'80's was in serious trouble. In the 1990's, this situation provided the energy for

finding new approaches and processes to boost performance. In the new

century, organizations in all sectors are challenged to operate even more

responsively and efficiently. Raising individual and team performance levels is

central to this process and 360 feedbacks have been increasingly used as part of

the solution. Unfortunately, there is an advancing drift toward using 360

feedbacks for performance appraisal. Organizations need to be careful here.

Using 360 for appraisal may be an intriguing idea, but it's not the appropriate

use of this powerful new technology. Used for appraisal purposes, It can put the

organization at unnecessary risk and has a negative impact on motivation,

performance, and the entire work environment.

Tools With Different Purposes

At its best, performance appraisal is an evaluative process used to

determine results. Its' purpose is to measure and evaluate contribution to the

organization in order to provide feedback, and fairly distribute rewards.

Performance appraisal allows employees to more clearly see the results of their

efforts, the relationship between their job and the organization's performance,

and be rewarded for their particular contribution.

360 feedbacks is a developmental tool. It is designed to encourage

employees to grow and develop by providing feedback on their proficiency in

the skills, competencies, behaviors, and practices related to the conduct of their


T.Y.B.M.S Page 42

jobs. By design, it is good at identifying, measuring, and improving the skills

and competencies needed to perform successfully. It is especially good for the

hard-to-quantify interpersonal areas (often labeled the 'soft skills') of behaviors

and practices. Examples of this include listening, informing, resolving conflict,

coaching, teamwork, and leadership. Performance appraisal, on the other hand,

is effective for measuring outcomes and results, what people are actually hired

for and paid to produce. It is designed to clarify and document the goals,

outcomes, milestones, time frames, and measurements to be used. Performance

appraisal and employee development are separate and distinct processes with

different purposes and different measurement tools. They can and do

complement each other. They are related, but they are distinct.

Problems With The Linkage

It is too often assumed that since multi-source is better than single

source, automated is faster than manual, and evaluating performance (results) is

the same as measuring proficiencies (skills, competencies, etc.), then 360

feedback is simply a more efficient and effective tool for conducting appraisals.

Assumptions like these can get you in trouble. For developmental purposes,

multi-source feedback does have more validity and leveraging ability than

single source. It is broader and brings in multiple and more balanced

perspectives. But inexperienced multi-source raters are generally not as adept at

providing balanced and objective feedback as the single source supervisors they

may be replacing. They can have enormous problems separating honest

observation from personal differences and biases. For appraisal purposes, co-

workers are insufficiently qualified to give evaluative feedback that affects pay

and promotion.

Because 360 feedbacks are usually automated or web-based, it has

what marketing people call "sizzle". But is it appropriate to performance

appraisal because of its speed and ease? What is it that makes appraisal or

development particularly effective? Research indicates that it is the quality of

the conversation between the manager and the employee that is important.

Being able to explore and discuss aspects of one's work with clarity and without

the usual time pressures is highly valued by most employees. It is the quality of

the interaction, the essential performance conversation that provides motivation

and builds trust and loyalty.

Performance appraisal in most organizations is used to determine

merit increases and bonus amounts. However, if 360 feedbacks are linked to

compensation decisions, it loses its power and benefit as a developmental tool.

When employees recognize that their financial rewards are based on multi-


T.Y.B.M.S Page 43

source feedback ratings, they quickly see how the new game is played.

Realizing what is required to achieve a good appraisal, employees can

manipulate the process to ensure the desired outcome. The 'rate' can be helped

or hurt. Putting two and two together, employees realize that "if you scratch my

back, I'll scratch yours." Suspicions that were formerly directed at performance

appraisal are now focused on 360 feedback. The "new" system becomes tainted.

Trust and honesty begin to break down in favor of getting a good review. As a

result, actual skill proficiencies can decline which, in turn, leads to a weakened

ability to compete or deliver, and a performance environment of mediocrity.

This can result in defensiveness, denial, conflict, accusations, and loss of trust.

It puts the relationships within the work group in jeopardy and can lead to a

decline in productivity and performance.

Finally, organizations using 360 feedbacks as a performance

appraisal tool are exposing themselves to increased liability. 360 feedbacks is

not a tested or validated mechanism for performance appraisal. An organization

needs to be prudent and consistent with the standard and proven performance

appraisal approaches.

Potential Dangers

Skill levels stay relatively flat or even decline because the "360 appraisal" is

not taken seriously.

The numbers needed for a "good" appraisal can be informally fixed by silent

agreement among raters. Maximizing the size of the increase or bonus

overshadows the desire to elevate performance.

Individual development plans become window dressing. People may go

through the motions to create them but expend little effort in implementation.

When not held accountable for this, performance levels off.

If employees don't get a "good" appraisal, blame is placed on co-workers

causing a rise in the level of mistrust and apprehension. The work environment

becomes politicized, candor and honesty are compromised, trust and integrity

are damaged, risks are avoided, motivation diminishes, morale drops,

performance declines, and turnover rises.


T.Y.B.M.S Page 44

The Bottom Line

Executives and managers considering the use of a 360-feedback tool for

performance appraisal need to be aware of the inherent differences between

them. The bottom line: Keep developmental feedback separate from appraisal

and compensation decisions. Using 360 feedbacks for the wrong reason can

result in decreased trust, loyalty, and performance, and increased risk. Large

investments of time, money, and credibility will be lost.


T.Y.B.M.S Page 45

How To Avoid The Dangers Of Using 360 Feedback In

Performance Management - By Dennis E. Coates

This early form of multi-source (360) feedback was practically unknown in

business organizations thirty years ago. 360 did not become popular until the

late 1980s, and then mostly as an executive development tool. Today, it has

been introduced into most Fortune 1000 companies, and its use is spreading. It

is now affordable enough to use with all employees, and it's also flexible

enough to use in a variety of applications, such as team development, customer

feedback and organization climate surveys.

Senior managers are intensely interested in this application, because

performance appraisal has been a perennially frustrating area of human resource

management. On the one hand, managers need ways to let people know how

they are doing and to document individual achievements and problems. On the

other hand, few organizations have set up appraisal systems that do this without

creating discontent, distrust, loss of productivity and law suits.

The new 360 feedback technology is viewed by many as an intriguing solution

to the problems with traditional performance appraisal. With ratings coming

from many sources, evaluations can have greater validity. With on-line input

systems, people can give ratings and comments quickly and conveniently. The

desire to use 360 technologies for performance management is strong, even

though a pattern of real-world successes and best practices has not been

established.

Most managers don't understand the risks of using 360 feedbacks as a platform

for performance management. Furthermore, they aren't aware that this concept

is a major controversy among HR practitioners. . 360 evolved over two decades

as a developmental feedback process, not as a performance appraisal process.

Experts agree that computerizing an appraisal system will not correct its

inherent problems. While multi-source judgments are usually superior to

single-source judgments, experience has shown that linking competence data to

pay and personnel decisions introduces unacceptable biases into ratings, thereby

rendering the assessment system invalid.

Still, many organizations are boldly going into uncharted territory, encouraged

by authors who suggest that with the right technology and know-how, they can


T.Y.B.M.S Page 46

work around the issues. Computer programs that facilitate 360-based appraisal

have appeared positioned to capitalize on an expressed need in the market. At

the same time, most experts and organizations are backing away from this

application.

Why? Are the dangers real? Is 360-supported performance management too

good to be true? Can it be achieved with the right know-how? In the end, will

the judgment of bold executives prove to be superior to the cautiousness of

human resource professionals?

Using 360 feedbacks in the context of performance management involves

significant risks that no prudent manager should underestimate. It's as if a dark,

mysterious territory separates managers from the promised land of high-tech

appraisal. But approaching this territory is like visiting a great city. The

payoffs are there, but part of the journey is knowing where not to go and what

not to do. Guides promise to lead the way, but a prudent traveler should make

some preliminary inquiries. What's involved in this path? What are the

options? What are the risks? What are the costs? How to minimize risks and

obtain the maximum benefit when using individual 360 feedback in the context

of performance management. The prudent path has three guideposts: (1) Link

competence feedback to development decisions, (2) Link results feedback to

pay and other personnel decisions, and (3) Maintain confidentiality.

Guidepost 1: Link competence feedback to development:

Using 360 successfully in performance management requires a clear

understanding of what is meant by "performance."

The word performance refers to results what gets accomplished. Have

individuals, teams and organizations achieved their goals? Are standards being

met? Are projects completed on time? Are products and services delighting

customers? Have business goals been achieved?

The word performance also means something else: competence how well

people do their work. Are people knowledgeable and skilled? How effectively

do they use their skills? How well do employees interact with each other?

How do people treat their customers? Are procedures effective? How is the

work getting done?


T.Y.B.M.S Page 47

Managing performance means managing both results and competence. Both

aspects can be measured, but they should be measured differently and

separately.

Measuring competence as the first step to self-improvement is the best use of

360 feedbacks. In this role, there are no concerns about using the results to put

someone's career or compensation in jeopardy.

It's important to keep in mind that 360 feedbacks is not the best tool for

measuring competence that is already easily quantified/measured. This

includes most technical areas. For example, why would you ask for several

people's opinions about someone's typing ability, when all you have to do is

conduct a five-minute performance test?

However, many key workplace skills and activities are exceedingly difficult to

quantify and measure. These encompass mostly the interpersonal dimension of

work: communication, team interaction, leadership, customer service,

consulting, sales, negotiation, presentation, instruction and facilitation. Because

multi-source feedback uses scaled ratings from a variety of sources on

researched areas of performance, its able to compile remarkably objective

performance data, and modern 360 administration software programs make

doing so a relatively simple, cost-effective procedure.

Guidepost 2: Link results feedback to pay and other personnel decisions.

There's nothing wrong with linking feedback to personnel and pay decisions,

provided that the feedback is about results. People should be held accountable

for results and rewarded for achieving them. But in a desire to "pay for

performance," organizations sometimes mistakenly focus on the competence

aspect, rather than the results aspect of performance. They make this error

because of a failure to appreciate the distinction between competence and

results, and because 360 feedback makes it easier to gather competence data

than results data.

The magnitude of the error has to do with the fact that it's enormously

expensive to administer compensation programs. If the rewards don't have the

desired impact on results, this huge investment is largely misdirected.

However, executives have learned that rewarding only business results can have

unintended negative consequences.


T.Y.B.M.S Page 48

Rewarding results is a simple concept, but the challenge is to set the right goals,

which is the responsibility of senior managers. Leaders must be wise enough to

define outcomes that actually help an organization achieve its vision. Some

organizations overemphasize financial objectives, not appreciating that if they

don't also focus on employees and customers, the desired financial results will

eventually falter.

The key is to know which outcomes will contribute most to the organization's

success, measure them and reward their achievement. It's better to focus on

major results rather than on a comprehensive list. And it's important to specify

end outcomes, not in-process milestones. Furthermore, desired outcomes

usually involve a team effort. Therefore, team goals and team rewards are often

more appropriate than individual ones.

Most business goals are easily quantified, and effective methods for

measurement already exist. In this case, 360 assessment systems will not be

needed; it wouldn't make sense to ask for opinions about on-time deliveries,

improved quality, reduced waste, safety, sales, new accounts, market share,

project phases completed, profit, return on investment, etc., because effective

systems already exist to compile and track this information.

However, some key results are hard to quantify. For example, how would you

measure whether a leader was taking care that creates desired business

outcomes? How do your customers feel about the way you treat them? Can be

find out by using customized customer satisfaction surveys. How do team

members feel about working in their group? You can find out using team

climate surveys. Some 360 software programs are flexible enough to

administer customized climate surveys, although it's important to keep these

surveys separate from individual development assessments. Using the results of

a baseline survey of carefully chosen leadership outcomes (such as levels of

trust, loyalty, commitment, cooperation, professional satisfaction, development,

etc.), specific results goals tied to leadership, communication, relationships and

team development can be agreed upon.


T.Y.B.M.S Page 49

To illustrate, the following items may be included in a team climate survey:

- The work of our group helps fulfill the organization's vision and values.

- The activities of my unit are well planned.

- The people who work around me show concern for our customers.

- My colleagues encourage each other when work is challenging.

- I feel empowered to do my best work.

- Adequate resources are available to achieve my goals.

- I work in a safe environment.

- I trust my boss.

- I have the freedom of action I need to do my job.

Wise leaders understand that in a busy workplace, people focus on specific

results only if there is a significant benefit for doing so. People may have the

"know-how," but they also need the "want-to."

Unlike praise, salary increases and bonuses have the power to help employees

care for elderly parents or put their children through college. Successful

organizations have learned to define what they need from people, empower

them and hold them responsible for results. When these payoffs are achieved,

the people responsible are rewarded financially.

Guidepost 3: Maintain confidentiality.

Confidentiality safeguards and the perception of confidentiality are essential to

the validity of the information gathered. The most important way to protect

confidentiality is to limit the feedback that managers see. Coworkers may want

to give a person honest feedback, because they know that if the individual

doesn't face up to the truth, changes in behavior are unlikely. On the other

hand, coworkers don't want their ratings and comments to be seen by managers

who make personnel and pay decisions. They don't want to be responsible for

drastic career consequences. In short, they may want an individual to have

specific developmental feedback but only the individual and only for

development.


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Assurances of confidentiality are based on trust, and this trust must be earned.

People may believe their managers when they are told that 360 inormation will

be safeguarded and used for development only. But if they discover that they

were misled, trust will be lost immediately and in most cases can never be

restored. This consequence would render a 360 system useless as a

development tool.

Eg:1 One division of a large communications company began using 360

feedbacks for team development. When faced with the need to "downsize,"

managers concluded that the 360 performance data would help them decide

who to keep and who to let go. When employees discovered what was

happening, they raised such a furor that the company had to abandon the use of

360 altogether.

Eg:2 A regional bank experimented with using 360 feedbacks for management

development. But the organizational climate was characterized by low trust and

internal politics, and many people feared that the data would be used for

personnel and pay decisions. As a result, several participants found ways to

avoid or sabotage the process. With the pilot program in disarray and the

expected benefits unachieved, those who opposed the program used their

influence to eliminate it.


T.Y.B.M.S Page 51


T.Y.B.M.S Page 52

ARGUMENTS AGAINST 360 DEGREE PERFORMANCE

APPRAISAL

Despite the fact that 360 degree appraisals are being widely

used throughout the world for appraising the performance of the

employees at all levels, many HR experts and professionals argument

against using the technique of 360 degree appraisals. The main

arguments are:

360 performance rating system is not a validated or corroborated

technique for Performance appraisal.

With the increase in the number of raters from one to five

(commonly), it becomes difficult to separate, calculate and eliminate

personal biasness and differences.

It is often time consuming and difficult to analyze the information

gathered.

The results can be manipulated by the employees towards their

desired ratings with the help of the raters.

The 360 degree appraisal mechanism can have a adversely effect the

motivation and the performance of the employees.

360 degree feedback – as a process- requires commitment of top

management and the HR, resources (time, financial resources etc),

planned implementation and follow-up.

360 degree feedback can be adversely affected by the customers‘

perception of the organization and their incomplete knowledge about

the process and the clarity o f the process.

Often, the process suffers because of the lack of knowledge on the

part of the participants or the raters.



T.Y.B.M.S Page 53

360-DEGREE PERFORMANCE APPRAISALS: MORE

VALUE, OR JUST MORE TO IGNORE?

Although it seems like performance evaluations should be a logical and

productive part of an employee‘s development, they are often not anything

more than ignored.

Employees often consider the process biased, with unsupported ratings that do

not reflect the work they actually do. The appraisal either just pats them on the

back, or criticizes them with no workable suggestions for improvement. Their

review has become just another distraction during the annual (or less frequent)

evaluation process. On the other hand, managers for the most part aren‘t

equipped to give productive feedback; often they are afraid to provide negative

feedback because of legal threats or they do not want to adversely affect

someone‘s already small bonus; they are forced to spend hours filling out

detailed forms and looking up figures or trying to remember specifics to

evaluate their direct reports.

There is a way to do performance evaluations more effectively, a way to save

the process from becoming disregarded. Multi-rater or ―360-degree‖ appraisals

can provide an accurate and acceptable way to evaluate performance while

saving managers time and effort.

360- Degree appraisals improve on any evaluation done by one person by

combining ratings from many people who see different parts of an employee‘s

performance. For example, direct reports probably have the best understanding

of someone‘s delegating skills, while managers probably see someone‘s results-

focus most clearly. To get a complete image of performance, then, data is

gathered from others with various relationships to the employee. It often

provides an eye-opening comparison that can serve as a good starting point for

development. Gathering input from all of these points-of-view provides a fuller

picture of someone‘s performance. In simple terms, 360-degree appraisals give

a ―3-dimensional‖ performance report, whereas traditional performance

appraisals only give a ―1- dimensional‖ report.

Traditional performance appraisals often focus on goal attainment: how close

did someone come to their sales goal, or did someone meet the minimum

customer service rating. Most likely, there are only a couple of people in the

organization who have the data to answer these types of questions. Because of

this, goal-based appraisals limit the amount of input that is available for a


T.Y.B.M.S Page 54

performance appraisal. 360-degree appraisals broaden the amount of usable

input to target perceptions of an employee‘s effectiveness. This approach takes

advantage of the various relationships represented in the group of raters. So,

while typically only an employee‘s boss knows whether her/his cost-cutting

goals were met for the most recent quarter, many more people will have

perceptions of that employee‘s financial skills, diligence, fiscal responsibility,

etc–all the things necessary to reach those goals. Also, by concentrating on

competencies rather than goals, the data readily lends itself to personal

development.

These features of 360-degree appraisals offer several advantages that help

prevent it from just becoming ‗more to ignore‘:

Gathering input from multiple sources ensures that individual ratings can be

anonymous. Each rater, then, can be encouraged to be open and honest since their

feedback cannot be singled out from the groups.

Multiple sources of data also mean that ratings reflect multiple perspectives instead of

the single top-down view afforded by traditional appraisals. Combined with the added

anonymity, these ratings should give a fuller, more accurate picture of an employee‘s

performance.

Since the data describes perceptions of effectiveness, using feedback for personal

development is very easy. Instead of showing someone that they made their goals or

not, or providing feedback in personality terms (which, more often than not, feels like

a personal attack), an employee is shown how others perceive his/her behavior.

Behaviors and perceptions are much easier to change than personality. And, unlike

met or unmet goals, behaviors are specific and directly actionable.

Managers only have to complete one form per employee, usually taking about 15

minutes each. There are no figures to research, no goals to look up from last year, no

distribution of overall performance to worry about, no endless comparisons between

employees. Compared with other performance appraisal approaches, managers are

saving time and employees are getting more useful performance feedback.


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THINKING TWICE ABOUT 360 DEGREE PERFORMANCE

APPRAISAL

ROBERT H. KENT, PH.D., CMC

The basic concept in 360 Performance Appraisal of soliciting performance

feedback not only from our supervisor but also from our customers, employees,

peers and all whom we interrelate with in the course of doing our job, makes

obvious sense.

But organizations should have concerns about the 360 feedback concept in the

context of a performance appraisal. Many organizations have jumped on this

bandwagon without sufficient consideration. In looking at the 360 feedback

performance review process, please consider the following:

One -Feedback should be solicited continually:

Performance "appraisal" is better called performance "review" since it is the

closing stage of a performance management process which begins with the

clarification of performance direction and expectations. A Performance Review

is a review or comparison of actual performance during the review period, with

the past direction, and an opportunity to set future direction (reviews are also

used for formal documentation and for use in employee development,

promotion and compensation decisions). A Performance Review is never the

occasion for the employee to discover how well he's performed or to find out

what was expected of him during the review period.

The employee should be aware of that (his individual performance related to the

performance expectations) continually throughout the review period.

A Performance Review is principally between the employee and whomever the

employee is responsible and accountable to. Realistically, in most organizations

this is the "boss." At the review it would be insightful, and for some jobs

essential, to review how the employee met client and/or peer expectations.

But, the degree to which an employee meets client, supplier, peer or subordinate

expectations is not what an employee comes to a Performance Review to

discover. It's too late to learn that information at the end of the review period.

That feedback should be solicited continually by the employee throughout the

review period, and then the results of this feedback activity reviewed at

Performance Review time.


T.Y.B.M.S Page 56

If knowing how others perceive you is important for the performance of your

job, then measuring that and taking appropriate action on that feedback should

be part of your job and included in your job's performance requirements.

It seems irresponsible to abdicate that to a third party, like an HR department or

a survey company to do for you. Do effective salespeople rely on someone else

to tell them, at year's end, whether their customers were pleased with the

service? And if relationships are so horrid that management can't get honest

feedback directly from its employees, then the real problem won't be solved by

implementing a 360 Appraisal process.

Two - A Company Culture that Uses Secret Reports?

A common approach to 360 Appraisal is to administer confidential surveys,

especially so people can rate their peers and supervisor. Anonymity is ensured

and employees can comment in confidence about the performance of another

employee or the boss. Aggregate data is then given to the employee in question

and used as input to the appraisal and eventual rating of that employee.

Notwithstanding the substantial research evidence warning of the dangers

associated with peer evaluations and their low validity, basic concern about this

process can be summed up with these questions. Do you really want to have a

company with a culture that promotes the use of secret reports to assess and

judge its employees? How can your organization pretend to be open, honest and

forthright when it uses secrecy and anonymity to measure the value of

employees? Is this the way you want your business to run? Supervisors are also

frustrated not knowing the actual source of employee concerns so that they can

attend to the problem effectively. When we set up a system which assumes it

must protect against deceit and retribution, it can become self fulfilling. And as

with suggestion boxes, the anonymous survey unfortunately symbolizes that not

only do employees take a risk if they raise problems or concerns directly with

the supervisor; but also that it's not the supervisor's job to solicit such

information.

Essentially, any employee feedback process which requires secrecy risks

damaging healthy working relationships, especially between employees and

their supervisors.

Four - You Don't Need 360 to Include Feedback

If you really want your employees to get performance feedback from the circle

of people they work with, including their customers, peers and subordinates, try


T.Y.B.M.S Page 57

the following simple process: n make "soliciting performance feedback from

significant others" a part of all employee jobs and therefore a performance

requirement;

N determines what sort of feedback is required, and if possible develop tools to

capture this information; n teach employees how to use the tools (or questions)

to get feedback from their subordinates, customers, peers, etc.; n teach

employees how to give performance feedback to their supervisors, peers or

suppliers, etc. n teach employees how to make use of the feedback they receive,

and, for example how to follow-up on their subordinates and customer

concerns; n require employees to regularly review (perhaps monthly) the results

of getting feedback from others, with their own supervisor, so that the process

becomes a priority and so that employees are held accountable for doing so.

One final caution. Paying for performance results is a good idea, but think

twice before rewarding goal achievement with salary increases: (1) It's

amazingly expensive. The salary differential is awarded not just once, but every

year afterward, as long as the person is employed. In addition, if salary level is

linked to retirement pay, the extra compensation will be expended for an

undetermined number of years during retirement. (2) The incentive doesn't

have immediate impact; the full amount of the reward is distributed through

dozens upon dozens of future paychecks. (3) The incentive is only temporarily

effective. The motivation of a promised salary disappears immediately after it

is awarded.

Once a salary is increased, it is perceived as a revision of the employment

contract: fair compensation for defined levels of employment - not as a reason

to continue exceptional levels of performance. Salary increases should be

based on an established track record of achievement, when a history of

accomplishment indicates that the value of the employee in the career market

place has increased.


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IMPROVING PERFORMANCE WITH FEEDBACK

REWARDS, AND POSITIVE REINFORCEMENT

Opening thought: We need to work smarter, not harder.

Feedback: objective information about individual or collective performance

how am I doing? How does this compare to others?

Serves 2 functions: 1) instructional 2) motivational

Three sources of feedback

• Others: are peers, supervisors, lower-level employees and outsiders.

• Task: the task itself is a source of feedback as to how well or not one does

something.

• Self: however, there is often a self-serving bias that is used more by those with

high esteem for themselves than low. Feedback must meet certain criteria to

attain desired outcomes:

1) Desire For Feedback

• depends on self-reliance

• self-assessment ability

• preference for external information

Note: -recipients must be open to feedback

-low self-esteem, self-efficacy recipients do not often seek feedback

-high need achievers and self-monitors desire feedback

2) Perception Of Feedback (positive or negative)

Feedback can be either positive or negative and people tend to process positive

feedback much better than negative.

• negative can have more positive outcomes because are motivated to improve

• negative must be presented carefully to avoid creating insecurity and

defensiveness

• can damage self-efficacy


T.Y.B.M.S Page 59

3) Cognitive Evaluation Of Feedback

• accuracy, credibility of source, fairness of system, performance-reward

expectancies, reasonableness of standards

• if do not meet these criteria will be rejected or downplayed

• personal experiences dictates how these factors are weighed

• often has a profound and lasting effect on behavior

4) Behavioral Outcomes

Direction, effort, and persistence, and perhaps resistance --Resistance is one

outcome of feedback and one that needs to be managed. If the employee sees

the efforts as manipulative, it will lead to resistance as well other negative

actions. Nontraditional Upward Feedback and 360-Degree Feedback Tradition

has been top down feedback especially in a hierarchical structure. Newer

organizational structures are trying new approaches (such as upward feedback

and 360-degree feedback, meaning that a person can be evaluated from the top,

the side, outside the organization, from those below in position, etc.


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360 ASSESSMENTS

360 feedback tools are also known as…

multi-rater feedback

multi-source assessment

multi-source feedback

full circle

group performance review

Whatever the name, the intention of the feedback should help identify the

weaknesses and strengths of the workforce. It should also contribute a plan of

action for the professional development of each individual.

Properly applied 360 feedbacks can help employees improve performance and

skills in the workplace. It can target precise information about areas employees

need to keep up to date. It also aids in identifying the specific knowledge,

essential functions and characteristics that are critical to the individual‘s job.

A good feedback program will generate trustworthy and clear suggestions of

how employees and managers can improve by providing a solid plan of action.


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360 APPRAISALS | HUMAN RESOURCE MANAGEMENT

360-Appraisals, also know as ―multi-rater feedback‖ or ―peer

appraisals,‖ can create a comprehensive view of an employee‘s performance.

HRsmart‘s 360-Appraisal Solution allows managers to extend beyond

employee peers by gathering feedback from clients, vendors or others with

whom they frequently interact.

HRsmart‘s 360-Appraisal Solution provides an easy method for gathering

critical data. This strategic tool can help managers:

Gauge employee performance. Managers typically only see a piece of the

picture, but what they don‘t see can be even more telling. When feedback is

gathered from peers or outside contacts, a person‘s true value can become more

apparent. Perhaps a customer service manager goes above and beyond every

time they receive a call, or vendors receive all of the information they need on

the first inquiry.

Identify leaders. 360-Appraisals can help managers more effectively pinpoint

group leaders. Peer reviews are a great way to determine who had leadership

ability within a group by helping you identify employees who motivate others,

set good examples and can be trusted by peers to do their part—traits that are

often overlooked or hard to identify in team or group settings.

Increase employee awareness. 360 appraisals provide insight into

competencies and skills held by employees and can help employees better

understand how the behaviors and attitudes they exhibit impacts those around


T.Y.B.M.S Page 62

them. Anonymous feedback also encourages more open feedback and honestly,

particularly when direct peers and managers are involved and Human Resource

Management.

Create and manage 360 assessments. This easy-to-use system allows

appraisal owners to easily generate assessments, then quickly edit, view and

print the results. Data can be captured in an employee‘s annual performance

assessment with the option to include it in the overall rating.

HRsmart‘s 360-Appraisal solution is a core component of the Employee

Performance Management solution; however, it can be purchased as a stand-

alone application. Contact a sales representative for more information.


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GUIDELINES FOR USING 360 FEEDBACK AND

PERFORMANCE APPRAISAL

Here is a set of guidelines for when to use 360 feedback and performance

appraisal that can help organization stay squarely on the road of increased

performance and success:

Use performance appraisal to:

- Set clear, specific goals

- Establish measurements to determine outcomes and results

- Evaluate the degree to which outcomes and results were achieved

- Determine, based on performance, what increase or bonus is due

Use 360 feedbacks to:

-. Identify, the skills, competencies, behaviors, and practices needed to

successfully achieve goals, outcomes, and results

- Measure proficiencies in skills, competencies, behaviors and practices

- Assess where improvement is needed to achieve desired results

- Create targeted development plans that increase capabilities and performance

The best guidelines are the ones most commonly suggested by experts:

1. Ensure that performance goals conform to EEO guidelines:

- Related to specific corporate goals

- Linked to the person's responsibilities

- Achievable

- Observable

- Measurable

2. Reward team development as well as business results

3. Empower people to achieve the goals you set

4. Reward the people who do the work:

- If it was a team effort, reward the team

- If it was an individual effort, reward the individual

5. Keep the goal-setting, tracking and reward system simple:

- Reward outstanding effort, not routine performance

- Track and reward outcomes, not process steps


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FACTORS LINKED TO SUCCESS

Organizations that experience success with the 360-degree feedback methods

have many environmental attributes present. Some of these are:

Organizational climate fosters individual growth

Criticisms are seen as opportunities for improvement

Proper framing of feedback method by management

Assurance that feedback will be kept confidential

Development of feedback tool based on organizational goals and values

Feedback tool includes area for comments

Brief workers, evaluators and supervisors about purpose, uses of data and

methods of survey prior to distribution of tool

Train workers in appropriate methods to give and receive feedback

Support feedback with back-up services or customized coaching

FACTORS LINKED TO FAILURE

Many organizations have rushed into 360-degree feedback without laying the

foundation for success. Typical errors include:

Feedback tied to merit pay or promotions

Comments traced to individuals causing resentment between workers

Feedback not linked to organizational goals or values

Use of the feedback tool as a stand alone without follow-up

Poor implementation of 360-degree tool negatively affects motivation

Excessive numbers of surveys are required of each worker with few tangible

results provided to individuals

"There is no data it actually improves productivity, increases retention,

decreases grievances or that it is superior to forced ranking and standard

Performance Appraisal systems. It sounds good but there is no proof it works

other than a lot of companies have tried it."


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Report On

FLIP SIDE OF 360 DEGREE FEED BACK- WHAT MAKES THE

PROCESS DIFFICULT

BY N.R. ARAVAMUDHAN

In a highly competitive market, organizations are facing an unprecedented pressure to raise the

bar of performance and continue to deliver to enable it leapfrog the competition. Today, a

beleaguered organization will have to slug it out in the market sweepstakes to live up to the

heightened expectations of its key stakeholders. Organizations are looking at ways and means

to operate more effectively and efficiently. American companies, after having bloodied their

hands in 70's and 80's when the US economy slid in to nadir, were always the first off the block

to come up with new approaches and methods to improve performance. One such innovative

assessment tool was 360-degree feedback. Debuted in US companies in 90's, 360-degree

appraisal has become current flavor of the season not only in US, but also in India. Widely

touted as a great development tool, 360-degree feedback is increasingly finding favour with HR

managers in Indian corporate landscape. Though 360-degree approach brings slew of

advantages in the wake of its implementation, it has its fair share of naysayers who pan it

mercilessly as a process that leaves a trial of blood both in the organization. 360 degree, if not

implemented properly can have a calamitous consequence for companies. Many experts argue

that the right culture should prevail in the organization before introducing 360-degree

approach; 360 degree involves collecting feed back about an individual from multiple sources.

The source, among others includes, an individual's superior, peers, internal and external

customers, client reports, suppliers. Self-assessment, conducted by the individual will also be

included in the exercise. To put it succinctly, the underlying objective is to find the gap

between one's own appraisal and the perception of other constituents in the 360 degree feed

back. There is no gain saying the fact that it's an excellent process. But the nub of the issue is

that it is not always successful. There is always a mad glamour among the companies to hitch

itself on to any new management fad that manages to generate quite a buzz. The fact that a

competitor is doing it is good enough reason for others to follow the suit. It all boils down to

one vital imperative- "How you do it is more important and critical than actually implementing

360 degree feed back". If 360 degree were to be implemented in a haphazard manner, the

company is setting itself up for a disastrous situation. If people are not happy about the process,

then morale will be hit hardest. Willy –Nilly, Companies may open a veritable can of worms,


T.Y.B.M.S Page 66

making the situation muddier and murkier. Some staff will become soft target. Companies will

have to assess its state of readiness vis-à-vis 360-degree system before taking a headlong

plunge. In the light of these facts, the question that begs an answer is what makes 360-degree

appraisal difficult? Some common deficiencies in the 360-degree approach that renders it less

reliable and attractive are using the feedback for performance appraisal.

360 degree feedback has a different use:

Performance appraisal is a evaluative process used to determine the out comes or the end result.

The result gets measured after determining a clear, specific goals and measuring the actual

performance against them. Efforts, attitude, behavior, teamwork are the few performance

metrics factored in performance evaluation. Experts feel that this cannot be a real barometer of

job performance. 360-degree feedback is a developmental tool. It is a modeled to help

employees develop by providing feedback on their expertise in the remit of skills,

Competencies and behaviors. As the employees grow and nurture their skill sets and

competencies, companies will be able to turbo-charge its performance levels. So the purpose of

360 degree and performance appraisal are different. If the organization tries to link both, then it

will be sitting on powder keg.

Architecture of 360-degree tool is polar opposite to performance evaluation

360 feedback is a good process to zero in on and measure the skills, competencies and practices

required to do a job. In fact 360 degree feedback works wonderfully well in measuring soft

skills such as emotional quotients listening skills, interpersonal skills, coaching, and

leadership.360 degree can also be adopted to identify the training needs. It can also be used to

assess the team cohesiveness and customer satisfaction. On the contrary, performance appraisal

is an evaluative process, good enough to set the standards of performance and measure the

progress made against it. So performance appraisal and development tools are different from

each other. Any attempt to dovetail 360-degree feedback into performance appraisal will have

negative implications for the company as a whole. An eminently avoidable situation.

Linking 360 degree feedback to promotion and salary decision is risk- fraught

Performance appraisal is used to decide upon salary hike and promotions. 360 degree is a

development tool. If 360 degree feed back is tied to pay hikes and promotion decisions, the

process will have the stamp of failure written all over it. If the 360-degree is linked to financial

rewards, employees can see through the larger game plan and may begin to subvert or

circumvent the system to their advantages. Some employees may get excellent ratings. Few

employees may find themselves swamped by poor ratings. Trust and honesty gets short shrift.

Proficiencies and competencies of the employees will spiral downwards.


T.Y.B.M.S Page 67

Lack of training could spell a trouble

Giving effective feedback is a tough proposition unless the company trains all the constituents

involved in 360 degree feed back to receive and provide feedback. The process could plunge

into uncertainty; intractable conflicts among the members could crop up. To provide a

constructive feedback, people need training. Benefits will out strip the cost of training as the

feedback delivered to participants becomes more targeted. Feedback will help employees

identify a behavior that add or destroys value.

Cynicism abounds

Like a match fixing in the cricket, there can be a "fixing" in companies also, albeit of a

different kind. Raters can collude with each others to muster enough numbers to get good

ratings. Employees may treat the whole exercise with disdain, as they know that the system is

tainted and doctored.

Politicking may rear its ugly head.

If an individual don't get a good appraisal, the whole blame game is played out. An aggrieved

individual may accuse the co-worker of deliberately giving a low rating and may demand his /

her scalp. Mud slinging and muckraking will become every ones favorite Pastime in the

company.

Time and cost are the constraints

Time and cost associated with 360-degree feedback is a real dampener. In a bid to capture all

the facets of employee's performance, the 360degree system may become unmanageable,

gobbling up more time and high cost.

360 degree feedback can be counter-productive if there is no right culture in the organization.

The superiors blanch the possibility of sub-ordinates evaluating their performance. The fact that

the sub-ordinates take a call on his/her performance is a frightening proposition for the bosses.

Employees may not come forward to provide feedback about bosses for the fear of reprisal. If

the boss were to have less than five sub-ordinates in the rating pool, it's easier for him to track

down the source of negative feedback, and launch a massive witch-hunt against the target.

Even though the sub-ordinate evaluates the bosses in anonymity they may still give favorable

ratings to the superior, in order to avoid ruffling the feathers. This only obscures the picture

further. Sub-ordinate feed back can help the bosses gain insight into their own strengths and

weaknesses. The manager can never become responsive to the aspirations of his/her sub-

ordinate.


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CASE STUDY:

WYETH CONSUMER HEALTHCARE - AN ALL-ROUND

APPRAISAL SUCCESS

Wyeth is one of the world‘s leading pharmaceutical and healthcare

products companies. They are research- driven, with a major focus on

developing innovative new medicines that really make a difference to people‘s

lives and address significant areas of unmet medical need.

Appraisals are getting harder! People work flexibly in projects across

the organization - everyone is busy - appraisers see less of their people. So,

when appraisal comes around, managers are inevitably less well-informed than

10 years ago. A particular problem for appraisers seems to be how results were

achieved; the person's relationships, approach and values. What was achieved

can be relatively easy to judge - results are usually much more visible.

Adding 360-degree feedback to its performance management

process gives Wyeth Consumer Healthcare insight into how staff achieve as

well as what they achieve.

The challenge

Wyeth Consumer Healthcare (WCH) wanted to improve its performance

management process but found judging some aspects of it presented a real

challenge. "Besides specific achievements, the review also records ratings of

support for the company's values of quality, integrity, respect for people,

leadership and collaboration," says Don Sibley, the household medicine

manufacturer's improvement manager, who has since moved on. "But, unlike

performance objectives, these are not tangible but embedded in relationships

and attitudes."

The programme

The company decided 360-degree feedback would strengthen the review

process by providing insights into how employees achieved, rather than just


T.Y.B.M.S Page 69

what they achieved. Over a six-month period, WCH worked with provider

Simply360 to develop a process for all 62 staff

Some managers were skeptical, so to create champions for the process, a pilot

scheme focusing on five senior and middle managers and opinion leaders was

developed. "It was important that executives showed commitment to it by using

360-degree feedback as part of their own performance management review,"

says Sibley. "If executives were excluded, the process would have lost

credibility."

In the summer of 2007, the programme was extended throughout the company.

"We addressed the issues of honesty and anonymity at short workshops,"

explains Sibley. "Some were concerned people would not give the critical

feedback that might lower appraisal ratings, or that individuals might seek out

those who gave them critical feedback. At the workshops, people were able to

express those concerns, and get them resolved by reaching an understanding."

Questionnaires had to be pertinent for each level of staff and clarity was

essential. Employees negotiate with their manager who their reviewers will be

and are advised to select as broad a range as possible from people they work

with on a regular basis. They are also advised to consider choosing someone

with whom their relationship could be improved. The reviewers complete a

short online questionnaire and the results form part of the report discussed at the

review, along with their own views and those of their manager.

The results

Anecdotal evidence suggests the majority of managers and employees feel the

360-degree feedback has enhanced the review process and made it easier to

identify personal development needs. According to Sibley, the feedback has

changed the nature of performance reviews. "Reviews are no longer based on

one or two individuals' perceptions," he says. "They have become much more

open, honest discussions and, inevitably, some 360-degree reports have

challenged managers' views about their team. The relationship between

appraiser and appraised has become more equal."

THE HR VIEW

Don Sibley was improvement manager at the time the process was developed.

He believes the 360-degree feedback really helped to open up a dialogue

between manager and employee, by focusing on strengths that an employee


T.Y.B.M.S Page 70

may have shown that may not have been quantifiable and therefore could have

been missed by their manager. "However, the programme has to be supported

carefully and has to focus on people processes, not IT," he stresses. "About 90%

of the project is about people discussing how they will use the information,

asking for feedback, sharing reports and planning their personal development

with others. At WCH that means training at all levels so people can feel

confident their concerns are addressed. This ensures the process is transparent

and readily understood. Sophisticated tools would be difficult to understand.

Similarly, the administration process to manage the project needed thinking

through and planning. We had to allow time to make things very, very simple,"

he says."

THE EMPLOYEE VIEW

James Watson is group brand manager, marketing. "I was aware of the concept

of 360-degree feedback but had not experienced it before," he says and admits

he found the prospect a bit nerve-racking initially. "Besides your own review

and that of your manager, you agree on three or four other people within the

company, " he explains. "You're advised to go for a broad range. It is tempting

to go for people you know you get on with who can be guaranteed to say

positive things, but it is often more productive to pick people whose reactions

you're not so sure of or who you feel are not so impressed. Last year, I benefited

from feedback from the sales division that highlighted that I needed to get out

into the field more often, as well as suggesting ways I could make their life

easier. Coming at it from the other angle as a manager myself, and reading

other people's views on my team, has given me a much wider understanding of

how staff are delivering for others and where issues of confidence lie."

What's WCH's secret? Don Sibley, their Training and Development

Manager, highlights three things…

Good 360 Feedback designs. In particular, clear questions that provides

pertinent, unambiguous feedback. And, a simple, visual feedback report

that everyone finds helpful. Don is confident that poor design creates

both ambiguities that fuel arguments and complexity that obstructs

productive discussions.

Intelligent implementation. WCH worked hard at developing their 360

Feedback process, and then introduced it carefully. Senior managers

helped shape the questionnaire, and then piloted 360 Feedback by getting

feedback themselves. Taking things step-by-step enabled several


T.Y.B.M.S Page 71

improvements - WCH discovered what worked for them. But, perhaps

more importantly, it created understanding and ownership of 360

Feedback across the business before was used in appraisal.

Clear personal objectives. If personal objectives are clear, then appraisal

is straightforward, the appraise did or didn't deliver. Clear objectives

remove doubt and debate from appraisal rating decisions, and crucially

they remove 360 Feedback results from those key decisions. Don says

clear objectives make the role of 360 Feedback straightforward - it's

about understanding performance not determining appraisal ratings. It's

not about determining appraisal ratings or pay.

360 Feedback in appraisal has been a huge success for them. An anonymous

survey of appraisers and appraises found…

Most people said 360 Feedback made it easier to discuss performance

both in terms of the company's values and the job.

68% of people described their 360 Feedback as "a fair assessment of my

performance".

Almost everyone (87%) said they gave honest feedback to others.

80% of appraises and appraisers felt 360 Feedback had enhanced their

annual appraisal.


T.Y.B.M.S Page 72

CASE STUDY- MARUTI UDYOG

It would seem that there is no corporate human resources policy that has not

had its share of controversies for being biased. With an increasing number of

qualitative factors that affect employees at the workplace, democratizing the

performance appraisal process to make it as fair as possible has been the dream

of every HR manager.

And now qualitative factors are not just at play in the services sector, but also in

manufacturing. With cubicles giving way to open offices, the top-down

approach to employee performance appraisal is also on its way out.

One company that has set itself on course to further democratizing and opening

up its employee evaluation process is car market leader Maruti Udyog.

The company has introduced a unique 360-degree feedback system, starting

with its senior leadership. The new system has been co-developed with Ernst &

Young and has been put in place recently.

Under the 360-degree feedback system, the employee is rated not just by his

superiors, but also by his peers and subordinates.

"We are starting the 360-degree feedback process with employees in the top

management such as chief general managers and general managers, whose

performance will now be assessed based on feedback from their peers and

junior management employees within the same department. Till last year, their

performance was being appraised only by the Directors and the Managing

Director," says Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.

Ernst & Young, in consultation with Maruti, has listed a set of leadership

competencies that are expected in a general manager. Based on that, it has

prepared a questionnaire to which peers and subordinates can respond online.


T.Y.B.M.S Page 73

Although acknowledged as an effective tool for leadership development in the

West, Indian companies have been shy of introducing such a feedback system

for fear of disturbing traditional hierarchical structures.

HR consultants feel that the critical issues in implementing such a system

include assuring respondents that their feedback will remain confidential and

convincing the person receiving the feedback that this is a development tool and

not an appraisal tool. Maruti has handled this by getting E&Y and other

consultants to make detailed presentations to the senior management personnel

before the process got under way. The company has a committee of general

managers, called Human Resource Inter Divisional Committee (HRIDC), which

is consulted on all major HR issues.

The initiative has been unveiled with an e-mail by Maruti's Managing Director,

Mr Jagdish Khattar, asking people to support the online questionnaire process.

The 360-degree feedback system will also include a self-appraisal by the

general manager. At the end of the process, he can compare his self-appraisal

with the assessment of his subordinates and peers.

One of the benefits that Maruti is hoping to get out of the 360-degree feedback

process is the sense of empowerment and importance felt by subordinates, when

they are asked to offer their feedback about their superiors. Maruti currently has

over 4,000 employees on its rolls.


T.Y.B.M.S Page 74

APPRAISAL QUESTIONNAIRE OF 360 DEGREE SYSTEM

Appraisal questionnaire of 360 degree system

I/ Company info:

1. Name of the Company……………….

2. Address:

3. Tel:

4. Website:

5. Person Interviewed….

6. Position……………

II/ Appraisal info:

1) What benefits are you looking to gain from using 360 feedback?

2) How is it better than?

• MBO

• Assessment Centre‘s

• Balanced Scorecard

• Traditional Methods of performance appraisal?

3) What are the advantages and disadvantages of 360 degree process towards

the individual, team and organization?

4) Which type of 360 degree systems do you use?

• Paper-based either electronic paper or the real thing

• Third party e-mail based system

• Personal/telephone based

• Off the shelf‘ can be purchased and run it in-house.

5) Can you explain the 360 degree process carried out in your company?

6) What is the role of the HR manager in this whole process?

7) Any training required in conducting this process?

If Yes, what kind of training and for who?

http://www.humanresources.hrvinet.com/appraisal-questionnaire-of-360-degree-system/


T.Y.B.M.S Page 75

9) What briefing do you have in place for the participants and observers?

10) How capable are your managers of debriefing the 360 profiles with their

people?

11) How many observers for one individual?

12) Who administers this process?

13) How are the questionnaires distributed?

14) On what basis are the questionnaires made (competency or result)?

What competencies do you measure?

15) How many different questionnaires will be required for different levels of

management or is it uniform for all employees?

16) Is there any scoring system and which tool do you use to scale the scores?

17) What are the difficulties faced during the process and how do you overcome

them?

18) Who appoints or chooses the raters, observers, etc.?

19) How much access do people have to internet and e-mail?

20) How well is the company IT system able to support this initiative of

conducting a 360 degree through the internet?

21) What kind of information is targeted through the 360 degree appraisal?

22) What security is needed for individuals and for corporate compliance?

23) Who sees the individual 360 profiles?

24) What benefits have your managers gained from using a 360 feedback

process?

25) How much are you using any organizational data from the 360 processes?

26) Who provides the internal administration of the system?


T.Y.B.M.S Page 76

27) What mix of narrative and numerical data is required in the profiles?

28) What does the 360 degree report contain?

29) How do you manage the feedback process after the profiles have been

completed?

30) How much follow-up is carried out after the 360 profiles are received?

31) What is the agreed level of confidentiality for the 360 profiles?


T.Y.B.M.S Page 77

CONCLUSION

The popularity of 360-degree feedback is undeniable. Yet, the perceived

benefits will help the personal development of workers only in the right

organizational climate. When this method is utilized in the wrong environment,

the results can be detrimental. With close consideration and evaluation of the

environment, the decision to employ this tool, or another, should be made

carefully.

360 feedbacks can be safely linked to appraisal in a performance

management system by doing the following:

1. Use individual 360 feedbacks to measure the hard-to-quantify

aspects of competence.

2. Link measurements of competence to appropriate development

activities. Hold people accountable for their development.

3. Use satisfaction surveys to measure the hard-to-quantify results.

4. Link the measurement of results to appropriate rewards. Hold

people accountable for results.

5. Separate both processes; coordinate them in time so that they

support each other.

Many of the more conventional performance appraisal methods have often

proved unpopular with those being appraised and evaluators alike, 360 is

gaining popularity with many managers and employees.

It offers a new way of addressing the performance issue.

When used with consideration and discipline, feedback recipients will feel

that they're being treated fairly.

In addition, supervisors will feel the relief of no longer carrying the full

burden of assessing subordinate performance.

The combined effect of these outcomes should result in increased

motivation, which in turn improves performance.


T.Y.B.M.S Page 78

In light of this approach, the typical rationalizations that encourage linking

individual 360 feedbacks to pay and personnel decisions are remarkably

unconvincing.

"If 360 feedbacks aren‘t linked to pay, what would motivate anyone to take it

seriously?" Most people want to remain competitive in the workplace, and they

know that feedback gives them an edge. Feedback is important to people who

want to: (1) See themselves as professionals, (2) Upgrade their skills, (3) Find

out what their coworkers already know about their weaknesses, (4) Resolve

problems they may be causing, and (5) Contribute to the team mission and its

success.

"A multi-source appraisal is more effective than a single-source appraisal."

That's true. But single-source (boss) feedback is only one of the problems that

plague performance appraisal. Using multi-source feedback as a platform for

appraisal is like putting a new horn and side mirrors on a junk car. It's safer to

drive, but the car still needs major repairs.

From a cost viewpoint this may sound like a reasonable idea, but as I have

emphasized repeatedly, there are huge risks. The solution is to take the prudent

path.

"We can start with the development-only approach, get them used to 360, then

'ease it in' to using it for performance appraisal." No matter how gradually you

familiarize people with the process, if you connect a 360 appraisal to

compensation and personnel decisions, employees will know that their

evaluations can affect a person's career and will find it insurmountably difficult

to give honest feedback and accurate ratings. When this happens, 360

feedbacks will no longer be useful for development. And since supervisors

have been challenged to give fair appraisals for decades and have not met the

challenge satisfactorily, how can anyone expect coworkers to be more

objective?


T.Y.B.M.S Page 79

Trust is at the core of using 360 to enhance productivity. Trust determines how

much an individual is willing to contribute for an employer. Using 360

confidentially for developmental purposes builds trust; using it to trigger pay

and other personnel decisions puts trust at risk. Why would an organization

consciously choose to jeopardize trust for the sake of convenience or

efficiency?

In the end, leaders are responsible for "managing" performance both

competence and results. Performance appraisal and 360 feedbacks are tools

that help leaders fulfill this responsibility powerful tool, when used with care

and good judgment.


T.Y.B.M.S Page 80

Bibliography:

www.google.com

www.citehr.com

www.indiamba.com

www.simply360.co.uk/casestudies/performance-m....

www.managementparadise.com

www.findarticles.com

HR Magazine

http://www.google.com/

http://www.citehr.com/

http://www.indiamba.com/

http://www.simply360.co.uk/casestudies/performance-m

http://www.findarticles.com/

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