360-degree feedback

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

The Current Relevance of 360-Degree Appraisals

These days, more and more organizations are choosing to incorporate 360- Degree assessments into their overall talent management process, and if you’re looking for a more holistic approach, then a 360 tool might be something to keep in mind. Not only do 360 evaluations maximize results by collecting observations from multiple sources (including peers, supervisors, internal and external customers, and self-assessments), they help highlight employee strengths and weaknesses, making it easier to provide valuable feedback and modify employee behavior when needed.
If implemented correctly, 360 degree reviews can be extremely effective. And best of all, it doesn’t take a rocket scientist to pull the trigger. Executing a 360 degree review is simple, and sometimes even the simplest solutions can generate the biggest and best results.

The 360 Degree Evaluation Process (in steps)

1. Develop survey questions, create customized forms, and select your participants.
2. Administer the assessment and review the results.
3. Use the feedback that you’ve received to follow-up with relevant training and development plans.

The benefits of 360 reviews, in a nutshell:

1. Gives you managers a thorough and all-around look at their employees from multiple perspectives.
2. Helps the employee understand how others perceive them.
3. Highlights any gaps between self-assessments and peer ratings.
4. Identifies any issues or employee weaknesses, giving the opportunity for advice, coaching and development plans.
5. Helps improve communication between employees and managers.
6. Leads to more relevant training programs and increased career development.
7. Can be used for employee succession planning and as a result, can increase the potential of in-house promotions.
8. It’s an anonymous process, and for the most part, anonymity leads to more honest feedback.
9. Can be used to target a specific division of employees (i.e. the management team, the executive team, or a particular project team).
10. Can be incorporated into the annual performance review process, or throughout the year for specific projects or to evaluate individual employees.
The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review." However, there is a great deal of controversy as to whether 360-degree feedback should be used exclusively for development purposes, or should be used for appraisal purposes as well (Waldman et al., 1998). There is also controversy regarding whether 360-degree feedback improves employee performance, and it has even been suggested that it may decrease shareholder value (Pfau & Kay, 2002).

History

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

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

Multi-rater feedback use steadily increased in popularity, due largely to the use of the Internet in conducting web-based surveys (Atkins & Wood, 2002). Today, studies suggest that over one-third of U.S. companies use some type of multi-source feedback (Bracken, Timmereck, & Church, 2001a). Others claim that this estimate is closer to 90% of all Fortune 500 firms (Edwards & Ewen, 1996). In recent years, Internet-based services have become the norm, with a growing menu of useful features (e.g., multi languages, comparative reporting, and aggregate reporting) (Bracken, Summers, & Fleenor, 1998).

Accuracy

A study on the patterns of rater accuracy shows that length of time that a rater has known the person being rated has the most significant effect on the accuracy of a 360-degree review. The study shows that subjects in the group “known for one to three years” are the most accurate, followed by “known for less than one year,” followed by “known for three to five years” and the least accurate being “known for more than five years.” The study concludes that the most accurate ratings come from knowing the person long enough to get past first impressions, but not so long as to begin to generalize favorably (Eichinger, 2004).

It has been suggested that multi-rater assessments often generate conflicting opinions, and that there may be no way to determine whose feedback is accurate (Vinson, 1996). Studies have also indicated that self-ratings are generally significantly higher than the ratings of others (Lublin, 1994; Yammarino & Atwater, 1993; Nowack, 1992).

Results

Several studies (Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999) indicate that the use of 360-degree feedback helps people improve performance. In a 5-year Walker and Smither (1999) study, no improvement in overall ratings was found between the 1st and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years. A study by Reilly et al. (1996) found that performance increased between the 1st and 2nd administrations, and sustained this improvement 2 years later. Additional studies show that 360 feedback may be predictive of future performance (Maylett & Riboldi, 2007).

Some authors maintain that 360 processes are much too complex to make blanket generalizations about their effectiveness (Bracken, Timmreck, Fleenor, & Summers, 2001b; Smither, London, & Reilly, 2005). Smither et al. (2005) suggest, "We therefore think that it is time for researchers and practitioners to ask, 'Under what conditions and for whom is multisource feedback likely to be beneficial?' (rather than asking 'Does multisource feedback work?') (p. 60)." Their meta-analysis of 24 longitudinal studies looks at individual and organizational moderators that point to many potential determinants of behavior change, including positive feedback orientation, positive reactions to feedback, goal setting, and taking action.

Bracken et al. (2001b) and Bracken and Timmreck (2001) focus on process features that are likely to also have major effects in creating behavior change and offer best practices in those areas. Some of these factors have been researched and been shown to have significant impact. Greguras and Robie (1998) document how the number of raters used in each rater category (direct report, peer, manager) affects the reliability of the feedback, with direct reports being the least reliable and therefore requiring more participation. Multiple pieces of research (Bracken & Paul, 1993; Kaiser & Kaplan, 2006; Caputo & Roch, 2009; English, Rose, & McClellan, 2009) have demonstrated that the response scale can have a major effect on the results, and some response scales are indeed better than others. Goldsmith and Underhill (2001) report the powerful influence of the participant behavior of following up with raters to discuss their results. Other potentially powerful moderators of behavior change include how raters are selected, manager approval, instrument quality (reliability and validity), rater training and orientation, participant training, manager (supervisor) training, coaching, integration with HR systems, and accountability (Bracken et al., 2001b).

Others indicate that the use of multi-rater assessment may not improve company performance. A 2001 Watson Wyatt study found that 360-degree feedback was associated with a 10.6 percent decrease in market value. Others claim that "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." (Pfau & Kay, 2002) Similarly, Seifert, Yukl, and McDonald (2003) state that there is little evidence that the multi-rater process results in change.

Additional studies (Maylett, 2005) found no correlation between an employee's multi-rater assessment scores and his or her top-down performance appraisal scores (provided by the person's supervisor), and advised that although multi-rater feedback can be effectively used for appraisal, care should be taken in its implementation (Maylett, 2009). This research suggests that 360-degree feedback and performance appraisals get at different outcomes, and that both 360-degree feedback and traditional performance appraisals should be used in evaluating overall performance.

References

• Atkins, P., & Wood, R. (2002). Self-versus others' ratings as predictors of assessment center ratings: Validation evidence for 360-degree feedback programs. Personnel Psychology, 55(4), 871–904.
• Bracken, D.W., and Paul, K.B. (1993). The effects of scale type and demographics on upward feedback. Paper presented at the Society for Industrial and Organizational Society Annual Conference, May, San Francisco, CA.
• Bracken, D.W., Dalton, M.A., Jako, R.A., McCauley, C.D., & Pollman, V.A. (1997). Should 360-degree feedback be used only for developmental purposes? Greensboro, NC: Center for Creative Leadership.
• Bracken, D.W., Summers, L., & Fleenor, J.W. (1998) High tech 360. Training & Development, August.
• Bracken, D.W., Timmereck, C.W., & Church, A.H. (2001a). The handbook of multisource feedback. San Francisco: Jossey-Bass.
• Bracken, D.W., Timmreck, C.W., Fleenor, J.W., & Summers, L. (2001b). 360 degree feedback from another angle.Human Resource Management, 40 (1), 3–20.
• Bracken, D.W., and Timmreck, C.W. (2001) Guidelines for multisource feedback when used for decision making. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The Handbook of Multisource Feedback. San Francisco: Jossey-Bass.
• Caputo, P. and Roch, S. (2009) Rating formats and perceptions of performance appraisal fairness. Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, April, New Orleans, LA.
• Edwards, Mark R., & Ewen, Ann J. (1996). 360° Feedback: The powerful new model for Employee Assessment & performance improvement. New York: AMACOM American Management Association.
• Eichinger, Robert. (2004). Patterns of Rater Accuracy in 360-degree Feedback. Perspectives, 27, 23–25.
• English, A.E, Rose, D.S. & McClellan (2009). Rating scale label effects on leniency bias in 360-degree feedback.Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, April, New Orleans, LA.
• Fleenor, J. W., & Prince, J. M. (1997). Using 360-degree feedback in organizations: An annotated bibliography. Greensboro, NC: Center for Creative Leadership.
• Goldsmith, M., & Underhill, B.O. (2001). Multisource feeedback for executive development. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The Handbook of Multisource Feedback. San Francisco: Jossey-Bass.
• Greguras, G.J., & Robie, C. (1998). A new look at within-source interrater reliability of 360-degree feedback ratings. Journal of Applied Psychology, 83, 960–968.
• Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree feedback on management skills development. Human Resource Management, 32(2–3), 325–351.
• Kaiser, R.B., and Kaplan, R.E. (2006). Are all scales created equal? Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, May, Dallas, TX.
• Maylett, T. M., & Riboldi, J. (2007). Using 360° Feedback to Predict Performance. Training + Development, September, 48–52.
• Maylett, Tracy (2005). The Relationship Of Multi-rater Feedback To Traditional Performance Appraisal. Doctoral Dissertation, Pepperdine University, Los Angeles, California.
• Maylett, Tracy (2009). 360-Degree Feedback Revisited: The transition from development to appraisal. Compensation and Benefits Review, September/October 41(5), 52–59.
• Pfau, B. & Kay, I. (2002). Does 360-degree feedback negatively affect company performance? Studies show that 360-degree feedback may do more harm than good. What's the problem? HRMagazine, Jun 2002. 47, 6; 54–60.
• Reilly, R., Smither, J.W., & Vasilopoulos, N. (1996). A longitudinal study of upward feedback. Personnel Psychology, 49(3), 599–612.
• Seifert, C., Yukl, G., & McDonald, R. (2003). Effects of multisource feedback and a feedback facilitator on the influence of behavior of managers toward subordinates. Journal of Applied Psychology, 88(3), 561–569.
• Smither, J.W., London, M., and Reilly, R.R. (2005). Does performance improve following multisource feedback? A theoretical model, meta-analysis and review of empirical findings. Personnel Psychology, 58, 33–66.
• Vinson, M. (1996, April). The pros and cons of 360-degree feedback: Making it work. Training and Development, April, 11–12.
• Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone amok? The Academy of Management Executive, 12(2), 86–94.
• Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What managers do with their results matters. Personnel Psychology, 52(2), 393–423.
• Yammarino, F. J., & Atwater, L. E. (1993). Self-perception accuracy: Implications for human resource management. Human Resource Management, 32(2&3), 231–235.