Measurement of employee performance has become a critical element of many company talent management strategies. Understanding how to accurately assess employee performance can enhance compensation, succession planning, training, and goal setting. One method getting a lot of attention is 360 degree feedback, also known as multi-rater feedback. Some estimates state that as many as 90% of Fortune 500 companies use some variation of multi-rater feedback. Before implementing a 360 degree feedback plan, there are a few things you should keep in mind.
The Downside of Traditional Appraisals
Because a multitude of factors determine success, many companies are finding issue with their current top-down, supervisor-to-subordinate performance appraisal process. Top-level supervisors are often removed from the day to day and can only rely on sales or goal attainment data, or their few encounters with lower-level employees. Although goal and sales achievement are important other factors such as how well they work with their peers, how responsive they are with clients, and their work habits can be a strong indication of performance. Compounding the issue of traditional appraisals even further is that performance is often tied to compensation; when the performance system is flawed, compensation will also prove erroneous. 360 degree feedback allows HR to survey peers, direct managers, and even vendors or clients on a particular employee’s performance giving HR an extensive view of who is performing and who is not.
360 Degree Feedback, Not Only For Performance Assessments
360 degree feedback is a great alternative to traditional performance reviews but can also be useful in employee development. Hidden talents can be discovered and leaders can be developed. These reviews can give supervisors a clearer picture of what path an employee is currently on and if it is correct or needs to be reevaluated. 360 degree feedback can also assist in improving training programs by giving HR insight into the successes and gaps of the current method.
How to Avoid Failure
There is no guarantee that implementing a 360 degree performance appraisal program will be successful in your organization but there are a few things you can do to help limit an unsuccessful implementation. First, do not allow comments from peers, vendors, client or others to be traced; this can often lead to resentment between the evaluator and the individual being evaluated. Make sure that all feedback is linked to organizational goals and values and the motivations behind 360 degree reviews are clearly communicated. Most importantly, follow-up with employees to communicate the results of the reviews so employees can understand their strengths, their opportunities to improve, and have the chance to ask questions in a supportive environment.
Tips to Success
Many companies have found success by using 360 degree feedback. Below are a few tips to increase your success.*
* Maylett, T. (2009). 360-Degree Feedback Revisited: The Transition from Development to Appraisal. In DecisionWise. Retrieved April 25, 2012, from http://www.decision-wise.com/360-degree-feedback-article-performance-review-page6.htm