Most companies need regular personnel evaluations. Of course, you can measure the results of work by analyzing dry figures. But what if an employee formally performs all tasks and still has communication issues with colleagues or clients? Perhaps he or she lacks important soft skills.
What is the best way to explore these competencies? Soft skills are most fully revealed by 360-degree feedback, which is quite popular nowadays.Discover the benefits of 360-degree feedback in the workplace. Learn about its purpose, pros, and cons for effective personnel evaluations.
Assessment of employees is one of the main factors in HR strategy. Over 85% of Fortune 500 companies are now using the method to develop leadership and improve all business processes.
According to Forbes, the 360-degree feedback process has a considerable positive impact on organizations of all sizes.
Today we’re going to tell you why this method is so popular and in demand among businesses of all sizes. Let’s identify the purpose, pros, and cons of peer appraisal.
What Is 360-Degree Feedback?
360-degree feedback is an effective review method of an employee’s competencies by different stakeholders (e.g. managers, subordinates, colleagues, customers, and the attendee personally).
The 360-degree method was first proposed by Peter Ward in 1987. By it, the scientist meant a systematic collection of information about the performance of an individual (or a group), received from a number of interested persons.
The value of such a review lies in that the employee is assessed from all sides by his/her colleagues, managers, subordinates (if any), and clients. Moreover, an employee’s opinion about himself/herself is also taken into consideration.
The Purpose of 360-Degree Feedback
360-degree feedback is ideal for:
- Assessing the effectiveness of available curriculum and training programs;
- Providing comprehensive feedback to employees and managers;
- Motivating staff for growth and self-improvement;
- Planning staff training;
- Identifying interaction problems in the team;
- Organizing and developing productive teams;
- Evaluating the performance of managers, etc.
After conducting the survey, experts can monitor conflicts in the team, and study relations between departments/divisions.
Additionally, a properly prepared questionnaire will allow you to assess the attitude of the individual toward the corporate values, mission, terms, and policies. In parallel, an analysis of the self-assessment of the individual is carried out.
The review is conducted to achieve the following 4 main objectives:
- The manager has decided to recruit a project team or allocate individuals who are ready to solve complex problems;
- The time has come to assess the effectiveness of a subordinate in a particular position, the effectiveness of performance, and the extent to which the subordinate has achieved set goals;
- The company needs to form a personnel reserve. In this case, not only questionnaires are used. Professional hard skill tests and audits are conducted, as well as personal qualities and working skills are studied;
- The management plans to conduct personnel training. The methodology will help determine the need to improve the qualifications of the staff and make individual plans for all employees of the company.
Additionally, the 360-degree review is used both independently and as an additional method to other appraisal procedures.
That said, the review is used to:
- Determine the employee’s training needs, the competencies that need to be developed, and the creation of individual development plans;
- Ongoing assessment of activities according to the given work performance benchmarks at a given workplace for a certain period of time;
- Selecting a project team or identifying employees capable of working on complex projects;
- Form a talent pool, preferably together with professional tests, case studies, and assessment centers.
Note that the 360-degree methodology evaluates qualities exhibited in the past, and to assess the talent pool, you need to predict how the person will behave in a new position.
According to the results of the 360-degree review, you will be able to get information about:
- The nature of the interaction between departments and occurring conflict situations;
- How the employee fits in the corporate culture of the organization and his/her existing team;
- The adequacy of self-assessment of the employee.
The method is not used directly to develop a system of remuneration and bonuses (as the methodology can only identify personal qualities and is not suitable for determining the qualifications of employees and the value they bring to the company).
The main conditions for the 360-degree assessment process are as follows:
- A close-knit team, trusting relationships between employees;
- Absence of prevailing authoritarian management style;
- Absence of pronounced turnover of personnel (employees have been working together for at least one year);
- Ensuring anonymity (confidence of employees that their assessments will not be disclosed);
- Explanatory work with employees in advance about the purpose of the assessment process (the purpose should be formulated before the assessment and communicated to employees, awareness will reduce the stress of the assessment and allow for more objective data);
- Obligatory feedback on the results of the assessment (it must take place no later than one month after the assessment, in this period, it remains relevant and meaningful for the employee);
- Obligatory realization of the assessment decisions (the process for its own sake has no sense, the clear control of the decisions will allow making the review a powerful tool for staff development).
The Advantages and Disadvantages of 360-Degree Feedback
Like any method, 360-degree assessments have their advantages and disadvantages. Proper use of the method will allow for getting more reliable results and, based on them, making the right management decisions.
Let’s consider them in more detail below.
The Advantages Of The 360-Degree Method
Obtaining a versatile assessment for one employee
The employee receives an assessment from people he/she directly encounters in carrying out the work, unlike other methods the circle of evaluators is much wider here). This provides an opportunity to compare the personal view of the employee with the opinion of others and allows understanding possible under- or overestimations).
Democracy of the method
The employee gets an appraisal from colleagues he/she cooperates with on a daily basis. Consequently, the employee is assessed not only by the manager but also by co-workers (or subordinates). Such an assessment will be more accurate.
Creation and strengthening of trusting relationships with customers
This is an opportunity to show once again that the organization is working to improve customer service, as, in their opinion, interest from the company increases loyalty and contributes to improving service.
Increased self-awareness of the employee
The method helps identify the strengths/weaknesses and allows getting detailed feedback.
Modeling assessment criteria according to the requirements of corporate standards
This is where competencies developed for a particular organization serve as criteria.
Professional development of employees
The method serves as an excellent source for determining the needs of specialists in training and soft-skill development.
Generally, the method has a positive effect on the performance of employees. The results provide an opportunity to quickly detect areas of concern in employee development, select appropriate development tools/programs, and avoid bias and discrimination among co-workers. Moreover, peer appraisal helps employees become more efficient in their positions, as well as increases team spirit and accountability.
In addition, this method can be conducted remotely and automated using available software solutions and relevant online services. Lastly, 360-degree assessments do not require serious financial expenses.
The Disadvantages Of The 360-Degree Method
Each assessment method has its own limitations and this should be taken into consideration when choosing one for your company.
Thus, the main 3 disadvantages of the 360-degree review are as follows:
- The analysis of evaluation results requires careful preparation, or, more often, the use of outside experts with specialized skills;
- 360-degree feedback is not used directly for major personnel decisions: transfers, layoffs, and pay raises;
- Evaluates only competencies and not the achievements of the employee. The method is not suitable for identifying the potential of employees and further personnel moves.
To eliminate these first 3 disadvantages, you can use 360-degree feedback as a supplement to other assessment methods.
A high degree of confidentiality is required
The method will not produce reliable results unless the survey is anonymous to all employees.
To solve this problem, you can involve external organizations that collect information and provide results. Alternatively, you can also consider an in-house data collection methodology that respects the principle of confidentiality.
Nowadays, automated personnel assessment software is increasingly being used. Such solutions make the process of collecting and processing information much easier.
Fear, Bias, and Prejudice
It’s difficult to get candid information from colleagues in the evaluation (especially the opinion of subordinates about the manager).Plus, high or low self-assessment results affect the overall assessment outcome.
Note that the method will not produce reliable results unless the survey is anonymous to all employees. In addition, even though the survey is anonymous, employees do not always give honest feedback, especially when evaluating the manager.
As a rule, subordinates rate their supervisors highly, even though the principle of confidentiality is clearly respected. This situation can be remedied by using the subordinates’ evaluation weighting. By lowering the evaluation weight of the assistants relative to the evaluation weights of the supervisor or colleagues, the final result can be seriously adjusted.
Increased stress exposure of the employee
Reducing the stressful impact on the employee can be done through proper PR of the event. It’s necessary to communicate to the employee the purpose of the assessment and explain how the results will be used.
Laboriousness in processing the results
This problem is currently being solved by automated assessment systems. As a rule, they have the most essential functions of collecting and processing the results, and the reports and the presentation of the results required for a specific organization are completed by the developers of the solution or by the IT department of the organization.
360-degree feedback may not have the desired effect in small companies, because of the small number of employees and less objectivity.
Not all employees can disregard interpersonal relations and, due to this, the feedback may be based not on constructive but on personal impressions of the person. Thus, it should be given by a competent person with an appropriate set of skills, otherwise, undesirable consequences can occur.
Bottom Line
As a rule, people find it difficult to assess themselves from the outside, which prevents them from being objective about themselves and having healthy self-esteem.
Through providing comprehensive feedback, the 360-degree review method will help both the company and the employee to identify strong qualities and areas for improvement.
One of the main steps in such a review is preparing a proper questionnaire and choosing the right questions/answers. A long questionnaire with 100 tasks is not a good idea – to make your survey engaging, it’s best to include up to 40-50 sentences. Otherwise, the employee will get experience fatigue from thinking through every question and will answer formally.
Do away with the words “never” and “always” – they are too categorical for such a survey. After all, you can’t answer with certainty that someone is never late for work or always willing to come to the rescue, can you?
Not all company members have complete information about each other. There may be tasks that will stump the respondent if he/she doesn’t know the answer. In this case, they should be able to choose the neutral “I don’t know” option. It’s important to correctly represent the results to the person being assessed.
