360 degree feedback is also known as multi-rater feedback, multisource assessment, or multisource feedback. In this, a group of eight to twelve people fill out a confidential questionnaire or form that consists of questions covering a broad range of workplace and behavioral competencies. The questions are measured on a rating scale, and the exercise may also request the raters to provide written comments. The recipient employee will also fill a self-rating survey that comprises the same questions that others fill in. In rare cases, even external sources like customers, suppliers, or stakeholders are involved in the exercise.
There are mainly three ways of conducting this activity:
- Taking the help of an outside consultant and understanding any personal frictions within the organization.
- Introducing an in-house comprehensive program (by the HR team) to get feedback about key people.
- Forming a comprehensive program to bring out not just individual flaws but systemic and organizational faults too.
The results from the survey are used by the organizations in planning administrative decisions like salary increment or promotion, and sometimes for employees' training and development. Hence, when it is used for evaluation purposes, it is also known as a 360 degree review. Managers and seniors of an organization often use this tool to have a better understanding of their employees' competencies and create a development plan accordingly. Individual reactions are always combined with reactions from other people in the same category, in order to maintain anonymity and provide the employee a clear idea about their strengths and weaknesses. However, it does not measure the employee performance objectives and is not focused on the basic, technical, or job-specific skills.
Use as a Performance Appraisal Tool
The use of this kind of feedback for performance appraisal is quite common. But is not always a good idea, as taking responses from coworkers to measure an employee's performance may not create an atmosphere of trust. Since it focuses more on the employees' behavior than on the basic skills and performance objectives, it may not provide a clear and true picture about the employee. However, it can be beneficial to incorporate this method into a larger performance-based management system, provided there is clear communication on how it will be used. Also, it is recommended to employ the process every 12 months so that the employees get sufficient time and opportunities to implement their development plans, before the next appraisal becomes due.
The 360 degree feedback system acquaints the employees of their actions that might be creating problems for others, and what behavioral changes are necessary to enhance working relationships, team synergy, and customer service. The use of this method exclusively for appraisal purposes is an arguable subject. Whether it improves the employee performance is still questionable, and hence, it shouldn't be used to evaluate objective parameters like attendance, sales quotes, etc.