This Performance Management Style Gives Direct Reports a Voice — But Is That a Good Thing?

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Laura Berlinsky-Schine
Laura Berlinsky-Schine2.3k

Approximately 90% of Fortune 500 companies use 360-degree feedback. Why? This method of assessing employee performance, particularly at the leadership level, can help companies and individuals improve their work, output and relationships.

So, what is 360-degree feedback? And why is it an effective tool for evaluating employee performance? Let’s take a look at what it means, as well as the pros and cons.

What is 360-degree feedback?

360-degree feedback is a comprehensive process of delivering and receiving assessments. Unlike many other professional evaluation systems, multiple sources deliver feedback to the employee — usually a leader or manager, although sometimes individual contributors, too — not just the individual’s direct supervisor or supervisors. 

While the manager is part of the process, the individual usually also receives feedback from their colleagues, peers and direct reports. Sometimes, customers or clients also contribute their perspectives. The people who are selected to provide the feedback should interact with the subject regularly, such that they have a comprehensive view and picture of how the employee contributes to the work environment, embraces the company’s values and furthers their goals. 

The system is called 360-degree feedback because it examines multiple angles of the employee’s work and performance, such as their skills, contributions to the organization and its mission, interactions with colleagues and customers, attitude, 

360-degree feedback is meant to be confidential, so reviewers can feel free to speak candidly. But it should also be constructive. Additionally, the subjects of the reviews also often perform their own self-assessments so they can reflect on their performance.

The survey itself typically includes several assessment categories and asks the evaluator to rate the subject’s performance in each area on a scale of, say, 1-5. It should also include spaces for the evaluator to provide additional comments.

How does 360-degree feedback work?

1. Create a standard form to solicit feedback.

To ensure that the process is as standardized as possible for the individuals in your organization, create a survey that includes the same statements, rating systems and measures of evaluation for everyone. In addition to questions with a 1-5 rating system, include spaces for additional, qualitative commentary since this can be very valuable in helping the subjects better understand their results.

2. Choose individuals to provide feedback.

As we’ve discussed, the individuals you select to provide feedback should have regular interactions with the recipient. In other words, they should work closely enough with the employee that they are able to offer accurate assessments as to how the individual works in many different areas and capacities. The number of evaluators you select with vary by organization, but generally speaking, around 7-12 is ideal. Use your judgement here.

3. Ask the subjects to fill out their own evaluations.

Give the same survey to the subject of 360-degree feedback. That way, they can self-evaluate their own performance. This can be helpful since they may be able to gain perspective that they may not have been able to see otherwise.

4. Train everyone in the position of delivering feedback.

Before anyone completes the survey, ensure each participant receives ample training and preparation. For some, such as the employee’s direct reports, this could be the first time they’re in the position to deliver feedback, so they should receive clear, easy-to-follow instructions on how they should approach the process and their role in it. Stress the importance of being as objective and fair as possible when considering each of the criteria, as well as the comments that accompany the ratings.

5. Summarize your findings for the employee.

Once you’ve gathered feedback from each participant, summarize the findings in a report to be delivered to the subject. The employee should be able to see raw figures and averages, but remember to be careful about protecting the identities of those who participated. The person who gives the report to the employee should also be well-versed in how to discuss the results and explain the positive parts and the constructive feedback to motivate change.

How does 360-degree feedback help organizations?

1. It involves everyone in the review process.

Traditional appraisals, such as annual or semi-annual performance reviews, typically involve the employee and their direct supervisor. The employee may fill out a self-evaluation, while the supervisor completes the majority of the appraisal.

But in a 360-degree feedback process, people who don’t always get a chance to evaluate their colleagues will have that opportunity. For example, direct reports are able to assess their managers. This can allow organizations to see areas for improvement that they may not have noticed otherwise, as well as gain valuable perspectives they may have been missing.

2. It can improve teamwork.

The 360-degree feedback process is by its very nature an exercise in teamwork. It asks employees to take a long, hard look at what the different members of their organization are doing right and what they could be doing better. It can also allow them to communicate better with one another and find ways to improve collaboration. Remember to be careful about instructing people on delivering feedback so that it’s actually constructive and actionable, though.

Additionally, this process will make employees more valued and respected, which can contribute to a more positive work environment overall. Team members will feel like their opinions are important and that they’re instrumental to improve the organization.

3. It helps remote managers evaluate their employees’ performance.

When teams or individuals are working remotely, it’s sometimes difficult to have a clear picture of their day-to-day contributions and performance. But with 360-degree feedback, managers can better understand how their employees fit into the overall organization and what their individual activities mean.

The process consists of reviews and perspectives from many different sources, so managers can get a detailed view of how their employees are contributing and functioning within the larger company.

4. It can help you support employees.

In addition to helping you understand how your employees are performing, this process also allows you to get a better view of your employees' needs. For example, you might discover bottlenecks that are preventing your employees from doing their jobs to the best of their abilities or inhibiting successful teamwork. You may also be able to identify training and professional development opportunities you should be providing to your employees.

This ultimately allows organizations to better support their employees and encourage them as they move forward in their careers.

5. It can reduce bias.

Bias seeps into many of our interactions, even when it’s unconscious, as it so often is (although not always, of course). And the 360-degree feedback process isn’t immune to bias. However, because so many different sources are contributing to an evaluation in this system, it’s less likely to interfere with an employee receiving an accurate assessment of their work and contributions to the company. 

That’s because the review doesn’t depend on any one person. For example, if the individual doesn’t get along well with their direct supervisor, that person’s perspective won’t be the only one that matters. Instead, the employee will get a chance to hear from the many people they work with regularly to have a more comprehensive evaluation.

How does 360-degree feedback help employees?

1. It allows employees to better understand their strengths and weaknesses.

The main purpose of 360-degree feedback is to help employees review their best qualities as workers and the areas that could use improvement. Remember: this isn’t meant to be a negative process in the least. Instead, it is intended to give employees an opportunity to see themselves and their performance as the people who work with them do. 

Rather than just honing in on the negative aspects, the employee may even discover strengths and talents that they didn’t even realize they had, thus contributing to a more positive self-view and helping them with their professional development.

2. Employees may be more likely to view the feedback as accurate.

When employees receive feedback solely from their manager, they could be justifiably concerned that the assessment isn’t wholly accurate. It could well be affected by individual biases, an incomplete view and other factors.

But when employees are receiving feedback from many different sources, they will probably be more willing to trust that the review is accurate and representative of who they are as a professional and an employee. Additionally, because the review evaluates many different angles of the employee’s performance, the overall analysis will be more complex and layered, giving them more to work with and act on.

3. It gives employees motivation to improve.

With this more nuanced picture and view of their own performance, an employee is better equipped and perhaps more willing to improve. That’s because they will see how others see them and give them concrete ways to make their work and skills even better.

Moreover, when the employee knows what they’re doing well, they will likely be more motivated to work on the areas that could use improvement. If they’re just hearing the negative, they may well feel like it’s hopeless — but when they feel valued, they will want to do even better.

4. It encourages employees to develop skills.

Along with feeling motivated to improve their weaknesses based on the constructive feedback they receive from their colleagues, direct reports, managers and customers, employees could very likely identify skills they would like to develop and improve. 

Perhaps, based on the results of the 360-degree feedback process, employers will want to implement new programs and professional development opportunities for their employees — that should certainly be a goal of the process — which will encourage and allow employees to improve their skill sets and develop new competencies.

What are the downsides of 360-degree feedback?

The 360-degree feedback process isn’t foolproof. While it can be valuable in many respects, there are some downsides that are important to note, especially when the review system isn’t properly designed or implemented. Here are a few drawbacks to be aware of and mitigate before making the process part of your organization.

1. It can inhibit self-growth.

When done well, the 360-degree feedback process will help employees understand their strengths and weaknesses and grow from that knowledge. But the reverse can happen, too, especially when reviewers aren’t adequately trained on how to deliver feedback or when the survey isn’t well-designed. 

At the end of the day, the survey should focus on giving the subject constructive and actionable feedback. But if the assessment is strictly evaluative, the recipient of the feedback may feel like there’s no room for them to improve. There’s also the risk of them taking the criticism personally if it focuses too much on the person and not enough on their work.

2. It can force employees to compare themselves to their peers.

Because this type of feedback cycle involves reviewing one’s colleagues, there can very likely be an element of comparison involved. Employees may not respond to this well — they could come to see their peers as competition or worry that they’re not as good at their jobs as their coworkers. These feelings of inadequacy could impact the nature of the feedback they give one another.

3. Employers might expect too much from it.

360-degree feedback can be very helpful in some contexts, but it should never be used in employment decisions, such as those that involve promotions, raises or firing. Making it a part of these important decisions will almost certainly interfere with the quality and authenticity of the feedback. It also makes the stakes much too high.

Instead, it should be reserved for helping employees understand and improve their performance.

4. It could be perceived as unfair and inaccurate.

There’s no way to make a 360-degree feedback system completely objective. Everyone has personal feelings that come into play when evaluating others. And when managers aren’t the ones delivering the feedback, a lack of experience could come into play when you’re using a ratings system. (Again, this is why you need to implement a training system before implementing this process in your organization.)

Ultimately, this could have an adverse effect on the company and employee morale, both in terms of the relationships employees have with one another and an individual’s own view of their own performance.

5. They require the participation of people who often aren’t experienced at delivering feedback.

On that note, when the system involves the opinions of people who aren’t experienced in administering feedback, they could lack the skills to deliver it fairly and authentically. A colleague who is close to the subject could unreasonably inflate their ratings, while someone who feels threatened by the individual might unfairly deduct points to make the subject look bad.

Moreover, peers could have unreasonable expectations — too high or too low — of one another. People may also have different perceptions of what ratings mean, which will negatively influence the results.

6. It’s not always constructive.

Sometimes, 360-degree feedback focuses too much on weaknesses and not enough on positive attributes or constructive ways to improve performance. Again, this could be due to a lack of experience on the raters’ part. A meaningful assessment should not dwell on the negative but give concrete suggestions for how an employee can boost their work.

Best practices for implementing 360-degree feedback 

We’ve touched on some of these points already, but they bear repeating. These are the best ways to mitigate the downsides and make the 360-degree feedback more effective.

1. Ensure anonymity.

Protect the reviewers’ identities. While the subject of the feedback should be able to see the individual ratings and comments, there shouldn’t be any names attached. Additionally, the results should be summarized to present an overall picture of employee’s performance so the report is not attached to any one person’s opinions.

2. Add a measure of self-reflection.

The employee’s own opinions of themself should also be part of the overall review. This is a valuable exercise in self-reflection, and an employee may identify aspects of their performance that they never considered previously.

3. Emphasize qualitative feedback.

Comments can provide just as or even more valuable feedback as ratings. When you’re training evaluators on how to complete their surveys, ensure that you emphasize the qualitative feedback aspect.

4. Avoid using 360 feedback to make employment decisions.

Remember: Don’t ever use this system to make decisions about promotions, raises, firings or other pivotal employment issues. This makes the stakes much too high for a system that depends on the perspectives of people who aren’t experienced in giving feedback.

5. Make the report actionable.

When collating the final report based on feedback from the subject’s peers, direct report, customers and others, focus on the constructive elements. In other words, give the employee valuable guidance on which they can act. This is pivotal in helping them improve their skillset and work practices.

6. Provide ample training.

Again, keep in mind that many of the people delivering 360-degree feedback probably don’t have much experience in providing constructive feedback at all. It’s important to help them understand what they should be considering and how they should be approaching the process to help make the process a success.

7. Continually refine the process.

Like all processes you implement at your company, the 360-degree feedback system will require continual refinement and improvement. Keep adjusting it to make the process a success for the subjects and those who are delivering the feedback. You could even ask participants for feedback on the feedback system!