What Is a 360 Degrees Performance Appraisal?

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During a performance appraisal, a supervisor will determine if and to what extent an employee has met agreed-upon goals or requirements in the workplace. Usually, it's the supervisor himself who gets to make this assessment based on his personal knowledge of the employee. A 360-degree assessment works a little differently. Here, the employee gets structured feedback from several sources, including colleagues, managers, peers, direct reports and even clients and customers. This gives a more holistic view of the person's performance.

TL;DR (Too Long; Didn't Read)

A 360-degree performance appraisal system is a multi-rater feedback system where everyone who routinely interacts with the employee gives their opinion of his performance.

What is a 360-Degree Appraisal?

The 360-degree feedback questionnaire is a type of performance appraisal that features comprehensive feedback from many different people in the work environment, not just the employee's immediate supervisor. This can include managers, peers, coworkers, reporting staff members, customers and even suppliers. The aim is to get an all-around assessment of the employee's performance and not just a single-person view.

It's called a 360-degree appraisal because everyone within the employee's circle of influence can give their opinion on the employee's performance.

Organizations that operate 360-degree appraisals generally do so across the board, meaning everyone from senior leaders and managers right down to the most junior staff member gets assessed by his colleagues and direct reports. This results in managers being more challenged in their leadership behaviors, which can serve as a jumping point for leadership development programs.

360-Degree Feedback Vs. Traditional Performance Appraisals

With a traditional performance evaluation, a supervisor would review the employee's performance and provide feedback – the appraisal is effectively one person's assessment of how well the employee is doing. The problem here is human bias: we are all emotional beings and we all have personal interests and prejudices that can make it difficult for one person to make an objective assessment.

The 360-degree performance assessment removes the potential for bias because it is focused on the feedback or ratings of many people, including other managers, coworkers, reports and customers. The assessment of the direct supervisor still plays a role but it is only a partial role – it's one slice of the 360-degree pie. The system is built on the idea that the more people you involve in the process, the more accurate and objective the assessment will be.

How Does It Work?

Usually, the various feedback providers will be asked to fill out a standardized questionnaire. Every feedback provider (team members, colleagues, bosses, reports, customers and so on) answers the same questions confidentially, with the goal of receiving high-quality and targeted feedback on the person's strengths and development areas. The employee, too, might fill out a self-assessment based on the same questions, although this is not a feature of every 360-degree appraisal.

Once the questionnaires have been completed (online or offline), they are brought together and evaluated, often in the form of charts and scores. The employee will then meet with his supervisor to discuss the outcomes of the assessment and discuss what happens next.

Benefits of 360-Degree Performance Appraisals?

Besides the obvious benefit of reducing bias and discrimination tendencies, 360-degree feedback can provide the following benefits:

Team development

Under the 360-degree feedback system, every individual on the team will give feedback on the performance of the other team members. This encourages individual members to listen to each other, observe each others' work styles and become more conscious of the contributions that each person makes to the team. It also encourages team members to be more accountable to each other as their insights are shared through the feedback forms they fill out for each other.

Wider sphere of vision

Gathering feedback from others in the employee's circle of influence gives insight into the areas of performance that an immediate supervisor may not see, such as how the employee treats those reporting to him. It also gives a broader insight into the way the team is operating in terms of accomplishing the company's mission and meeting customer expectations.

The supervisor can discover which employees are working successfully together and which are not, for example, and learn how the company's structure and protocols may be helping or hindering the team's success. This can expose procedural issues that can hinder teamwork, customer service, accountability and growth.

Promotes transparency

The multi-rater feedback system is a practical way to get everyone in the organization comfortable with receiving feedback from bosses, coworkers and direct reports. Leaders, in particular, get a fresh look at how their strategies are impacting people further down the hierarchy which can help their leadership development.

Career development areas

Many employees feel that 360-degree feedback gives them a more accurate, balanced view of their performance. This information is critical for both career and personal development.

Drawbacks of 360 Degree Performance Appraisals?

A 360-degree performance appraisal system has a good side, but some parts of it can get pretty ugly and even cause problems for the organization if the process is not handled correctly.

Trolls and revenge-seekers

With traditional performance appraisals, an experienced supervisor or HR manager will design and conduct the review, striving for fairness and transparency in the process. For instance, managers are often taught to focus on specific competencies, strengths and areas of improvement rather than the employee's personality in order to overcome bias.

While the same good intentions might apply to a 360-degree appraisal, you have the additional input of inexperienced raters. Peers and direct reports may inflate ratings to make a friend look good, or deflate ratings to get revenge against someone they don't like. This introduces the very bias that 360-degree appraisals are supposed to prevent, and the system needs strong checks and balances to overcome these pitfalls.

No recourse

Since the 360-degree feedback sample system is anonymous, people can say whatever they want about the person they're reviewing. Neither the person being reviewed nor his supervisor has any recourse to seek clarification on the feedback. This can be morale-sapping for an employee who doesn't have the information he needs to properly defend against a poor comment, and it can render the feedback meaningless if it's out of context or contradicts the rest of the responses.

Takes time and effort

In some organizations, the 360-degree appraisal system may fall at the first hurdle due to the sheer amount of data points there are to collect. The supervisor has to make a significant time investment in generating and creating feedback sheets and translating the feedback into some type of meaningful development plan.

Doesn't add value

Finding out that an employee is friendly with customers on the telephone or helped a junior staff member find the resources he needed is marginally interesting, but comments like this fail to add value if they are not linked to performance goals or the employee's job description. Do the people giving the feedback understand the competencies expected of this particular employee? If not, then their feedback could be too detached to add any value.