When it is performance appraisal time, many managers and HR leaders contemplate adding 360-degree feedback to the process. We hear, “Wouldn’t it be great if we included feedback from peers, direct reports, and others to get a better picture of an individual’s overall performance?” Yes! We won’t debate the continual argument of whether organizations should use 360s for appraisal. But, beware.
Below are just a few of the items to consider when determining if your organization is ready to use 360 feedback for performance appraisal:
- 360-degree feedback is an add-on. A 360 survey is good for measuring competencies, not operational metrics. Measurable competencies include areas like communication, innovation, and decision-making. It may not be a good tool for peers or direct reports to evaluate whether the individual accomplished KPIs or other business metrics. The manager may be the only person able to assess those areas; you will still need to use a separate form or set of questions to capture that information. Don’t think that you can kill two birds with one stone.
- Consider your culture. If you have never used 360 surveys in your organization before and there is a low-trust environment, don’t start the 360 process with performance appraisals. Instead, use 360 feedback for development with your senior leaders first, and then roll it out over a period of time until the culture is ready to use it with appraisals.
- Decide how to use the results. Don’t tie the 360 score to the evaluation during the first year! Instead, include the goals from the resultant action plan as part of the performance appraisal for the next year. This way, you are evaluating the completion of the goals, as opposed to a change in scores. Over time, the scores can be incorporated as part of the overall appraisal score. Remember, 360 appraisal results compliment the review, but do not a replace the current process.
- It will take more time. Because you will gather feedback from multiple people, each employee could take up to 10 surveys each. You also need to budget time to decide who will provide feedback to whom. To make the process more efficient, use a short survey (20-35 items) and restrict the number of raters for each person to five to ten. The downside is that you will reduce the number of questions and raters a developmental 360 typically provides.
- You will spend more. This is not a cheap replacement for your evaluation process (and software system). You will need to purchase a good software tool or partner with a 360 survey provider. If you use a do-it-yourself software tool, be prepared to spend much more time on the entire process. Service providers run the entire process for you and save you valuable time, while increasing confidentiality and accuracy.
- Train your managers. How do you plan to teach people about the 360 process and provide performance-related feedback? What happens after someone receives their 360 feedback results is the most important part of the process. Managers will need to know how to interpret the results and coach their employees to create a personal development plan.
Bottom line: If you are only looking to simplify the performance appraisal process and save money, then 360 feedback is not the answer. But is it worth it? It certainly can be, if done correctly. Organizations that implement 360-degree feedback as part of their performance appraisal process report higher levels of completion, fairer evaluations, increased accountability, more personal growth, and a more open corporate culture.
If you have used 360 feedback for performance appraisal, what has been your experience? What other advice would you give?
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