Employees don’t work in silos, no matter what any of them think and how insignificant they think their job roles are. Their jobs affect the fortunes of the entire firm, and as ambassadors of the firm to the wider community and audience, they will have a role to play even if the number of employees in the firm runs into the thousands or the tens of thousands. As such, when it comes to career development and goal setting, employees and firms can benefit greatly from 360-degree feedback instead of simple direct performance appraisals from their managers.
360-degree feedback refers to the kind of performance appraisal exercise in which a single employee receives feedback on her performance from multiple sources, including managers, reporting employees, peers, and sometimes even external customers. By combining feedback from these diverse and distinct sources, firms can gain greater insight into the overall impact that an employee has on the overall operations of the firm. Whereas a traditional feedback mechanism works 90 degrees in the sense that employees receive appraisals from their direct managers, 360-degree feedback focuses on the overall performance of the employee. Such feedback can be particularly revealing for employees who hold managerial positions and those who work in customer-facing roles.
So how does 360-degree feedback help both the firm and those going through the feedback cycle?
More Complete and More Effective: When performance appraisals are conducted by only one source, there is the chance that something might be missed or personal biases might be introduced. By including appraisals from multiple sources, such biases can be equalized, and higher-ups can gain a truer understanding of the performance of employees. Also, when such multiple and diverse sources of information converge, the value of these sources, as well as their feedback, also increases.
Better Goal-setting: Goal-setting is one of the objectives of appraisal cycles. After reviewing the performance of the employee during the previous appraisal period, the next step is to set goals for the current period. After 360-degree feedback, the goals set will be a better reflection of the employee’s abilities rather than with traditional appraisals since 360-degree feedback puts the accent on the employee’s competencies and character rather than performance on individual specific, measurable goals.
Improved relationships with external stakeholders: Some organizations take 360-degree feedback processes seriously and gather feedback even from external stakeholders such as suppliers and customers. When such external stakeholders notice that organizations make a concerted effort to collect their feedback and take steps to incorporate their feedback into employee career development plans, they understand that firms are serious about their external relationships and will reciprocate the same towards the organization.
Methodical, rather than outcome-oriented: Performance appraisals are sometimes not taken very seriously in organizations since employees gain a feeling that it is an also-done task that simply needs to be completed before going back to day-to-day work. Also, when performance management cycles are run across outcomes rather than with an accent on improving the employee, employees lose respect for them and just take them as they come. 360-degree feedback gives much more importance to employee skill development and behavior development methodically and allows employees to become better versions of themselves.
Transparent and improves communication among employees: Not that employees know all the others who give them feedback, and not that employees know who had given them specific feedback, but such 360-degree appraisal programs can have a cathartic effect, with different employees giving their say on the behavior and tendencies of a particular employee to be able to achieve corporate targets. Furthermore, it can also improve communication among employees for the same reason.
That is not to say, however, that everything is rosy about 360-degree feedback cycles. It might not be the best feedback process for all the roles within an organization and can actually introduce more noise than useful. It can also reduce trust among peers since employees will now be a little cautious about expressing themselves among their peers. This can actually reduce team morale and lead to bad outcomes in the workplace. Also, conversely, it can lead to an attitude of ‘you scratch my back, I scratch yours’ at the workplace, with different employees coming together and providing better feedback than they deserve to one another. Also one can also make the argument that not everyone is trained at providing feedback on the performance of others, and therefore make mistakes, albeit by mistake, in providing feedback.
However, the good of 360-degree feedback systems outweigh the evils, and when properly and effectively implemented, they can be very useful for the organization. Today, organizations have the advantage of the knowledge of various Human Resource Information Systems (HRIS) and can implement 360-degree feedback systems effectively and efficiently.