Advantages and Disadvantages of 360 Degree Feedback

360 degree feedback program aims at solving multi-dimensional problems in an organization, ranging from employee engagement and attrition to development and succession planning. Just like the full angle, 360 degree feedback gives an all-round report of an employee’s journey in the organization, his/her strengths, challenges, roadblocks, or any latent leadership potential that can be improved with minor training intervention and effort.

Witnessing the growing implementation of 360 degree feedback in the industry, most organizations are now adopting 360 degree feedback, factoring in the upcoming performance reviews that become troublesome for HR professionals, especially large scale.

360 degree feedback was never designed principally for appraisal purposes because the product owners did not want to create a bias among employers before making appraisal-related decisions. However, organizations have been known to use 360 feedback, especially during appraisals. 

Companies in the Southeast Asian region notably rely on 360 degree feedback to meet their performance appraisal goals. The reasons can be many, ranging from handling a large volume of people to resorting to a simpler and time-efficient means of appraisal that delivers quality results. 

On the other hand, developed geographies use 360 degree feedback to identify employees’ training needs and further strengthen the weak areas through persistent efforts, relentless training and overall development. The importance of 360 degree feedback can be found across organizational efforts.

A 360-degree feedback process is one in which employees receive anonymous, confidential feedback from the people associated with them includes their supervisors, peers, and direct reports. One of the best benefits of the 360 feedback is that leaders/managers within organizations use it to determine the strengths and weaknesses of those being surveyed through this process.

Depending upon how organizations implement it and its findings, there are obvious benefits of 360 degree feedback as there are disadvantages of 360 degree feedback.

When implemented effectively, the purpose of 360 degree feedback is to significantly impact employee engagement and professional development. While there are multiple benefits of 360 degree feedback, one cannot overlook its drawbacks. But that does not mean we entirely shun the tool and its varied implementable features. Such challenges call for measured steps and calculated decisions to make 360 degree feedback smoother. We do not wish to vaunt its efficacies or lacerate its inadequacies but offer you a succinct and balanced understanding of its benefits and drawbacks. Let’s accept that nothing is perfect and explore 360 degree feedback advantages and disadvantages:

The Advantages of 360 Degree Feedback

In a recent conversation with Storage Vault, Commercial Director Kraig Martin revealed that the benefits of 360 degree feedback included making their organization’s feedback process considerably transparent, motivating employee engagement in the process, and proved instrumental in improving the overall efficiency of the feedback process.

Listed below are the advantages of the 360 degree feedback system:

According to Martin, one of the key benefits of 360 degree feedback is that it helps employees develop self-awareness of their own strengths and weaknesses, motivating them to journey toward self-improvement. “It has definitely helped our team to develop their skills, which has, in turn, improved personal motivation and reduced staff turnover. After all, if you’re receiving the same feedback from multiple people, you’re more likely to take that into account rather than just one person.”

360 degree feedback helps bridge the gap between what employees think of themselves and others’ opinions of them. It is a good practice toward self-awareness. It benefits the organization, but it also acts as a guiding light for employees since individual responses are combined with other responses to preserve anonymity. It offers the employee a clear picture of his/her overall strong and weak areas.

While skill gaps are a roadblock for organizational success and development, they equally hamper individual growth.

360 degree feedback system reports give an overall view of the employee’s personality by collating all replies from colleagues, subordinates, managers, or clients and analyzing everyone’s response. Individual and group-level analysis indicates the vacuum of skill or competency existing in a particular team or team member.  So, if an issue is identified across a unit, training programs can be deployed to bridge those gaps.

Feedback from peers not only boosts an employee’s morale but also helps them and their managers work better. As different teams receive feedback from others in the organization, they build trust and are more likely to meet their mutual goals. The feedback increases the intra-team frequency of communication, ultimately leading to an increase in overall performance. 

The benefits of 360 degree feedback also include aligning an employee’s development goals with that of the organization, thus painting a clear picture of which skills and competencies are required to excel in their current position.

After years of experience, Maple Holistics HR Manager Nate Masterson concludes that “the main benefit of a 360 degree appraisal for employers is to really understand an employee’s role in the company, beyond what they see in the outcomes of tasks. It helps higher-ups understand how the worker fits in with the team and other nuances that don’t necessarily translate into the finished product of a work assignment.”

Aston & James, LLC CEO Nick H. Kamboj believes that there are various benefits of 360 degree feedback in an organization as “it provides increased transparency, which enables all individuals in the organization to further develop trust between members. The increased trust then leads to enhanced decision-making, leading to eventual performance and revenue increment. When 360 feedback is executed well and professionally, the organization has a significant foundation and knowledge pool to assess its HR and recruiting policies as well as its management team structure. By realizing the true purpose of 360 degree feedback, organizations can truly tap into unrealized potential and idea generation from its employees regarding how to improve operations as well as any other changes to the company.

The Disadvantages of 360 Degree Feedback

When it’s done well, 360 degree reviews allow your staff members to improve in key areas that might be limiting their upward career path or causing major conflicts within a team. However, when done poorly, 360 programs create mistrust, anger, conflicts and can leave a team with lower morale than when you started the exercise.

Listed below are a few disadvantages that inadvertently tag along with the tool:

Martin feels that some managers can be tempted to use 360 degree feedback to concentrate on finding negative aspects of an employee’s performance rather than celebrating and developing positive aspects. This can lead to reduced rates of engagement unless you’re careful. Thus, it mandates approaching 360 degree feedback being mindful of such possibilities and finding the right balance between the two types of feedback.

If there is a lack of trust in the people administering the 360 degree appraisal, no one will offer honest feedback. Respondents will respond only to what they think you want to hear, making the feedback useless. It is then critical to set up and administer the 360 feedback with transparency and clear guidelines. 

Additionally, if employees believe the data is used for performance input, they could either make side agreements to rate each other higher or potentially rate others lower to make their score appear higher than their peers.

Aleman posits that if a leader does not communicate what he/she learned or what he/she will do to address the feedback, then those participating feel that it was just a useless exercise and won’t amount to any tangible change. That depletes trust in the leader and the organization and hurts engagement. Following through with an action plan created from the feedback is critical to the leader’s reputation and the trust he/she garners from the teams.

Masterson points out the other downside of 360 review – it takes up significant time, both from fellow team members and HR professionals. Other staff members need to take the time to answer questions and to hopefully do so thoughtfully. Supervisors and HR employees then need to then sift through all the material to use it meaningfully. Weighing feedback from multiple sources and integrating that information into a comprehensive appraisal document can be daunting. Although customized software can expedite this process, setting up the system remains a challenge.

Mann Consulting, LLC President Christine Mann offers interesting insights into the selection process. She says that when selecting raters, it is most critical that a participant doesn’t just select raters that are “fans.” This sometimes leads to skewed results. She recommends that participants should get their raters reviewed by leaders to ensure that the right players are on board. When 360 degree feedback is done via the interview style, the third party can misinterpret the feedback. So, Christine prefers a direct line to the rater through a survey-based tool.

You can also read ‘The Definitive Guide to 360 Degree Feedback’ for a comprehensive understanding of the subject.

1. Employee Development

Founder of Barrington Coaching says that 360 degree feedback encourages employees to share the purpose of their development with their manager. Ideally, the employee and their leader use the data to identify strengths that they should continue to leverage and how they’ve made them successful to date. They then focus on one or two areas of improvement in which they could close some gaps.

2. Performance Appraisals

While experts believe that there are many 360 degree appraisal advantages and disadvantages, the involvement of multiple feedback can definitely lend more credibility to the appraisal and promotion process. 

The benefit of 360 degree appraisal is that it is designed to align with the company’s performance management system, enabling measuring the desired behaviors for performance management purposes. In this case, the data is used as input for the final performance rating.

While the merits and demerits of 360 degree appraisals are highly debated, we believe one should tread with caution when using 360 degree feedback for appraisals. To take full benefits of 360 degree appraisal, organizations should focus on them as part of a larger development scheme.

3. Succession Planning

Finally, the 360 degree feedback tool comes in handy when preparing certain employees for new roles, especially critical leadership roles. In this particular scenario, the review helps familiarize the administration with a potential leader’s strengths and possible blind spots that may hinder the company’s progress.

360 feedback reviews are useful to the employee as they provide a well-rounded and balanced view of their skills and behaviors. In this model, feedback isn’t just given from the individual’s supervisor but from various people in the organization. This provides a fair and more accurate picture of the employee’s demonstrated behavior.

Implementing a 360 degree feedback process in organizations is a smart investment and a business decision as it promotes self-awareness and creates transparency in communication. The benefits of 360 degree feedback are increased transparency among the internal team via trust, sharing, and increased clarity toward expected behaviors and goals. A well-crafted 360 degree feedback tool and the process can boost overall team performance.

Mercer | Mettl’s 360View offers all the benefits of 360 feedback along with an easy-to-use platform, expert support and customizable reports.