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Advantages and Disadvantages of 360 Degree Feedback

What is 360 Degree Appraisal?

Popularly known as multi-rater feedback, 360 degree appraisal is the systematic collection and feedback of performance data on an individual or group, derived from a number of stakeholders. The data is collected via respondents that include reporting manager, colleague, subordinate and in some cases, your client too. The opinion and ratings from the participants are then fed into the system to churn out comprehensible, actionable development report.

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 software gives an all-round report of an employee’s journey in the organization, his strengths, challenges, roadblocks or any latent leadership potential that can be polished with little training and effort.  

Witnessing the growing implementation of 360 degree feedback software in the industry, a majority of organizations have started adopting 360-degree feedback keeping in mind the upcoming performance reviews that becomes troublesome for human resources especially when conducted on a large scale.

Importance of 360 Degree Feedback System

The fundamental aim of creating 360 degree feedback software was never appraisal. This was so because the product owners did not want to create a bias in the minds of employers before making decisions related to appraisals. However, organizations have been known to use 360 feedback especially during appraisal time. The South East Asian region in particular relies on 360 degree feedback program to meet their performance appraisal goal. The reason can be many ranging from handling a large volume of people to resorting to a simpler means of appraisal that is time-efficient and delivers quality results. On the other hand, developed geographies use 360 degree feedback program for identifying training needs in employees and further strengthening the weak areas through persistent efforts, relentless training and overall development.

Advantages and Disadvantages of 360 Degree Feedback

Depending upon how organizations implement it and its success, there are advantages and disadvantages of 360 degree feedback. 

Only 23% of HR executives think that their performance management process accurately reflects employee contributions.

However, when implemented effectively, 360-degree feedback systems can have a significant impact on employee engagement and professional development, however it is this misunderstanding that accounts for the failures of the objectives of 360 degree performance appraisal system. While there are multiple benefits of 360 degree feedback system, they come along with their set of drawbacks. But that does not mean we shun away the tool and its ample of good features entirely. Upcoming challenges call for cautionary steps and calculated decisions to make the performance appraisal smoother. Let’s accept the fact that nothing is perfect. And like everything else, there are various advantages and disadvantages of 360 degree feedback. Let’s explore them:  

Read Our Blog The Basics of 360 Degree Feedback & Why is it Important in 2019 to Know More

What are the Advantages of 360 Degree Feedback System?

In a recent conversation with Storage Vault Commercial Director, Kraig Martin revealed that the benefits of using 360 degree feedback for them includes making their organization’s feedback process much more transparent, motivating employee engagement in the process and has proved to be instrumental in improving the overall efficiency of feedback process.

Listed below are the advantages of 360 degree feedback system:

1. Creates Self-Awareness

According to Martin, 360 degree feedback gives employees a much better self-awareness of their own strengths and weaknesses, which motivates them to take up the journey towards 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.

2. Identifies Training Gaps

Once participants finish answering survey questions, the responses straight away get collected in the survey repository. This is where the crucial importance of 360 degree feedback system lies. Now, the feedback tool collates all replies from colleagues, subordinates, managers or clients and analyzes everyone’s response. The analysis indicates the vacuum of skills 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.

3. Strengthens Leader’s Connect with Management

As per Aleman & Associates Executive and Leadership Coach Maribel Aleman, 360 feedback gives leaders a laser focused approach to their development. It also helps align a leader’s priorities with their senior management as the 360 provides clear data on where the leader is spending their time.

4. Gives Insight into Employee’s Work

After years of experience, Maple Holistics HR Manager Nate Masterson concludes that the main objectives of 360 degree performance 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.

5. Increases Transparency Within the Organization

Aston & James, LLC CEO Nick H. Kamboj believes that there are various benefits of 360 degree feedback system 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 and eventually performance increases as well as revenue generation. 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 objectives of 360 degree performance appraisal, 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.

What are the Disadvantages of 360 Degree Feedback?

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

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

1. Sidelines Positive Feedback

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 reduce rates of engagement if you’re not careful, so it makes sense to approach 360 degree feedback with this in mind, and to be mindful of finding the right balance between the two types of feedback.

2. Garners Dishonest Reviews

If there is a lack of trust in the people administering the 360-degree appraisal, no one will give honest feedback. Respondents will respond only to what they think you want to hear, making the feedback useless. It is then critically important 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 elevated against their peers.

Read Our Blog The feel and future of 360-degree feedback to Know More About 360 Review

3. Increases Distrust in the Leader

As per Aleman, if a leader does not communicate what they learned or what they will do to address the feedback, then those that participate feel that it was just a useless exercise and nothing will change. That depletes trust in the leader and the organization and hurts engagement. Following through an action plan created from the feedback is critical to the leader’s reputation and the trust they garner from their teams.

4. Time Consuming Process

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

5. Provides Biased Opinions

Mann Consulting, LLC President Christine Mann offers interesting insights into the selection process. She says that when selecting raters what is most critical, is 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 360s are done via interview style, the feedback can get misinterpreted by the third party. So, a direct line to the rater is what Christine prefers through a survey based tool.

How 360 Degree Feedback Improves Performance?

Organizations have been known to use 360 degree feedback for multiple reasons. To find out what really goes on behind the brands, we interviewed certified coach, workplace strategist and HR consultant Lisa Barrington. With over 25 years of varied experience, Barrington has interacted with thousands of clients and given her invaluable guidance to enhance workplace strategies for meeting long-term goals.

Are 360 reviews effective?

360 reviews help organizations in varied ways as mentioned below:

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, and then focus on one or two areas in which they could close some gaps.

2. Performance Review

When it comes to performance review, 360 behavioral measurements are designed to align with the performance management system of the company, so that they measure the desired behaviors for performance management purposes. In this case, the data is used as input into the final performance rating.

3. Succession Planning

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

Conclusion

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

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

The Mercer | Mettl Way

Mercer | Mettl has a one-stop solution for all your 360 degree performance evaluation needs. It offers 3 effective tools to evaluate an employee’s potential and abilities. Mentioned below are the benefits of 360 degree feedback process:

Performance Appraisal

The evaluation tool provides you overall employees’ perspective in the form of a seamless platform, intuitive reports, and customizable surveys.

  • Seamless Platform: Eliminates operational hassles from the 360 degree feedback process by the quick set-up, effortless administration, and automated reminders.
  • Intuitive Reports: Mercer | Mettl helps in preparing beautiful reports and dashboards with clear and actionable information. It consists of comprehensive feedback reports, group reports, and easy-to-understand dashboards.
  • Customizable Survey: It helps you customize questions to competencies to reports. Mercer | Mettl will help you build custom questionnaires, an exhaustive competency library, and multiple question types.

You can visit the link for more details on Performance Appraisal.

Training Needs Identification

The assessment tool helps in identifying gaps in the behavioral traits of an employee as perceived by other stakeholders.

It Is Divided into 3 Pillars:

 

Why to Train

Mercer | Mettl identifies and develop key competencies in employees to achieve business goals

Who to Train

It helps in identifying the skill gap for each employee based on the competency levels

What to Train

It helps in designing a customized training plan based on individual skill gaps and training needs

Apart from that Mercer | Mettl helps you in curating the right training program for your organization. It is divided into 3 parts:

Skill-based: It helps in identifying employee’s unique skill sets required to succeed in every job role and function.

Behavior-based: It identifies behavioral gaps that need to be worked upon employees. They are basically the dominant predictor for most roles.

Future-Proofing: It augments the learning agility within the organization by identifying upcoming skills to develop in the workforce.

For more details on this, visit the link.

Succession Planning

This tool understands behavioral dynamics observed on-the-job and improves the developmental steps.

Mercer | Mettl can help you plan Succession Planning in the following way:

  • Identify: It defines key competencies required to succeed in critical roles and nominate candidates.
  • Assess: Valid and reliable tools such as Psychometric, Aptitude Assessment, Assessment and Development Centers, and 360 Degree Performance Evaluation is used to assess candidate readiness on key competencies.
  • Plan: Customized reports are used to shortlist the suitable candidates for succession.

Act: There is a check on the growth of selected candidates.

About Mercer | Mettl

At Mercer I Mettl, our mission is to enable organizations to build winning teams by making credible people decisions across two key areas: Acquisition and Development. Since our inception in 2009, we have partnered with 2900+ corporates, 31 sector skill councils/government departments, and 15+ educational institutions across 90+ countries.

Mettl was acquired by Mercer in 2018, a global consulting leader in advancing health, wealth, and career, and a subsidiary of Marsh & McLennan Companies (NYSE: MMC), the leading global professional services firm in the areas of risk, strategy and people.
For more information, visit www.mettl.com. Follow Mercer | Mettl on LinkedIn and Twitter @MercerMettl.

Source: https://www.decision-wise.com/10-tips-for-using-360-degree-feedback-for-performance-appraisal/

Sliding CTA_Build an Impeccable Feedback System to Enhance Your Organization’s Growth and Success

Originally published February 12 2019, Updated June 16 2020

Megha Singh

Written by

A writer at heart, Megha has been in the content industry for 4 years. Starting her career from print, her journey spans across IT, legal and consulting industries. She has been associated with Mercer | Mettl as Assistant Manager, Content Marketing for 2 years.

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