Measuring Employee Performance with 360 Degree Feedback: How To Do It and What To Avoid
2 July 2021
Does anyone really look forward to performance review season? In my experience, employees, managers and even the HR team itself all dread the traditional performance review process. So perhaps it’s no wonder that more and more companies are turning to 360 degree feedback to enhance the performance review process. However, 360 degree feedback is not without its controversies…
In this article, we look at what 360 degree feedback involves, how it can sometimes go wrong, and how you can avoid these pitfalls to successfully implement 360 in your organisation.
What is 360 degree feedback?
If you think about the traditional feedback process, it’s entirely one way: a manager gives feedback to his or her direct reports. In turn, the manager receives feedback from their boss, and so on. Usually, this top-down process isn’t done very well.
Instead of just the manager’s perspective, 360 degree feedback gives individuals a broad assessment of their performance based on the views of various stakeholders. So, rather than just hearing what your manager thinks, your feedback encompasses four to eight different perspectives: your own (via a self-assessment), your direct reports, your colleagues/peers, your boss and, depending on your role, your customers, your suppliers, etc.
In this way, 360 degree feedback aims to answer the question, “How well are our people performing in the eyes of those who have a stake in their performance?”
Results from the surveys are confidentially tallied and presented to the employee, sometimes by a manager but ideally by a HR professional or coach. The insights gained from the feedback are particularly useful for identifying areas for training and development.
Why consider using 360 degree feedback?
Because they rely on many different perspectives instead of one, the results of 360 degree feedback reviews are often seen as more valuable than traditional top-down appraisals. Let’s not forget that traditional performance reviews can be biased based on the reviewer’s personal feelings (either positive or negative) towards the employee.
Say an employee and his manager don’t get along personally. In the traditional, top-down feedback process, he might have terrible reviews – yet the feedback from his peers and customers could be very positive. Or, in a different scenario, a colleague may be seen as distant by his co-workers, but well-liked by his clients. By democratising the process, 360 degree feedback helps to create a fuller picture of performance and identify where development is most needed.
The feedback from 360 degree reviews is so valuable because it is based on behaviours that other employees, customers and so on actually see and experience. This gives better insights into the behaviours and skills of employees, helping to pinpoint their strengths and weaknesses in a much clearer way.
Key pitfalls to avoid
In principle, 360 degree feedback has some big advantages. But in reality, if you fail to conduct the process appropriately, the consequences can be disastrous. I’ve seen 360 go very wrong, causing huge anxiety and ill will in the workplace.
The biggest problems tend to arise when 360-degree feedback surveys are not implemented properly. Few people love change, and changes in performance measurement can elicit strong emotional responses. The 360 process therefore needs to be carefully communicated, including how it will be used, and how it will benefit individuals and the company.
For example, some employees may become very defensive if they believe that their co-workers are deciding whether or not they get a pay rise! It’s therefore important that employees understand that 360 degree feedback is only one factor among many determining promotions and pay – it’s not the sole deciding factor.
When it comes to conducting the process, confidentiality and trust (or lack thereof) is the biggest pitfall I’ve come across. If it’s possible to trace specific comments back to reviewers, it could foster bad feelings between colleagues and lead to a hostile work environment. I believe surveys should be anonymous if you want people to give accurate feedback. It can also help to have a neutral party conduct the surveys and deliver feedback – whether that’s someone from HR or an external provider.
Another practical issue is that the surveys can become bloated, which results in participants not having enough time to complete them thoroughly and accurately. A well thought out, relevant feedback survey should not exceed 10 questions.
And finally, another pitfall is when companies fail to follow up on the 360 process. It doesn’t end once the feedback has been delivered. Individuals need a clear development plan that helps them act on what they’ve learnt from the feedback. Then, once a clear way forward has been identified, it’s important to monitor progress against those development goals.
Using 360 degree feedback effectively
Despite these potential pitfalls, I believe that 360-degree feedback gives a much more holistic view of skills and behaviours. It’s a fantastic way of identifying actual strengths and weaknesses based on observed behaviour.
Most commonly, 360 is used for managers and leaders only. Which makes sense given that it’s quite a labour-intensive process. However, wherever possible, I’d like to see 360 degree feedback expanded to others in the company, not just the leadership.
But however wide you decide to implement 360, there are some fundamentals that you absolutely need to get right if you’re to avoid the main pitfalls.
Firstly, for 360 to really work, you need an open, supportive and learning-focused culture. If you create the right supportive culture – in which people across the company are happy to receive feedback – you create the environment for successful 360 degree feedback. This means communication, practical support and a certain amount of hand-holding throughout the entire process is needed.
You also need to think carefully and figure out the right questions and what behaviours you want to assess. Working with a coach is the best way to help you design 360 questions and select the appropriate people to survey. (It’s a mistake to let individuals choose their own raters as they may choose people they know are more favourable towards them.)
There are also certain practical steps you can take to ensure confidentiality and employee trust, such as using a neutral, independent administrator (e.g. an external consultant or HR representative), ensuring anonymity, and encrypting the response data.
When it comes to collecting feedback and interpreting results, expert help is critical. A neutral coach – either an external coach or HR professional who is trained in coaching – will help put everything into perspective and identify priorities. The same is true for delivering the feedback in a constructive, supportive way; it’s often easier for people to receive feedback from a neutral party rather than their manager, so a coach helps make the whole process less threatening. An independent coach will help the individual understand and interpret their feedback and create a meaningful development plan for the future.
Where to go from here
If you would like to know more about KPIs and performance measurement, check out my articles on:
- How to Give (and Receive) Negative Feedback
- How to Measure HR Effectiveness
- How do you Measure Employee Engagement?
Or browse the KPI Library to find the metrics that matter most to you.
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