360 degree appraisal

360 DEGREE PERFORMANCE APPRAISLT.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISL

PERFORMANCE APPRAISAL

INTRODUCTION

People differ in their abilities and their aptitudes. There is alwayssome difference between the quality and quantity of the same work on the samejob being done by two different people. Therefore, performance managementand performance appraisal is necessary to understand each employee‘s abilities,competencies and relative merit and worth for the organization. Performanceappraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. Thehistory of performance appraisal can be dated back to the 20th century and thento the second world war when the merit rating was used for the first time. Anemployer evaluating their employees is a very old concept. Performanceappraisals are an indispensable part of performance measurement. Performanceappraisal is necessary to measure the performance of the employees and theorganization to check the progress towards the desired goals and aims. The latest mantra being followed by organizations across theworld being – ―get paid according to what you contribute‖ – the focus of theorganizations is turning to performance management and specifically toindividual performance. Performance appraisal helps to rate the performanceof the employees and evaluate their contribution towards the organizationalgoals. If the process of performance appraisals is formal and properlystructured, it helps the employees to clearly understand their roles andresponsibilities and give direction to the individual‘s performance. It helpsto align the individual performances with the organizational goals and alsoreviewtheirperformance. Performance appraisal takes into account the pastperformance of the employees and focuses on the improvement of the futureperformance of the employees.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLFEATURES OF PERFORMANCE APPRAISAL1) Setting SMART Goals for Employees: Goal setting provides leaders, managers and employees with web-basedtools to set SMART goals and track progress on frequent intervals.2) Evaluate Employee Performance: Employee Appraisal ensures objective and accurate evaluation of youremployee‘s performance and helps you find the strengths and weakness ofthe employee.3)Coach and Train Employees to improve their performance: To continually improve performance of your organization you need tocontinuously training employees to update their skills and competencies.Training Management allows you manage employee training effectively.4) Define competitive employee compensation plans:Employee compensation plan helps you to remain competitive in yourbusiness and attract and retain talented employee.5)Promote right employees to critical positions:Organizations success by placing right employee in right positions.T.Y.B.M.S


OBJECTIVE OF PERFORMANCE APPRAISAL

Objectives of Performance appraisal:To review the performance of the employees over a given period of time.To judge the gap between the actual and the desired performance.To help the management in exercising organizational control.Helps to strengthen the relationship and communication between superior– subordinates and management – employees.To diagnose the strengths and weaknesses of the individuals so as toidentify the training and development needs of the future.To provide feedback to the employees regarding their past performance.Provide information to assist in the other personal decisions in theorganization.Provide clarity of the expectations and responsibilities of the functions tobe performed by the employees.To judge the effectiveness of the other human resource functions of theorganization such as recruitment, selection, training and development.To reduce the grievances of the employees.T.Y.B.M.S


PERFORMANCE APPRAISAL SYSTEMS

Issues like promotions, demotions, bonuses and pay will affect thesuccess or failure of a 360 degree performance appraisal. Keep in mind thatperformance appraisal systems are used to define employee goals, employeecontributions and determine the employee‘s results in meeting those goals andcontributions. It is a genuine review of past employee performance.T.Y.B.M.S


PERFORMANCE APPRAISAL - PUNISHMENT TOOL OR

ORGANIZATIONAL CATALYST

Performance Appraisal is one of the core HR activities. It is theassessment of the employee‘s job performance. It is completely based onemployee‘s job description and objectives to be achieved. Performance Appraisal (PA) has 2 basic purposes. First, PA serves anadministrative purpose. It provides information for making salary, promotionand layoff decisions as well as providing documentation for justifying thesedecisions. Second, rather more importantly, performance appraisal serves adevelopmental purpose. This information can be utilized for determiningtraining needs, career planning and succession planning. Employees have mixed views about performance appraisals.According to one segment, it is for the betterment of the employees and theorganization. Those employees, who work efficiently and effectively, will getthe agreed intrinsic as well as extrinsic benefits. It is being regarded as anexcellent method of keeping everyone motivated. The better you perform, themore you get. On the contrary, some employees suggest to their managers thatcompanies should get rid of performance appraisals as it is a bitter processwhich has the ability to create emotional pressures and stress for the employees.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLA manager‘s bias also plays its role. Furthermore, he might lack proper trainingfor evaluating employees‘ performances. Their perception is that ―no matterhow well we perform, our contributions will never be acknowledged.‖Annual performance The annual performance appraisal might be the most importantmeeting you have with your employees all year. Appraisals offer an opportunityto clarify job descriptions, set goals and objectives, formulate sensiblecompensation decisions, and decisively address any performance challenges.Properly handled, performance appraisals can correct personnel issues and setemployees on a positive course for the coming months. Handled poorly, theyhave the potential to demoralize employees, provoke EEO complaints, anderode trust in management. This session is a must for managers and human resource professionalswho are frustrated with the typical ineffectiveness of performance managementdiscussions in advancing organizational goals and promoting positive employeerelations.T.Y.B.M.S


360 DEGREE PERFORMANCE APPRAISAL

INTRODUCTION

Unlike, the traditional top-down appraisal where a supervisorappraises the performance of their subordinate, 360 Performance Appraisalincorporates multiple perspectives by using feedback from a variety of sources.360 degree feedback, also known as 'multi-rater feedback', is the mostcomprehensive appraisal where the feedback about the employees‘ performancecomes from all the sources that come in contact with the employee on his job. 360 degree respondents for an employee can be his/her peers,managers (i.e. superior), subordinates, team members, customers, suppliers/vendors - anyone who comes into contact with the employee and can providevaluable insights and information or feedback regarding the ―on-the-job‖performance of the employee.360 degree appraisal has four integral components:1. Self appraisal2. Superiors appraisal3. Subordinate‘s appraisal4. Peer appraisal. Self appraisal gives a chance to the employee to look at his/herstrengths and weaknesses, his achievements, and judge his own performance.Superior‘s appraisal forms the traditional part of the 360 degree appraisal wherethe employees‘ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on theparameters like communication and motivating abilities, superior‘s ability todelegate the work, leadership qualities etc. Also known as internal customers,the correct feedback given by peers can help to find employees‘ abilities towork in a team, co-operation and sensitivity towards others.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISL Self assessment is an indispensable part of 360 degree appraisals andtherefore 360 degree Performance appraisal have high employee involvementand also have the strongest impact on behavior and performance. It provides a"360-degree review" of the employees‘ performance and is considered to be oneof the most credible performance appraisal methods. The aim is to find the gap between one‘s own appraisal and theperceptions of others. This will in turn enable a professional to analyze hisstrengths and shortcomings and accordingly improve his performance. While itis true that the system serves as an excellent process since it reduces biases, it isnot always successful. It is necessary to create the right culture in the companybefore introducing the system. If many people are unhappy or their morale islow, the situation can turn disastrous as some staffers will become obvioustargets. 360 degree appraisal is also a powerful developmental tool becausewhen conducted at regular intervals (say yearly) it helps to keep a track of thechanges others‘ perceptions about the employees. A 360 degree appraisal isgenerally found more suitable for the managers as it helps to assess theirleadership and managing styles. This technique is being effectively used acrossthe globe for performance appraisals.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLSome of the Organizations using 360 Degree Performance Appraisal are:Wipro,Infosys,Reliance IndustriesMaruti Udyog etc.HCLTechnologies.Wyeth Consumer Health (WCH)

WHAT IS 360 DEGREE PERFORMANCE APPRAISAL?

360 Degree performance Appraisal is the most comprehensiveappraisal where the feedback about the employee‘s performance comes from allthe sources that come in contact with the employee on his job. For e.g.: peers,colleagues‘, supervisors, subordinates, and clients etc, including the employeehimself. Such appraisal can provide valuable information regarding the ―on-the-job‖ performance of the employee. The employees receiving feedback gets rated by 360 raters. It involvesappraisal by those above, below, and to the side of an individual employee, aswell as self assessment in practice. The half yearly or yearly report of workschedule goes from company to their headquarter of all the workers where theirperformance is appraised. It contains all demotion, promotion, and otheractivities related to the performance.T.Y.B.M.S


360 DEGREE FEEDBACK

INTRODUCTION

360 feedbacks is simply a process for employees, management and customersto receive…advicereactionscommentsopinionsresponsescriticismsviewspointers…from each other about the efficiency of their professional development. Thusthe term 360 degree feedback, meaning a circle of those co-workers, managersand customers around you.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLIt is common for employees to be appraised by just one person, a manager orboss. What if this appraisal process can be improved by gaining feedback frompeople that work around the employee as well? This would give a fairer andmore accurate view of an employee.360-degree feedback occurs when feedback is obtained from sources all aroundan employee.These sources may include: management; co-workers; clients; self assessment.The system can include feedback from all of these groups, and from multiplepeople from each of the groups. If you do not want to include all the groups inthe appraisal process, our system will automatically adjust for this. A commonexample might be that employee (a) will be appraised by two managers, six co-workers, zero clients and will perform a self assessment.WHAT IS 360-DEGREE FEEDBACK? It is a process whereby an individual is rated on their performanceby people who know something about their work. This can include directreports, peers, managers, customers or clients; in fact anybody who is credibleto the individual and is familiar with their work can be included in the feedbackprocess. The individual usually completes a self-assessment exercise on theirperformance, which is also used in the process.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISL360-DEGREE FEEDBACK DEFINITION -ACCORDING TO: TERRILINMAN ―360-degree feedback is an evaluation method that incorporatesfeedback from the worker, his/her peers, superiors, subordinates, andcustomers. Results of these confidential surveys are tabulated and shared withthe worker, usually by a manager. Interpretation of the results, trends andthemes are discussed as part of the feedback. The primary reason to use this fullcircle of confidential reviews is to provide the worker with information abouthis/her performance from multiple perspectives. From this feedback, the workeris able to set goals for self-development which will advance their career andbenefit the organization. With 360-degree feedback, the worker is central to theevaluation process and the ultimate goal is to improve individual performancewithin the organization. Under ideal circumstances, 360-degree feedback isused as an assessment for personal development rather than evaluation‖.T.Y.B.M.S


360 DEGREE FEEDBACK SYSTEM

A 360 degree feedback system is designed to develop and discoverand employee‘s level of skill, how capable and knowledgeable employee is andlook for ways to improve how employee does their job. A performance evaluation appraisal and a 360 degree feedback havedifferent functions. Research shows that 360 feedbacks when used incorrectlycause poor performance. It breeds employee mistrust and as stated before,increases the organizations risk of legal hot water. Employee compensation decisions have historically been associatedwith performance appraisals. In my organization (Local Government) there is aculture of skepticism of management at best. 360 degree appraisals involve evaluating supervisors and managers aswell employees. This could be a positive for anyone who works for a localgovernment. However, because of the secrecy involved in who does therating…secrecy, government. When 360 reviews are merged with compensation decisions (360 degreeperformance appraisal), employees will begin to doubt the advantages of 360degree feedback. When workers perceive that people around them are decidingtheir financial rewards and promotional opportunities, mistrust may set in.Some employee and manager raters may have trouble separating personal biasand dislikes from an honest assessment of a coworker. Multiple source ratersare not very good at giving unbiased feedback. For performance appraisalpurposes, co-workers are bad at figuring out 360 feedbacks that influencespromotions and the size of the paychecks.T.Y.B.M.S


SOME DIFFERENCES BETWEEN A 360 DEGREE

FEEDBACK AND A PERFORMANCE APPRAISAL

An effective performance appraisal is basically done between theemployee and however she reports to. The employee does not come to aperformance appraisal to find out how much she met co-worker, subordinate orcustomer expectations. When the manager calls her into the office for a performance appraisalmeeting the focus is on the actual performance of her job between the lastreview and the current one. There are different expectations in a 360 degreefeedback. 360 degree evaluations involve how those around you perceive yourlevel of…skillpractice (the way you apply yourself to the task)competency(know-how)behavior (actions or deeds) Each of these areas is then measured to determine where improvement isneeded. Thus a 360 degree evaluation is used for ongoing personal andprofessional development. A traditional staff performance appraisal highlights aset of tasks performed satisfactorily in a specific period of time. There are other differences between a performance appraisal and 360degree feedback.Typical performance appraisal methods involve the following…pay increases or decreasesmerit raisespromotionsdemotionsseparations or transfersguidelines to calculate effective progress in training and decisionsT.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISL A 360 degree feedback system by design should not deal with employeecompensation. Compensation decisions are one of the areas of controversy involving themerger of 360 degree feedback and performance appraisal in evaluating jobreviews. The need for growth in team and personal levels of performance have beenthe driving force toward blending appraisal of performance and a 360 degreefeedbacksystem. A standard procedure of 360 appraisal involves providing a survey foremployees to rate each other and managers. These surveys are typically of aconfidential nature. This gives employees the confidence to give commentswithout fear of retaliation. However there is research that points to dangers in360degreeevaluations. These 360 degree feedback surveys have managers and employees who areselected as raters. What does rater mean? They are fellow employees ormanagers who are selected to evaluate us. This is viewed as a more fair processbecause the appraisals of employee performance are conducted by multiplesourcesversusonemanagerwhomaybebiased. Research shows mixing 360 degree feedback and job performance appraisalscan expose a company to more employee lawsuits. This is because those ratingan employee must be careful not to violate the Civil Rights Act or EqualEmployment Opportunity Commission (EEOC) guidelines. The info gatheredfrom all raters is then given to the employee by someone designated bymanagement.T.Y.B.M.S


NEED OF 360-DEGREE FEEDBACK IN ORGANIZATIONS

Business is towards surplus generation. Without surplus no organization cangrow. Here the effort to grow the business and the surplus should come fromemployee part. The performance of the employees is at work here matters inbusiness development and organizational development. The performance of theemployees should then align with the strategic decisions that integrate thebusiness goals in an increasingly competitive environment. It is theresponsibility of the Human Resource Management to integrate the culture ofthe organization with all available resources to the optimum out put. The 360 0Appraisal helps the HR Department to have better understanding of thecompetitive advantage and disadvantages of the current manpower resourcesand tune them towards performance excellence and productivity.PREREQUISITES* Top Management Support* Confidence of employees on the appraisal methodology* Objectives need to be measurable with performance requirementsclearly stated.* A detailed plan of implementation* Collaboration between superior and subordinates* some prior experimentation and positive experiences Clearorganizational philosophy and policy objectivesUSES FOR 360 DEGREE FEEDBACK INCLUDE:Performance Appraisalo Recognition of performance.o Providing feedback on individual performance.o Providing a basis for self-evaluation.Assessing Employee Development:o Diagnosing training and career development needs.o Providing a basis for promotion, dismissal, job enrichment, jobenlargement, job transfer, probation, etc.o Monetary and other rewards.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLOrganizational Climate Study:o Organizational environment improvement needso Changes in the Managerial approaches, leadership, etcCustomer Satisfaction Studyo Employees attitudinal changeo Customer satisfaction improvementsT.Y.B.M.S


HOW IT IS CONDUCTED.

(1.) Develop questionnaire: A questionnaire used for 360 PerformanceAppraisal typically contains items that are rated on a 5 point scale. These itemsmay be developed to measure different dimensions of job performance (e.g.,communication, teamwork, leadership, initiative, judgment). Questionnairesalso typically include one or more open-ended questions to solicit writtenfeedback.Questionnaires typically include from 50 to 100 items. When estimating theamount of time to complete the questionnaire they should estimate about 1minute per questionnaire item.If using a printed questionnaire form, they should consider using forms that canbe scanned into a computer.(2.) Ensure confidentiality of participants Steps must be taken to ensure theconfidentiality of the feedback results. For example, feedback ratings fromseveral subordinates may be combined (averaged) to mask the identity of anindividual subordinate. The confidentiality helps ensure that the results aregenuine.(3.) Provide training/orientation often the feedback process involves use of oneor more questionnaires, confidential information, and involvement from manydifferent areas of an organization. Therefore, training and orientation to thefeedback process is needed to facilitate a smooth feedback process. During thistraining/orientation, employees should be informed of what 360 PerformanceAppraisal is and why it is being implemented at the organization. They maywant to provide samples of the questionnaire items and/or feedback results.(4.) Administer the feedback questionnaire Distribute questionnaire forms (ifusing printed copies) with instructions. May want to prepare answers tocommon questions if other employees will be assisting in the administration. Ifpossible, post the questions and answers to their web site for easy access.It is important to monitor the progress through the system in order to contactemployees who need to complete forms.(5.) Analyze the data Basic data analysis would include averages of ratings.More complicated analyses may include item-analysis and/or factor-analysis.Types of analyses include: Performance Dimension Summary; Summary-T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISLPerformance vs. Expected; Individual Item Ratings; Item Ratings-Performancevs. Expected (formed); Highest- or Lowest-Rated Items (shows individual'sstrengths and weaknesses); Group & Organizational Ranking, andRecommendations for Development. They may want to analyze the data by organizational division or department toassess group and organizational strengths and weaknesses. This can be used tosupport or promote training and organizational development.(6.) Develop and Distribute Results Feedback results should be shared with theemployee. It should not be mandatory that the employee share the results withtheir supervisor. However, they may want to make this an optional part of theperformance review of the employee.Most results for an employee will include a comparison of their ratings to theratings of their supervisor and average of the ratings from others (peers,customers...). The comparisons may be in the form of numbers or simple barcharts.They may want to provide individual review sessions or group workshopsconducted by a facilitator to help individuals review and understand the resultsand develop appropriate goals and objectives.DimensionsResponses are collected for items that fall under a specific dimension of jobperformance. A single questionnaire may contain dozens of questions thatmeasure responses on one or more dimensions.Example of dimensions are shown below.• Problem Solving Items under this dimension measure how well a person canunderstand information and options, give appropriate considerations toinformation, make correct decisions, analyze and interpret information, andreact to changing situations.• Planning and Organizing Items under this dimension measure a person'sability to develop plans and objectives, develop long-term solutions, setbusiness objectives adhere to schedules.T.Y.B.M.S

360 DEGREE PERFORMANCE APPRAISL• Communication Items under this dimension measure the ability to presentinformation formally and informally in both written and orally. Also measuresthe ability to communicate with customers, staff, peers and supervisors.• Supervisory Skills Measures the individual's skill level in planning, organizingand overseeing the work of subordinates. Also measures a person's ability tomanage work flow efficiently.• Administrative Skills Measures an individual's ability to implement andmonitor actions to ensure compliance with policies and regulations. Also helpsidentify the ability to distribute information, allocate staff and maintain recordsor documents.• Business Control Measure the skill in, and concern for, controlling expenses,reducing costs, setting performance standards and reviewing budgets.• Manager Potential Index A measure of the composite score of the scalesreflecting an individual\'s overall ability to successfully perform managementtasks.T.Y.B.M.S


HOW 360-DEGREE FEEDBACK SYSTEM ADDS VALUE?

360 degree feedback enables an organization to focus on developmental efforts,at the individual and group level, in the present business environment where thesuccess of the company depends on continuous revolution, which is possiblethrough organizational development. 360-degree feedback facilitates thealignment of individual capabilities and behaviors with organizationalstrategies. It adds value to the organization indifferent ways:-o

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360-degree feedback provides a better understanding of individualsperformance at work360-degree feedback provides a multifaceted view about theemployees from different sources360-degree feedback provides a better understanding of employeddevelopmental needs360-degree feedback provides increased the understanding aboutone's role expectations.360-degree feedback provides increased the understanding ofcompetence and competency in various roles360-degree feedback extends better morale to those who performand contribute well to the organization360-degree feedback reduces training costs by identifying commondevelopment needs.360-degree feedback increases the team's ability to contribute tothe organizations goals360-degree feedback helps everyone to work for a commonstandard and institutionalize performance management.360-degree feedback ensure better interpersonal relationship and

group cohesivenessIt promotes self-directed learning and provides a road map foremployee's development planning.It promotes better Communication within departments.360-degree feedback Increases the team's ability to contribute tothe organizations goals develop better bottom line throughboosting the capability of the organization to meet its objectives.T.Y.B.M.SPage 22


360 DEGREE FEEDBACK BENEFITS

Employees should be aware of what 360 degree feedback benefits could meanfor them. The benefits centre on improving managerial performance which hasbeen demonstrated to have a substantial impact on productivity andprofitability. Evaluations typically achieve 90% agreement rates that the resultsare useful.The benefits apply at several levels:Self-insight and learning. 360-degree feedback provides the opportunityto see ourselves as others see us. This is the first step to help identifystrengths in one's management style that can be built on and areas ofweakness that can be redressed.Focuses career development Discussions around feedback, strengths anddevelopment areas are also useful for sharpening ideas about the futureand potential career directions.Hard data. 360-feedback data provides quantifiable data on a range ofleadership and personal capabilities, enabling comparisons to be made,both within and between managers.Motivational. A programme of 360-degree feedback can have a positivemotivational effect on managers. The managers feel they are beinglistened to as individuals and that they are receiving support in theirdevelopment and dealing with problems. Team members can similarlyexperience positive motivation if they too feel they are being listened to,and positive changes that affect their working lives follow.Culture change Introducing feedback can subtly change the culture. Anatmosphere of open and honest feedback means decision making can bemore rigorous. Unsatisfactory behaviour can be identified and addressedrather than swept under the carpet.Competency approach. The use of competencies to define themanagerial behaviours valued in an organization helps integraterecruitment, leadership development and performance appraisal into acoherent framework.Broader perspective. Performance management becomes more rounded,taking a broader set of perspectives than just the manager.T.Y.B.M.SPage 23


THE 360 DEGREE PROCESS

(1.) Self-assessmentSelf-assessment encourages the individual to take responsibility for his or herown development and is a useful starting point in the 360-degree feedbackprocess. Consideration needs to be given to the purpose of this information andhow it is used as well as who has access to this data and how long is it held for.(2.) The raters Identifying the most appropriate people to rate the performance of theindividual is a key part of the process. Ideally the recipient will have fullinvolvement in identifying who they think is in the best position to comment ontheir performance. The raters must be credible to the recipient for them to act onthe resulting feedback.Number of raters The assessment has to be based on a large enough sample to ensure that it isvalid. If too small, there is a danger that one rater‘s view will have a majorimpact on the overall results. 7 to 12 respondents are usually sufficient in termsof reliability.(3.) The questionnaireThe design of the assessment, reporting and feedback process should suit thepurpose of the exercise. It needs to describe the behaviours, which relate toactual job performance. It should relate to existing measurement systems withintheir area, such as competencies. It also needs to be in line with City‘s cultureand values.T.Y.B.M.SPage 24

360 DEGREE PERFORMANCE APPRAISL The questionnaire needs to be relevant to the raters and their day-to-dayinvolvement with the individual. A well-designed questionnaire should offerrespondents the opportunity to indicate where they have not had the opportunityto observe behaviour, or where the behaviour is not relevant to the job, so as notto force them to guess. Ideally the questionnaire should take between 15 and 30minutes to complete.Qualitative and quantitative data The most effective questionnaire design is one that encompasses bothquantitative as well as qualitative elements. The quantitative elements providethe structure and the qualitative questions provide the context.(4.) Feedback strategy It is important to consider what feedback is communicated and howand when this takes place.Feedback report Feedback usually consists of a report. The design of the report shouldbe kept simple and ideally designed to help the individual priorities theirrelative strengths and development areas Given that an individual is receivingsensitive information about how their colleagues, direct reports and managerview their performance, sensitivity is essential. Someone must be available tohelpinterprettheresultswiththatperson..Trained facilitators As 360-degree feedback is being used as part of the appraisal process,feedback is communicated face to face. The people giving the feedback(appraisers) must have had the relevant training to give them the skills tosupport this process.T.Y.B.M.SPage 25

360 DEGREE PERFORMANCE APPRAISLWhen feedback is communicated Ideally the individual receives feedback as soon as possible after thatfeedback has been collated. It is important to ensure that people receive it whenthere is support available to interpret the results e.g. as part of a supportiveappraisal process.T.Y.B.M.SPage 26

360 DEGREE PERFORMANCE APPRAISL360 Feedback- For Appraisal Or Employee Development?In terms of communication management and performance feedback in the workplace, the 360

degree feedback methodology is becoming an increasingly common way of developing

employees, appraising their performance or in some companies; a combination of the two.

The concept behind 360 degree feedback, including its pros and cons; stating that it can be

defined as a ―contrived method of providing a flow of feedback to employees from all

directions‖.

However a key point standpoint is the discussion of conflicting views on whether 360 degree

feedback should be used primarily for employee development or performance appraisal. The

purpose of 360 degree feedback arguably creates a huge impact on the overall effectiveness

of the feedback to initiate positive change in employee performance as it has the potential to,

for example, influence what motivates the employee and what they hope to gain from the

feedback process itself.

T.Y.B.M.SPage 27

360 DEGREE PERFORMANCE APPRAISLFor instance, provision of feedback for development purposes will ensure the employee is

seeking accurate feedback from their manager and/or other raters in order to improve their

performance. This means they will be more open and receptive to the dialogue about their

performance. However, when the feedback is evaluative in nature, provided for a

performance appraisal for example, the employee desires to appear competent and attractive

in order to be scored as highly as possible, particularly if this rating is linked to a financial

reward or bonus. This then significantly reduces their willingness to be receptive to the

feedback provided and make the necessary changes to improve performance.

Moreover, when 360-degree feedback is used for purposes other than development such as

performance appraisal, the effectiveness (or perceived accuracy) of the feedback received,

arguably diminishes. For instance O‘Reilly (1994) asserts that when 360 degree performance

feedback is provided by raters for the purposes of development, the feedback is ―remarkably

similar‖. However when this feedback is gathered and used for more formal evaluative

purposes, the scores and feedback are different as friends pump up each others scores and

mark competitors as mediocre.

34 per cent of respondents in their study would rate their manager differently if the feedback

was used for a performance appraisal as opposed to developmental purposes and both raters

and those being rated are less fearful and more likely to be honest if they know results will be

used for personal development purposes. In the same way it may encourage gamesmanship

and ‗behind-the-scenes‘ deals.

I found this article really interesting- but at the same time- it all makes so much sense. It will

really make good business sense to consider first WHY you are doing 360 degree feedback-

is it for developmental or evaluative purposes- and what is the outcome you need.

T.Y.B.M.SPage 28


ADVANTAGES OF 360 DEGREE APPRAISALSo

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Provides a more comprehensive view of employee performance. Increases credibility of performance appraisal.Feedback from peers enhances employee self-development.Increases accountability of employees to their customers.The combination of opinions can approximate to an ‗accurate‘viewComments expressed by several colleagues tend to carry weightSome skills are best judged by peers and staff, not by manageraloneFeedback may be motivating for people who undervaluethemselvesThe wider involvement help to engender a more honestorganizational culture

DISADVANTAGES OF 360 DEGREE APPRAISALSo

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Time consuming and more administratively complex.Extensive giving and receiving feedback can be intimidating tosome employees.Requires training and significant change effort to work effectively.Results can be difficult to interpretFeedback can be damaging unless handled carefully andsensitivelyCan generate an environment of suspicion if not managed openly

and honestly The 360-degree appraisal significantly differs from the traditionalsupervisor-subordinate performance evaluation. Rather than having asingle person play judge, a 360-degree appraisal acts more like a jury.The people who actually deal with the employee each day create a poolof information and perspectives on which the supervisor may act. Thisgroup of individuals is made up of both internal and external customers.T.Y.B.M.SPage 29

360 DEGREE PERFORMANCE APPRAISL Using 360-degree appraisals provides a broader view of theemployee‘s performance. The most obvious benefit of the 360-degreeappraisal is its ability to corral a range of customer feedback. Becauseeach customer offers a new, unique view, it produces a more completepicture of an employee‘s performance. Unlike with supervisors,employees can‘t hide as easily in 360-degree appraisals because peersknow their behaviors best and insist on giving more valid ratings. Inaddition to providing broader perspectives, the 360-degree appraisalfacilitates greater employee self-development. It enables an employee tocompare his or her own perceptions with the perception of others on theemployee‘s skills, styles, and performance.T.Y.B.M.SPage 30


RISK OF 360 DEGREE PERFORMANCE APPRAISAL

Appraisal of performance is not the same as an assessment of 360 feedbacks.Here are some of the risks of 360 degree feedback appraisals.Discrimination from Raters They can distort the peer performance appraisal information to help or harm the employee being rated.Mistrust of the 360 degree performance appraisal system If a business or organization already has a culture of suspicion and mistrust of management by the employees, a 360 degree evaluation feedback will not work.Employee perception of rating Employees receiving negative performance appraisal comments will focus blame on the co-workers and supervisors who are the raters. Raters are normally selected anonymously so the employee doesn‘t know exactly who is evaluating them and did not give them a good rating of performance and appraisal.T.Y.B.M.SPage 31


THE PROBLEM WITH 360 FEEDBACK

This is a good challenge to using 360 Degree Feedback as a means ofcommunication in an organization. I would respond as follows:Face-to-face communication, with immediate and relevant feedback is ofcourse the best way to manage individuals and teams. 360 DegreeFeedback should never be used as a substitute for this, or as a way ofavoiding difficult conversations.360 Degree Feedback is part of a wider set of activities that helps peopleto understand their own skills and how they can grow as managers orleaders in their organization. That‘s why generic 360s are less useful thatthose that are customized and aligned with the organization‘s goals. Even in organizations with good face-to-face feedback, we find thatindividuals who receive 360 Degree feedback are often surprised at theperceptions of others about them, and that this can lead to an increasedawareness of their day to day behaviours and their impact on otherpeople. And in an ideal world, of course I should tell my boss when I‘m nothappy that she chews me out in front of the rest of the team…and sheshould accept that feedback directly from me and without anyreprecussions, but we know that‘s not always the case. And maybe myboss needs to understand that a number of other people might feel thatway? 360 is a great way of getting that message across. Used correctlyand in the right situations, 360 Degree Feedback is a very powerful toolfor development; please don‘t throw the 360 Degree Feedback baby outwith the bathwater!TRACK: THE RIGHT TRAINING, FOR THE RIGHT PEOPLE, AT THERIGHT TIMET.Y.B.M.SPage 32


DOES 360-DEGREE FEEDBACK NEGATIVELY AFFECT

COMPANY PERFORMANCE? STUDIES SHOW THAT 360-

DEGREE FEEDBACK MAY DO MORE HARM THAN GOOD.

WHAT'STHEPROBLEM?-PERFORMANCE

MANAGEMENT - STATISTICAL DATA INCLUDED

"If we practiced medicine like we practice management--based on hunch,intuition and ideology--we would have much more malpractice and a lot ofmortality and morbidity."Those are tough words from Dr. Jeffrey C. Pfeiffer, professor of organizationalbehavior at Stanford University and a leader in management thinking, but theyare on the mark. Too many organizations base their human resourcesinvestment decisions on tradition, fads or competitors' practices, instead of onsound financial measures.A perfect example of this phenomenon may be 360-degree feedback. Adoptedby a growing number of organizations, 360-degree feedback is widely acceptedas an effective performance management tool.However, new research shows that 360-degree feedback programs may hurtmore than they help. Watson Wyatt's 2001 Human Capital Index (HCI), anongoing study of the linkages between specific HR practices and shareholdervalue at 750 large, publicly traded companies, found that 360-degree feedbackprograms were associated with a 10.6 percent decrease in shareholder value.That doesn't necessarily mean 360-degree feedback programs should beabandoned. But it does mean organizations should take a second look at theirperformance management programs to see if they are accomplishing what theyare supposed to.Popularity of 360-Degree Feedback360-degree feedback is a performance appraisal approach uses input from anemployee's supervisors, colleagues, subordinates--and, sometimes, evensuppliers and customers. Most 360-degree feedback programs focus on themanager level and above.T.Y.B.M.SPage 33

360 DEGREE PERFORMANCE APPRAISLThe use of 360-degree feedback has grown dramatically in recent years.According to HR consulting firm William M. Mercer, 40 percent of companiesused 360-degree feedback in 1995; b 2000, this figure jumped to 65 percent.The premise behind 360-degree feedback is logical: The people who work mostclosely with an employee see that person's behavior in settings andcircumstances that a supervisor may not. And, in theory, the more complete theinsight into an employee's performance, the more likely he will understand whatneeds to be improved and how.The theory is very promising. The reality, on the other hand, is another matter.Watson Wyatt's 2001 HCI report revealed that companies using 360-degreefeedback have lower market value. According to the study, companies that usepeer review have a market value that is 4.9 percent lower than similarly situatedcompanies that don't use peer review. Likewise, companies that allowemployees to evaluate their managers are valued 5.7 percent lower than similarfirms that don't.Taken together, these practices are associated with a 10.6 percent decline inshareholder value.Voices of DoubtThe HCI study is not the only indicator that 360-degree feedback programs maybe failing to match their promise. Researchers and formerly strong advocates of360-degree feedback have begun to raise questions. Jai Ghorpade, a professorof management at San Diego State University, wrote in the Academy ofManagement Executive that, "while it delivers valuable feedback, the 360-degree concept has serious problems relating to privacy, validity andeffectiveness."Ghorpade also reported that out of more than 600 feedback studies, one-thirdfound improvements in performance, one-third reported decreases inperformance and the rest reported no impact at all.John Sullivan, professor of human resource management at San Francisco StateUniversity, says "there is no data showing that [360-degree feedback] actuallyimproves productivity, increases retention, decreases grievances or is superiorto forced ranking and standard performance appraisal systems. It sounds good,but there is no proof it works."T.Y.B.M.SPage 34

360 DEGREE PERFORMANCE APPRAISLRoots of the ProblemWhy is 360-degree feedback failing to live up to its potential? For starters,giving effective appraisals is a difficult task. Unless everyone participating in a360-degree program is trained in the art of giving and receiving feedback, theprocess can lead to uncertainty and conflict among team members.Another issue is that there may be a gap between an organization's businessobjectives and what 360-degree feedback programs measure. Typical 360-degree feedback programs assess competencies that are not directly related tobusiness results or are so broad that they aren't relevant to the averageemployee.The time and cost associated with 360-degree feedback also are stumblingblocks. By trying to capture every nuance of a worker's performance, many360-degree feed-back programs have become so complex that they require amuch greater investment in time and money than they can return.Another common problem: Reviewers and those being reviewed fail to followup after feedback. When there are no consequences for poor performance--which often is the case with 360-degree reviews--performance won't change.Mend It, Don't End ItDespite these drawbacks, there are good reasons not to give up on 360-degreefeedback.The process still holds the potential to deepen employees' understanding of theirown performance. And, it may be able to help companies create value by betteraligning job performance with business strategy.The question is this: Can 360-degree feedback be implemented in such away that it achieves these benefits without negatively affecting thebottom line? Based on our analysis--and conversations with clients-- webelieve the following steps may help companies transform 360-degreefeedback into a value creator, not destroyer.* Implement 360-degree feedback for the right reasons. "The first thing youneed to ask is why you're doing it," says Paul Rudely, a New York-basedexecutive coach. If you can't articulate a strong business case for a 360-degreefeedback program, it should not be introduced.T.Y.B.M.SPage 35

360 DEGREE PERFORMANCE APPRAISLJeff Seretan, head of human resources for Barclay's Global Investors, based inSan Francisco, agrees. "You should not implement it unless you can show thatit is solving a problem or adding value," he says.Barclay's uses 360-degree feedback to provide senior executives with input ontheir management styles. "Our executives had minimal input into theirleadership styles, so our goal was to address these information gaps," Seretanexplains.* Assess the costs of the program. Employers must "assess the real burden theyare placing on the organization by doing 360-degree feedback," Seretan says."If you don't do it in a way that is targeted and strategic, you run the risk ofvalue destruction.* Focus on business goals and strategy. Feedback should provide employeeswith insight into the skills they must develop to help the organization meet itsgoals.* Do not rely solely on 360-degree feedback. Employees must receive regular,timely feedback about their day-today performance. "360-degree feedback isjust one part of our approach," Seretan says.Rudely likes to use 360-degree feedback as a baseline for a more in-depth lookat an individual's performance profile. "While I've yet to see a 360 that wasinaccurate, often they can stand to be fleshed out a bit," he says.He recalls one 360-degree feedback assessment that made an employee "looklike Mother Theresa." The woman was very talented, he says, "but nobodywalks on water like that. I conducted a series of personal interviews with thewoman's raters to follow-up. After the interviews, I had a much better view ofher strengths and weaknesses."Additional interviews won't always be necessary, but companies shouldconsider using them in situations where they can help clarify the results of 360feedback. Ultimately, the thing to remember is that 360 feedbacks is just onepart of an overall performance management system.* Get support at all levels of the organization. Make sure executives play a key,visible role. And, give line employees a voice in designing and implementingthe program to ensure relevance and ownership. A 360-degree feedbackprogram is doomed if HR is its only champion.T.Y.B.M.SPage 36

360 DEGREE PERFORMANCE APPRAISL* Train people in giving and receiving feedback. Companies that implement360-degree feedback without first checking and developing managers' feedbackskills risk serious damage to teamwork and morale. Providing constructivefeedback takes instruction, training and practice.While training individuals to give and receive feedback may temporarilyincrease the expense associated with 360-degree feedback programs, thegains will outweigh the higher costs as the feedback delivered toparticipants becomes more focused, targeting the behaviors most closelyassociated with value creation and destruction. Ultimately, the goalshould be to create a culture in which individuals feel comfortable givingand receiving feedback--both positive and negative--on a real--time basis,rather than waiting for an annual review.* Create an "action plan" for each employee based on the feedback. "Knowingwhat to do and not doing it doesn't get you very far," Pfeiffer says.Rudely recommends that individuals sit down with their managers and theirsubordinates and review scores. "They should present their scores and then ask,'Which ones do you think are the most critical to being as effective as possible,and what tactics are necessary to get there?"'Companies should identify and enforce rewards and consequences forindividuals related to their success in following their action plans. "If theprogram is just another add-or and not part of a scorecard, you're kiddingyourself," Rumely says.Monitor implementation, ask for ideas for improvement and make adjustments.Companies don't always get 360-degree feedback exactly right on the first try.By monitoring results, asking for feedback on the process and implementingchanges based on the answers, companies may be able to put 360-degreefeedback programs back on track.It also helps to continually benchmark results against the objective articulated atthe outset. "For us, the test is not whether we have a program in place, it'swhether we got the desired result," Seretan says.* Recognize that 360-degree feedback is not a panacea. Just because anindividual receives insight into his behavior doesn't mean he can--or will--change it. Traditional performance management systems have struggled withT.Y.B.M.SPage 37

360 DEGREE PERFORMANCE APPRAISLthis axiom for years, and it is naive to think that 360-degree feedback programswill be significantly different.Take Another LookThe findings about 360-degree feedback programs are eye-opening. The factthat they are associated with a decline in shareholder value should persuade HRmanagers to revisit their existing or planned 360-degree feedback programs.The existence of such data also should force companies to ask themselves whatthey hope to gain from 360 reviews--or, for that matter, from any HR initiativethey undertake. What is the potential return on investment (ROT)? How do ROIprojections compare to actual performance? And, if expectations haven't beenmet, what can be done to improve the effectiveness of these programs?Implementing a successful 360-degree feedback program is akin to managingyour own investment portfolio: You can come out ahead, but it takes work.Feedback Varies with Your Point of ViewBy Kenneth M. NowackMulti-rater feedback can raise more questions: How is an employee to react, forexample when his manager gives him negative ratings while feedback from hisdirect reports an peers is situation. Research suggests than disagreementbetween rate groups is common-and that the resulting confusion createschallenges for employee development.The strength of 360-degrees feedback is that it reflects him varying perspectivesof different rate groups. That's also part of the problem. What one group viewsas effective behavior, another group may see as problematic.And each rater group brings natural biases to the table. For example studiesconducted by Organizational Performance Dimensions find that supervisorfeedback tends to be based no bottom line results (are tasks completed on timeT.Y.B.M.SPage 38

360 DEGREE PERFORMANCE APPRAISLand well?) technical competence and whether an employee's behavior drawscomplains or clients.By contrast direct reports base their reviews on factors such as willingness toinvolve the direct report in decisions interest in a direct reports professionaldevelopment and trustworthinessPeers who lack perspective on their colleagues' day-to-day performance tend tofocus on leadership potential. Their remarks often reflect opinions or whetherthe participant has the "rights stuff" to motivate and create a compelling visionfor others to follow.None of these perspectives is wrong and all of these insights can be valuable increating a 360-degrees view of performance. However it's important that theperson being reviewed-and his supervisors-understand how the filters used bydifferent groups affect how they rate performance.Kenneth M. Nowack is a licensed psychologist and director of OrganizationalPerformance Dimensions, a Santa Monica Calif: based company specializing in360-degree-feedback.Focus on Why and HowJai GhorpadeIn evaluating the effect of 360-degree feedback--on any HR practice--on firmperformance we must ask why companies about it. For example in the 1930smany troubled companies adopted Joe Scanion's group incentive plan. As aresult a snapshot of companies using the Scanion Plan at that time would haveshown that the plan was associated with poor performing companies.Therefore, I suggest caution in interpreting the Watson Wyatt study. We nee toknow more about companies motivation for adopting 360-degree feedback aswell as their financial condition before and after adoption. Perhaps theresearchers can ferret out this information.Assuming there is some truth to the Watson Wyatt report. I would like to focuson a potential explanation provided by Plau and Key for why 360-degreefeedback is not living up to its advanced billing. The authors state that theremay be a gap between an organizations business objectives and what 360-degree feedback programs measure. I strongly emphasized this point in anT.Y.B.M.SPage 39

360 DEGREE PERFORMANCE APPRAISLarticle they cite, which appeared in the January 2000. Academy of ManagementExecutive.But I believe the problem goes beyond congruence with company objectives.Most companies using 360-degree feedback tent to employ generic off-the shelfinstruments that are of interest to psychologists but may not have muchrelevance to the organizational context in which they are being used. It is aquestion of the relevance of the behaviors and traits on the feedbackinstruments to specific interpersonal and cultural problems a specific companylaces are a specific time.Assuring context relevance is not easy and calls for a very different type ofcompetency on the part of the HR professionals and other who are helpingcompanies to use 360-degree feedback.T.Y.B.M.SPage 40


THE DANGERS OF USING 360 DEGREE FEEDBACK FOR

PERFORMANCE APPRAISAL- DAVID LASSITER

In a time of low unemployment and transient loyalty, knowledgeablemanagers are keenly aware of the need to motivate, develop, and retain qualitypeople. Research has clearly indicated that employee satisfaction is a keyingredient to loyalty and retention and is heavily influenced by feedback onperformance. Managers increasingly, and mistakenly, look to 360-degreeassessment as a quick and easy solution to the feedback dilemma.Trend: Inappropriate use of 360 degree feedback can unravel years ofenvironment building effort and huge investments of bottom line dollars. It isnot, however, the "silver bullet". There is a rising demand in organizations forimproved performance and results. American business during the 1970's and'80's was in serious trouble. In the 1990's, this situation provided the energy forfinding new approaches and processes to boost performance. In the newcentury, organizations in all sectors are challenged to operate even moreresponsively and efficiently. Raising individual and team performance levels iscentral to this process and 360 feedbacks have been increasingly used as part ofthe solution. Unfortunately, there is an advancing drift toward using 360feedbacks for performance appraisal. Organizations need to be careful here.Using 360 for appraisal may be an intriguing idea, but it's not the appropriateuse of this powerful new technology. Used for appraisal purposes, It can put theorganization at unnecessary risk and has a negative impact on motivation,performance, and the entire work environment.Tools With Different Purposes At its best, performance appraisal is an evaluative process used todetermine results. Its' purpose is to measure and evaluate contribution to theorganization in order to provide feedback, and fairly distribute rewards.Performance appraisal allows employees to more clearly see the results of theirefforts, the relationship between their job and the organization's performance,and be rewarded for their particular contribution. 360 feedbacks is a developmental tool. It is designed to encourageemployees to grow and develop by providing feedback on their proficiency inthe skills, competencies, behaviors, and practices related to the conduct of theirT.Y.B.M.SPage 41

360 DEGREE PERFORMANCE APPRAISLjobs. By design, it is good at identifying, measuring, and improving the skillsand competencies needed to perform successfully. It is especially good for thehard-to-quantify interpersonal areas (often labeled the 'soft skills') of behaviorsand practices. Examples of this include listening, informing, resolving conflict,coaching, teamwork, and leadership. Performance appraisal, on the other hand,is effective for measuring outcomes and results, what people are actually hiredfor and paid to produce. It is designed to clarify and document the goals,outcomes, milestones, time frames, and measurements to be used. Performanceappraisal and employee development are separate and distinct processes withdifferent purposes and different measurement tools. They can and docomplement each other. They are related, but they are distinct.Problems With The Linkage It is too often assumed that since multi-source is better than singlesource, automated is faster than manual, and evaluating performance (results) isthe same as measuring proficiencies (skills, competencies, etc.), then 360feedback is simply a more efficient and effective tool for conducting appraisals.Assumptions like these can get you in trouble. For developmental purposes,multi-source feedback does have more validity and leveraging ability thansingle source. It is broader and brings in multiple and more balancedperspectives. But inexperienced multi-source raters are generally not as adept atproviding balanced and objective feedback as the single source supervisors theymay be replacing. They can have enormous problems separating honestobservation from personal differences and biases. For appraisal purposes, co-workers are insufficiently qualified to give evaluative feedback that affects payand promotion. Because 360 feedbacks are usually automated or web-based, it haswhat marketing people call "sizzle". But is it appropriate to performanceappraisal because of its speed and ease? What is it that makes appraisal ordevelopment particularly effective? Research indicates that it is the quality ofthe conversation between the manager and the employee that is important.Being able to explore and discuss aspects of one's work with clarity and withoutthe usual time pressures is highly valued by most employees. It is the quality ofthe interaction, the essential performance conversation that provides motivationand builds trust and loyalty. Performance appraisal in most organizations is used to determinemerit increases and bonus amounts. However, if 360 feedbacks are linked tocompensation decisions, it loses its power and benefit as a developmental tool.When employees recognize that their financial rewards are based on multi-T.Y.B.M.SPage 42

360 DEGREE PERFORMANCE APPRAISLsource feedback ratings, they quickly see how the new game is played.Realizing what is required to achieve a good appraisal, employees canmanipulate the process to ensure the desired outcome. The 'rate' can be helpedor hurt. Putting two and two together, employees realize that "if you scratch myback, I'll scratch yours." Suspicions that were formerly directed at performanceappraisal are now focused on 360 feedback. The "new" system becomes tainted.Trust and honesty begin to break down in favor of getting a good review. As aresult, actual skill proficiencies can decline which, in turn, leads to a weakenedability to compete or deliver, and a performance environment of mediocrity.This can result in defensiveness, denial, conflict, accusations, and loss of trust.It puts the relationships within the work group in jeopardy and can lead to adecline in productivity and performance. Finally, organizations using 360 feedbacks as a performanceappraisal tool are exposing themselves to increased liability. 360 feedbacks isnot a tested or validated mechanism for performance appraisal. An organizationneeds to be prudent and consistent with the standard and proven performanceappraisal approaches.Potential Dangers Skill levels stay relatively flat or even decline because the "360 appraisal" isnot taken seriously.The numbers needed for a "good" appraisal can be informally fixed by silentagreement among raters. Maximizing the size of the increase or bonusovershadows the desire to elevate performance. Individual development plans become window dressing. People may gothrough the motions to create them but expend little effort in implementation.When not held accountable for this, performance levels off. If employees don't get a "good" appraisal, blame is placed on co-workerscausing a rise in the level of mistrust and apprehension. The work environmentbecomes politicized, candor and honesty are compromised, trust and integrityare damaged, risks are avoided, motivation diminishes, morale drops,performance declines, and turnover rises.T.Y.B.M.SPage 43

360 DEGREE PERFORMANCE APPRAISLThe Bottom Line Executives and managers considering the use of a 360-feedback tool forperformance appraisal need to be aware of the inherent differences betweenthem. The bottom line: Keep developmental feedback separate from appraisaland compensation decisions. Using 360 feedbacks for the wrong reason canresult in decreased trust, loyalty, and performance, and increased risk. Largeinvestments of time, money, and credibility will be lost.T.Y.B.M.SPage 44


How To Avoid The Dangers Of Using 360 Feedback In

Performance Management - By Dennis E. Coates

This early form of multi-source (360) feedback was practically unknown inbusiness organizations thirty years ago. 360 did not become popular until thelate 1980s, and then mostly as an executive development tool. Today, it hasbeen introduced into most Fortune 1000 companies, and its use is spreading. Itis now affordable enough to use with all employees, and it's also flexibleenough to use in a variety of applications, such as team development, customerfeedback and organization climate surveys.

Senior managers are intensely interested in this application, becauseperformance appraisal has been a perennially frustrating area of human resourcemanagement. On the one hand, managers need ways to let people know howthey are doing and to document individual achievements and problems. On theother hand, few organizations have set up appraisal systems that do this withoutcreating discontent, distrust, loss of productivity and law suits.The new 360 feedback technology is viewed by many as an intriguing solutionto the problems with traditional performance appraisal. With ratings comingfrom many sources, evaluations can have greater validity. With on-line inputsystems, people can give ratings and comments quickly and conveniently. Thedesire to use 360 technologies for performance management is strong, eventhough a pattern of real-world successes and best practices has not beenestablished.Most managers don't understand the risks of using 360 feedbacks as a platformfor performance management. Furthermore, they aren't aware that this conceptis a major controversy among HR practitioners. . 360 evolved over two decadesas a developmental feedback process, not as a performance appraisal process.Experts agree that computerizing an appraisal system will not correct itsinherent problems. While multi-source judgments are usually superior tosingle-source judgments, experience has shown that linking competence data topay and personnel decisions introduces unacceptable biases into ratings, therebyrendering the assessment system invalid.Still, many organizations are boldly going into uncharted territory, encouragedby authors who suggest that with the right technology and know-how, they canT.Y.B.M.SPage 45

360 DEGREE PERFORMANCE APPRAISLwork around the issues. Computer programs that facilitate 360-based appraisalhave appeared positioned to capitalize on an expressed need in the market. Atthe same time, most experts and organizations are backing away from thisapplication.Why? Are the dangers real? Is 360-supported performance management toogood to be true? Can it be achieved with the right know-how? In the end, willthe judgment of bold executives prove to be superior to the cautiousness ofhuman resource professionals?Using 360 feedbacks in the context of performance management involvessignificant risks that no prudent manager should underestimate. It's as if a dark,mysterious territory separates managers from the promised land of high-techappraisal. But approaching this territory is like visiting a great city. Thepayoffs are there, but part of the journey is knowing where not to go and whatnot to do. Guides promise to lead the way, but a prudent traveler should makesome preliminary inquiries. What's involved in this path? What are theoptions? What are the risks? What are the costs? How to minimize risks andobtain the maximum benefit when using individual 360 feedback in the contextof performance management. The prudent path has three guideposts: (1) Linkcompetence feedback to development decisions, (2) Link results feedback topay and other personnel decisions, and (3) Maintain confidentiality.

Guidepost 1: Link competence feedback to development:

Using 360 successfully in performance management requires a clearunderstanding of what is meant by "performance." The word performance refers to results what gets accomplished. Haveindividuals, teams and organizations achieved their goals? Are standards beingmet? Are projects completed on time? Are products and services delightingcustomers? Have business goals been achieved?The word performance also means something else: competence how wellpeople do their work. Are people knowledgeable and skilled? How effectivelydo they use their skills? How well do employees interact with each other?How do people treat their customers? Are procedures effective? How is thework getting done?T.Y.B.M.SPage 46

360 DEGREE PERFORMANCE APPRAISLManaging performance means managing both results and competence. Bothaspects can be measured, but they should be measured differently andseparately.Measuring competence as the first step to self-improvement is the best use of360 feedbacks. In this role, there are no concerns about using the results to putsomeone's career or compensation in jeopardy.It's important to keep in mind that 360 feedbacks is not the best tool formeasuring competence that is already easily quantified/measured. Thisincludes most technical areas. For example, why would you ask for severalpeople's opinions about someone's typing ability, when all you have to do isconduct a five-minute performance test?However, many key workplace skills and activities are exceedingly difficult toquantify and measure. These encompass mostly the interpersonal dimension ofwork:communication, team interaction, leadership, customer service,consulting, sales, negotiation, presentation, instruction and facilitation. Becausemulti-source feedback uses scaled ratings from a variety of sources onresearched areas of performance, its able to compile remarkably objectiveperformance data, and modern 360 administration software programs makedoing so a relatively simple, cost-effective procedure.Guidepost 2: Link results feedback to pay and other personnel decisions.There's nothing wrong with linking feedback to personnel and pay decisions,provided that the feedback is about results. People should be held accountablefor results and rewarded for achieving them. But in a desire to "pay forperformance," organizations sometimes mistakenly focus on the competenceaspect, rather than the results aspect of performance. They make this errorbecause of a failure to appreciate the distinction between competence andresults, and because 360 feedback makes it easier to gather competence datathan results data.The magnitude of the error has to do with the fact that it's enormouslyexpensive to administer compensation programs. If the rewards don't have thedesired impact on results, this huge investment is largely misdirected.However, executives have learned that rewarding only business results can haveunintended negative consequences.T.Y.B.M.SPage 47

360 DEGREE PERFORMANCE APPRAISLRewarding results is a simple concept, but the challenge is to set the right goals,which is the responsibility of senior managers. Leaders must be wise enough todefine outcomes that actually help an organization achieve its vision. Someorganizations overemphasize financial objectives, not appreciating that if theydon't also focus on employees and customers, the desired financial results willeventually falter.The key is to know which outcomes will contribute most to the organization'ssuccess, measure them and reward their achievement. It's better to focus onmajor results rather than on a comprehensive list. And it's important to specifyend outcomes, not in-process milestones. Furthermore, desired outcomesusually involve a team effort. Therefore, team goals and team rewards are oftenmore appropriate than individual ones.Most business goals are easily quantified, and effective methods formeasurement already exist. In this case, 360 assessment systems will not beneeded; it wouldn't make sense to ask for opinions about on-time deliveries,improved quality, reduced waste, safety, sales, new accounts, market share,project phases completed, profit, return on investment, etc., because effectivesystems already exist to compile and track this information.However, some key results are hard to quantify. For example, how would youmeasure whether a leader was taking care that creates desired businessoutcomes? How do your customers feel about the way you treat them? Can befind out by using customized customer satisfaction surveys. How do teammembers feel about working in their group? You can find out using teamclimate surveys. Some 360 software programs are flexible enough toadminister customized climate surveys, although it's important to keep thesesurveys separate from individual development assessments. Using the results ofa baseline survey of carefully chosen leadership outcomes (such as levels oftrust, loyalty, commitment, cooperation, professional satisfaction, development,etc.), specific results goals tied to leadership, communication, relationships andteam development can be agreed upon.T.Y.B.M.SPage 48

360 DEGREE PERFORMANCE APPRAISLTo illustrate, the following items may be included in a team climate survey: - The work of our group helps fulfill the organization's vision and values. - The activities of my unit are well planned. - The people who work around me show concern for our customers. - My colleagues encourage each other when work is challenging. - I feel empowered to do my best work. - Adequate resources are available to achieve my goals. - I work in a safe environment. - I trust my boss. - I have the freedom of action I need to do my job.Wise leaders understand that in a busy workplace, people focus on specificresults only if there is a significant benefit for doing so. People may have the"know-how," but they also need the "want-to."Unlike praise, salary increases and bonuses have the power to help employeescare for elderly parents or put their children through college. Successfulorganizations have learned to define what they need from people, empowerthem and hold them responsible for results. When these payoffs are achieved,the people responsible are rewarded financially.Guidepost 3: Maintain confidentiality.Confidentiality safeguards and the perception of confidentiality are essential tothe validity of the information gathered. The most important way to protectconfidentiality is to limit the feedback that managers see. Coworkers may wantto give a person honest feedback, because they know that if the individualdoesn't face up to the truth, changes in behavior are unlikely. On the otherhand, coworkers don't want their ratings and comments to be seen by managerswho make personnel and pay decisions. They don't want to be responsible fordrastic career consequences. In short, they may want an individual to havespecific developmental feedback but only the individual and only fordevelopment.T.Y.B.M.SPage 49

360 DEGREE PERFORMANCE APPRAISLAssurances of confidentiality are based on trust, and this trust must be earned.People may believe their managers when they are told that 360 inormation willbe safeguarded and used for development only. But if they discover that theywere misled, trust will be lost immediately and in most cases can never berestored. This consequence would render a 360 system useless as adevelopment tool. Eg:1 One division of a large communications company began using 360feedbacks for team development. When faced with the need to "downsize,"managers concluded that the 360 performance data would help them decidewho to keep and who to let go. When employees discovered what washappening, they raised such a furor that the company had to abandon the use of360 altogether. Eg:2 A regional bank experimented with using 360 feedbacks for managementdevelopment. But the organizational climate was characterized by low trust andinternal politics, and many people feared that the data would be used forpersonnel and pay decisions. As a result, several participants found ways toavoid or sabotage the process. With the pilot program in disarray and theexpected benefits unachieved, those who opposed the program used theirinfluence to eliminate it.T.Y.B.M.SPage 50

360 DEGREE PERFORMANCE APPRAISLT.Y.B.M.SPage 51


ARGUMENTS AGAINST 360 DEGREE PERFORMANCE

APPRAISAL

Despite the fact that 360 degree appraisals are being widelyused throughout the world for appraising the performance of theemployees at all levels, many HR experts and professionals argumentagainst using the technique of 360 degree appraisals. The mainarguments are: 360 performance rating system is not a validated or corroboratedtechnique for Performance appraisal. With the increase in the number of raters from one to five(commonly), it becomes difficult to separate, calculate and eliminatepersonal biasness and differences. It is often time consuming and difficult to analyze the informationgathered.The results can be manipulated by the employees towards theirdesired ratings with the help of the raters.The 360 degree appraisal mechanism can have a adversely effect themotivation and the performance of the employees.360 degree feedback – as a process- requires commitment of topmanagement and the HR, resources (time, financial resources etc),planned implementation and follow-up.360 degree feedback can be adversely affected by the customers‘perception of the organization and their incomplete knowledge aboutthe process and the clarity o f the process.Often, the process suffers because of the lack of knowledge on thepart of the participants or the raters.T.Y.B.M.SPage 52


360-DEGREE PERFORMANCE APPRAISALS: MORE

VALUE, OR JUST MORE TO IGNORE?

Although it seems like performance evaluations should be a logical andproductive part of an employee‘s development, they are often not anythingmore than ignored.Employees often consider the process biased, with unsupported ratings that donot reflect the work they actually do. The appraisal either just pats them on theback, or criticizes them with no workable suggestions for improvement. Theirreview has become just another distraction during the annual (or less frequent)evaluation process. On the other hand, managers for the most part aren‘tequipped to give productive feedback; often they are afraid to provide negativefeedback because of legal threats or they do not want to adversely affectsomeone‘s already small bonus; they are forced to spend hours filling outdetailed forms and looking up figures or trying to remember specifics toevaluate their direct reports.There is a way to do performance evaluations more effectively, a way to savethe process from becoming disregarded. Multi-rater or ―360-degree‖ appraisalscan provide an accurate and acceptable way to evaluate performance whilesaving managers time and effort.360- Degree appraisals improve on any evaluation done by one person bycombining ratings from many people who see different parts of an employee‘sperformance. For example, direct reports probably have the best understandingof someone‘s delegating skills, while managers probably see someone‘s results-focus most clearly. To get a complete image of performance, then, data isgathered from others with various relationships to the employee. It oftenprovides an eye-opening comparison that can serve as a good starting point fordevelopment. Gathering input from all of these points-of-view provides a fullerpicture of someone‘s performance. In simple terms, 360-degree appraisals givea ―3-dimensional‖ performance report, whereas traditional performanceappraisals only give a ―1- dimensional‖ report.Traditional performance appraisals often focus on goal attainment: how closedid someone come to their sales goal, or did someone meet the minimumcustomer service rating. Most likely, there are only a couple of people in theorganization who have the data to answer these types of questions. Because ofthis, goal-based appraisals limit the amount of input that is available for aT.Y.B.M.SPage 53

360 DEGREE PERFORMANCE APPRAISLperformance appraisal. 360-degree appraisals broaden the amount of usableinput to target perceptions of an employee‘s effectiveness. This approach takesadvantage of the various relationships represented in the group of raters. So,while typically only an employee‘s boss knows whether her/his cost-cuttinggoals were met for the most recent quarter, many more people will haveperceptions of that employee‘s financial skills, diligence, fiscal responsibility,etc–all the things necessary to reach those goals. Also, by concentrating oncompetencies rather than goals, the data readily lends itself to personaldevelopment.These features of 360-degree appraisals offer several advantages that help prevent it from just becoming ‗more to ignore‘:Gathering input from multiple sources ensures that individual ratings can be

anonymous. Each rater, then, can be encouraged to be open and honest since their

feedback cannot be singled out from the groups.

Multiple sources of data also mean that ratings reflect multiple perspectives instead of

the single top-down view afforded by traditional appraisals. Combined with the added

anonymity, these ratings should give a fuller, more accurate picture of an employee‘s

performance.

Since the data describes perceptions of effectiveness, using feedback for personal

development is very easy. Instead of showing someone that they made their goals or

not, or providing feedback in personality terms (which, more often than not, feels like

a personal attack), an employee is shown how others perceive his/her behavior.

Behaviors and perceptions are much easier to change than personality. And, unlike

met or unmet goals, behaviors are specific and directly actionable.

Managers only have to complete one form per employee, usually taking about 15

minutes each. There are no figures to research, no goals to look up from last year, no

distribution of overall performance to worry about, no endless comparisons between

employees. Compared with other performance appraisal approaches, managers are

saving time and employees are getting more useful performance feedback.

T.Y.B.M.SPage 54


THINKING TWICE ABOUT 360 DEGREE PERFORMANCE

APPRAISAL

ROBERT H. KENT, PH.D., CMC

The basic concept in 360 Performance Appraisal of soliciting performancefeedback not only from our supervisor but also from our customers, employees,peers and all whom we interrelate with in the course of doing our job, makesobvious sense.But organizations should have concerns about the 360 feedback concept in thecontext of a performance appraisal. Many organizations have jumped on thisbandwagon without sufficient consideration. In looking at the 360 feedbackperformance review process, please consider the following:One -Feedback should be solicited continually:Performance "appraisal" is better called performance "review" since it is theclosing stage of a performance management process which begins with theclarification of performance direction and expectations. A Performance Reviewis a review or comparison of actual performance during the review period, withthe past direction, and an opportunity to set future direction (reviews are alsoused for formal documentation and for use in employee development,promotion and compensation decisions). A Performance Review is never theoccasion for the employee to discover how well he's performed or to find outwhat was expected of him during the review period.The employee should be aware of that (his individual performance related to theperformance expectations) continually throughout the review period.A Performance Review is principally between the employee and whomever theemployee is responsible and accountable to. Realistically, in most organizationsthis is the "boss." At the review it would be insightful, and for some jobsessential, to review how the employee met client and/or peer expectations.But, the degree to which an employee meets client, supplier, peer or subordinateexpectations is not what an employee comes to a Performance Review todiscover. It's too late to learn that information at the end of the review period.That feedback should be solicited continually by the employee throughout thereview period, and then the results of this feedback activity reviewed atPerformance Review time.

360 DEGREE PERFORMANCE APPRAISLIf knowing how others perceive you is important for the performance of yourjob, then measuring that and taking appropriate action on that feedback shouldbe part of your job and included in your job's performance requirements.It seems irresponsible to abdicate that to a third party, like an HR department ora survey company to do for you. Do effective salespeople rely on someone elseto tell them, at year's end, whether their customers were pleased with theservice? And if relationships are so horrid that management can't get honestfeedback directly from its employees, then the real problem won't be solved byimplementing a 360 Appraisal process.Two - A Company Culture that Uses Secret Reports?A common approach to 360 Appraisal is to administer confidential surveys,especially so people can rate their peers and supervisor. Anonymity is ensuredand employees can comment in confidence about the performance of anotheremployee or the boss. Aggregate data is then given to the employee in questionand used as input to the appraisal and eventual rating of that employee.Notwithstanding the substantial research evidence warning of the dangersassociated with peer evaluations and their low validity, basic concern about thisprocess can be summed up with these questions. Do you really want to have acompany with a culture that promotes the use of secret reports to assess andjudge its employees? How can your organization pretend to be open, honest andforthright when it uses secrecy and anonymity to measure the value ofemployees? Is this the way you want your business to run? Supervisors are alsofrustrated not knowing the actual source of employee concerns so that they can attend to the problem effectively. When we set up a system which assumes itmust protect against deceit and retribution, it can become self fulfilling. And aswith suggestion boxes, the anonymous survey unfortunately symbolizes that notonly do employees take a risk if they raise problems or concerns directly withthe supervisor; but also that it's not the supervisor's job to solicit suchinformation.Essentially, any employee feedback process which requires secrecy risksdamaging healthy working relationships, especially between employees andtheir supervisors.Four - You Don't Need 360 to Include FeedbackIf you really want your employees to get performance feedback from the circleof people they work with, including their customers, peers and subordinates, tryT.Y.B.M.SPage 56

360 DEGREE PERFORMANCE APPRAISLthe following simple process: n make "soliciting performance feedback fromsignificant others" a part of all employee jobs and therefore a performancerequirement;N determines what sort of feedback is required, and if possible develop tools tocapture this information; n teach employees how to use the tools (or questions)to get feedback from their subordinates, customers, peers, etc.; n teachemployees how to give performance feedback to their supervisors, peers orsuppliers, etc. n teach employees how to make use of the feedback they receive,and, for example how to follow-up on their subordinates and customerconcerns; n require employees to regularly review (perhaps monthly) the resultsof getting feedback from others, with their own supervisor, so that the processbecomes a priority and so that employees are held accountable for doing so.One final caution. Paying for performance results is a good idea, but thinktwice before rewarding goal achievement with salary increases: (1) It'samazingly expensive. The salary differential is awarded not just once, but everyyear afterward, as long as the person is employed. In addition, if salary level islinked to retirement pay, the extra compensation will be expended for anundetermined number of years during retirement. (2) The incentive doesn'thave immediate impact; the full amount of the reward is distributed throughdozens upon dozens of future paychecks. (3) The incentive is only temporarilyeffective. The motivation of a promised salary disappears immediately after itis awarded.Once a salary is increased, it is perceived as a revision of the employmentcontract: fair compensation for defined levels of employment - not as a reasonto continue exceptional levels of performance. Salary increases should bebased on an established track record of achievement, when a history ofaccomplishment indicates that the value of the employee in the career marketplace has increased.T.Y.B.M.SPage 57


IMPROVING PERFORMANCE WITH FEEDBACK

REWARDS, AND POSITIVE REINFORCEMENT

Opening thought: We need to work smarter, not harder.Feedback: objective information about individual or collective performancehow am I doing? How does this compare to others?Serves 2 functions: 1) instructional 2) motivationalThree sources of feedback• Others: are peers, supervisors, lower-level employees and outsiders.• Task: the task itself is a source of feedback as to how well or not one doessomething.• Self: however, there is often a self-serving bias that is used more by those withhigh esteem for themselves than low. Feedback must meet certain criteria toattain desired outcomes:1) Desire For Feedback• depends on self-reliance• self-assessment ability• preference for external informationNote: -recipients must be open to feedback-low self-esteem, self-efficacy recipients do not often seek feedback-high need achievers and self-monitors desire feedback2) Perception Of Feedback (positive or negative)Feedback can be either positive or negative and people tend to process positivefeedback much better than negative. • negative can have more positive outcomes because are motivated to improve• negative must be presented carefully to avoid creating insecurity anddefensiveness• can damage self-efficacyT.Y.B.M.SPage 58

360 DEGREE PERFORMANCE APPRAISL3) Cognitive Evaluation Of Feedback• accuracy, credibility of source, fairness of system, performance-rewardexpectancies, reasonableness of standards• if do not meet these criteria will be rejected or downplayed• personal experiences dictates how these factors are weighed• often has a profound and lasting effect on behavior4) Behavioral Outcomes Direction, effort, and persistence, and perhaps resistance --Resistance is oneoutcome of feedback and one that needs to be managed. If the employee seesthe efforts as manipulative, it will lead to resistance as well other negativeactions. Nontraditional Upward Feedback and 360-Degree Feedback Traditionhas been top down feedback especially in a hierarchical structure. Newerorganizational structures are trying new approaches (such as upward feedbackand 360-degree feedback, meaning that a person can be evaluated from the top,the side, outside the organization, from those below in position, etc.T.Y.B.M.SPage 59


360 ASSESSMENTS

360 feedback tools are also known as…multi-rater feedbackmulti-source assessmentmulti-source feedbackfull circlegroup performance reviewWhatever the name, the intention of the feedback should help identify theweaknesses and strengths of the workforce. It should also contribute a plan ofaction for the professional development of each individual.Properly applied 360 feedbacks can help employees improve performance andskills in the workplace. It can target precise information about areas employeesneed to keep up to date. It also aids in identifying the specific knowledge,essential functions and characteristics that are critical to the individual‘s job.A good feedback program will generate trustworthy and clear suggestions ofhow employees and managers can improve by providing a solid plan of action.T.Y.B.M.SPage 60


360 APPRAISALS | HUMAN RESOURCE MANAGEMENT

360-Appraisals, also know as ―multi-rater feedback‖ or ―peerappraisals,‖ can create a comprehensive view of an employee‘s performance.HRsmart‘s 360-Appraisal Solution allows managers to extend beyondemployee peers by gathering feedback from clients, vendors or others withwhom they frequently interact.HRsmart‘s 360-Appraisal Solution provides an easy method for gatheringcritical data. This strategic tool can help managers:Gauge employee performance. Managers typically only see a piece of thepicture, but what they don‘t see can be even more telling. When feedback isgathered from peers or outside contacts, a person‘s true value can become moreapparent. Perhaps a customer service manager goes above and beyond everytime they receive a call, or vendors receive all of the information they need onthe first inquiry.Identify leaders. 360-Appraisals can help managers more effectively pinpointgroup leaders. Peer reviews are a great way to determine who had leadershipability within a group by helping you identify employees who motivate others,set good examples and can be trusted by peers to do their part—traits that areoften overlooked or hard to identify in team or group settings.Increase employee awareness. 360 appraisals provide insight intocompetencies and skills held by employees and can help employees betterunderstand how the behaviors and attitudes they exhibit impacts those aroundT.Y.B.M.SPage 61

360 DEGREE PERFORMANCE APPRAISLthem. Anonymous feedback also encourages more open feedback and honestly,particularly when direct peers and managers are involved and Human ResourceManagement.Create and manage 360 assessments. This easy-to-use system allowsappraisal owners to easily generate assessments, then quickly edit, view andprint the results. Data can be captured in an employee‘s annual performanceassessment with the option to include it in the overall rating.HRsmart‘s 360-Appraisal solution is a core component of the EmployeePerformance Management solution; however, it can be purchased as a stand-alone application. Contact a sales representative for more information.T.Y.B.M.SPage 62


GUIDELINES FOR USING 360 FEEDBACK AND

PERFORMANCE APPRAISAL

Here is a set of guidelines for when to use 360 feedback and performanceappraisal that can help organization stay squarely on the road of increasedperformance and success:Use performance appraisal to:- Set clear, specific goals- Establish measurements to determine outcomes and results- Evaluate the degree to which outcomes and results were achieved- Determine, based on performance, what increase or bonus is dueUse 360 feedbacks to:-. Identify, the skills, competencies, behaviors, and practices needed tosuccessfully achieve goals, outcomes, and results- Measure proficiencies in skills, competencies, behaviors and practices- Assess where improvement is needed to achieve desired results- Create targeted development plans that increase capabilities and performanceThe best guidelines are the ones most commonly suggested by experts:1. Ensure that performance goals conform to EEO guidelines: - Related to specific corporate goals - Linked to the person's responsibilities - Achievable - Observable - Measurable2. Reward team development as well as business results3. Empower people to achieve the goals you set4. Reward the people who do the work: - If it was a team effort, reward the team - If it was an individual effort, reward the individual5. Keep the goal-setting, tracking and reward system simple: - Reward outstanding effort, not routine performance - Track and reward outcomes, not process stepsT.Y.B.M.SPage 63


FACTORS LINKED TO SUCCESS

Organizations that experience success with the 360-degree feedback methodshave many environmental attributes present. Some of these are:Organizational climate fosters individual growthCriticisms are seen as opportunities for improvementProper framing of feedback method by managementAssurance that feedback will be kept confidentialDevelopment of feedback tool based on organizational goals and valuesFeedback tool includes area for commentsBrief workers, evaluators and supervisors about purpose, uses of data andmethods of survey prior to distribution of toolTrain workers in appropriate methods to give and receive feedbackSupport feedback with back-up services or customized coaching

FACTORS LINKED TO FAILURE

Many organizations have rushed into 360-degree feedback without laying thefoundation for success. Typical errors include:Feedback tied to merit pay or promotionsComments traced to individuals causing resentment between workersFeedback not linked to organizational goals or valuesUse of the feedback tool as a stand alone without follow-upPoor implementation of 360-degree tool negatively affects motivationExcessive numbers of surveys are required of each worker with few tangibleresults provided to individuals"There is no data it actually improves productivity, increases retention,decreases grievances or that it is superior to forced ranking and standardPerformance Appraisal systems. It sounds good but there is no proof it worksother than a lot of companies have tried it."T.Y.B.M.SPage 64

360 DEGREE PERFORMANCE APPRAISLReport On

FLIP SIDE OF 360 DEGREE FEED BACK- WHAT MAKES THE

PROCESS DIFFICULT

BY N.R. ARAVAMUDHANIn a highly competitive market, organizations are facing an unprecedented pressure to raise thebar of performance and continue to deliver to enable it leapfrog the competition. Today, abeleaguered organization will have to slug it out in the market sweepstakes to live up to theheightened expectations of its key stakeholders. Organizations are looking at ways and meansto operate more effectively and efficiently. American companies, after having bloodied theirhands in 70's and 80's when the US economy slid in to nadir, were always the first off the blockto come up with new approaches and methods to improve performance. One such innovativeassessment tool was 360-degree feedback. Debuted in US companies in 90's, 360-degreeappraisal has become current flavor of the season not only in US, but also in India. Widelytouted as a great development tool, 360-degree feedback is increasingly finding favour with HRmanagers in Indian corporate landscape. Though 360-degree approach brings slew ofadvantages in the wake of its implementation, it has its fair share of naysayers who pan itmercilessly as a process that leaves a trial of blood both in the organization. 360 degree, if notimplemented properly can have a calamitous consequence for companies. Many experts arguethat the right culture should prevail in the organization before introducing 360-degreeapproach; 360 degree involves collecting feed back about an individual from multiple sources.The source, among others includes, an individual's superior, peers, internal and externalcustomers, client reports, suppliers. Self-assessment, conducted by the individual will also beincluded in the exercise. To put it succinctly, the underlying objective is to find the gapbetween one's own appraisal and the perception of other constituents in the 360 degree feedback. There is no gain saying the fact that it's an excellent process. But the nub of the issue isthat it is not always successful. There is always a mad glamour among the companies to hitchitself on to any new management fad that manages to generate quite a buzz. The fact that acompetitor is doing it is good enough reason for others to follow the suit. It all boils down toone vital imperative- "How you do it is more important and critical than actually implementing360 degree feed back". If 360 degree were to be implemented in a haphazard manner, thecompany is setting itself up for a disastrous situation. If people are not happy about the process,then morale will be hit hardest. Willy –Nilly, Companies may open a veritable can of worms,T.Y.B.M.SPage 65

360 DEGREE PERFORMANCE APPRAISLmaking the situation muddier and murkier. Some staff will become soft target. Companies willhave to assess its state of readiness vis-à-vis 360-degree system before taking a headlongplunge. In the light of these facts, the question that begs an answer is what makes 360-degreeappraisal difficult? Some common deficiencies in the 360-degree approach that renders it lessreliable and attractive are using the feedback for performance appraisal.360 degree feedback has a different use:Performance appraisal is a evaluative process used to determine the out comes or the end result.The result gets measured after determining a clear, specific goals and measuring the actualperformance against them. Efforts, attitude, behavior, teamwork are the few performancemetrics factored in performance evaluation. Experts feel that this cannot be a real barometer ofjob performance. 360-degree feedback is a developmental tool. It is a modeled to helpemployees develop by providing feedback on their expertise in the remit of skills,Competencies and behaviors. As the employees grow and nurture their skill sets andcompetencies, companies will be able to turbo-charge its performance levels. So the purpose of360 degree and performance appraisal are different. If the organization tries to link both, then itwill be sitting on powder keg.Architecture of 360-degree tool is polar opposite to performance evaluation360 feedback is a good process to zero in on and measure the skills, competencies and practicesrequired to do a job. In fact 360 degree feedback works wonderfully well in measuring softskills such as emotional quotients listening skills, interpersonal skills, coaching, andleadership.360 degree can also be adopted to identify the training needs. It can also be used toassess the team cohesiveness and customer satisfaction. On the contrary, performance appraisalis an evaluative process, good enough to set the standards of performance and measure theprogress made against it. So performance appraisal and development tools are different fromeach other. Any attempt to dovetail 360-degree feedback into performance appraisal will havenegative implications for the company as a whole. An eminently avoidable situation.Linking 360 degree feedback to promotion and salary decision is risk- fraughtPerformance appraisal is used to decide upon salary hike and promotions. 360 degree is adevelopment tool. If 360 degree feed back is tied to pay hikes and promotion decisions, theprocess will have the stamp of failure written all over it. If the 360-degree is linked to financialrewards, employees can see through the larger game plan and may begin to subvert orcircumvent the system to their advantages. Some employees may get excellent ratings. Fewemployees may find themselves swamped by poor ratings. Trust and honesty gets short shrift.Proficiencies and competencies of the employees will spiral downwards.T.Y.B.M.SPage 66

360 DEGREE PERFORMANCE APPRAISLLack of training could spell a troubleGiving effective feedback is a tough proposition unless the company trains all the constituentsinvolved in 360 degree feed back to receive and provide feedback. The process could plungeinto uncertainty; intractable conflicts among the members could crop up. To provide aconstructive feedback, people need training. Benefits will out strip the cost of training as thefeedback delivered to participants becomes more targeted. Feedback will help employeesidentify a behavior that add or destroys value.Cynicism aboundsLike a match fixing in the cricket, there can be a "fixing" in companies also, albeit of adifferent kind. Raters can collude with each others to muster enough numbers to get goodratings. Employees may treat the whole exercise with disdain, as they know that the system istainted and doctored.Politicking may rear its ugly head.If an individual don't get a good appraisal, the whole blame game is played out. An aggrievedindividual may accuse the co-worker of deliberately giving a low rating and may demand his /her scalp. Mud slinging and muckraking will become every ones favorite Pastime in thecompany.Time and cost are the constraintsTime and cost associated with 360-degree feedback is a real dampener. In a bid to capture allthe facets of employee's performance, the 360degree system may become unmanageable,gobbling up more time and high cost.360 degree feedback can be counter-productive if there is no right culture in the organization.The superiors blanch the possibility of sub-ordinates evaluating their performance. The fact thatthe sub-ordinates take a call on his/her performance is a frightening proposition for the bosses.Employees may not come forward to provide feedback about bosses for the fear of reprisal. Ifthe boss were to have less than five sub-ordinates in the rating pool, it's easier for him to trackdown the source of negative feedback, and launch a massive witch-hunt against the target.Even though the sub-ordinate evaluates the bosses in anonymity they may still give favorableratings to the superior, in order to avoid ruffling the feathers. This only obscures the picturefurther. Sub-ordinate feed back can help the bosses gain insight into their own strengths andweaknesses. The manager can never become responsive to the aspirations of his/her sub-ordinate.T.Y.B.M.SPage 67


CASE STUDY:

WYETH CONSUMER HEALTHCARE - AN ALL-ROUND

APPRAISAL SUCCESS

Wyeth is one of the world‘s leading pharmaceutical and healthcareproducts companies. They are research- driven, with a major focus ondeveloping innovative new medicines that really make a difference to people‘slives and address significant areas of unmet medical need. Appraisals are getting harder! People work flexibly in projects acrossthe organization - everyone is busy - appraisers see less of their people. So,when appraisal comes around, managers are inevitably less well-informed than10 years ago. A particular problem for appraisers seems to be how results wereachieved; the person's relationships, approach and values. What was achievedcan be relatively easy to judge - results are usually much more visible. Adding 360-degree feedback to its performance managementprocess gives Wyeth Consumer Healthcare insight into how staff achieve aswell as what they achieve.The challengeWyeth Consumer Healthcare (WCH) wanted to improve its performancemanagement process but found judging some aspects of it presented a realchallenge. "Besides specific achievements, the review also records ratings ofsupport for the company's values of quality, integrity, respect for people,leadership and collaboration," says Don Sibley, the household medicinemanufacturer's improvement manager, who has since moved on. "But, unlikeperformance objectives, these are not tangible but embedded in relationshipsand attitudes."The programmeThe company decided 360-degree feedback would strengthen the reviewprocess by providing insights into how employees achieved, rather than justT.Y.B.M.SPage 68

360 DEGREE PERFORMANCE APPRAISLwhat they achieved. Over a six-month period, WCH worked with providerSimply360 to develop a process for all 62 staffSome managers were skeptical, so to create champions for the process, a pilotscheme focusing on five senior and middle managers and opinion leaders wasdeveloped. "It was important that executives showed commitment to it by using360-degree feedback as part of their own performance management review,"says Sibley. "If executives were excluded, the process would have lostcredibility."In the summer of 2007, the programme was extended throughout the company."We addressed the issues of honesty and anonymity at short workshops,"explains Sibley. "Some were concerned people would not give the criticalfeedback that might lower appraisal ratings, or that individuals might seek outthose who gave them critical feedback. At the workshops, people were able toexpress those concerns, and get them resolved by reaching an understanding."Questionnaires had to be pertinent for each level of staff and clarity wasessential. Employees negotiate with their manager who their reviewers will beand are advised to select as broad a range as possible from people they workwith on a regular basis. They are also advised to consider choosing someonewith whom their relationship could be improved. The reviewers complete ashort online questionnaire and the results form part of the report discussed at thereview, along with their own views and those of their manager.The resultsAnecdotal evidence suggests the majority of managers and employees feel the360-degree feedback has enhanced the review process and made it easier toidentify personal development needs. According to Sibley, the feedback haschanged the nature of performance reviews. "Reviews are no longer based onone or two individuals' perceptions," he says. "They have become much moreopen, honest discussions and, inevitably, some 360-degree reports havechallenged managers' views about their team. The relationship betweenappraiser and appraised has become more equal."THE HR VIEWDon Sibley was improvement manager at the time the process was developed.He believes the 360-degree feedback really helped to open up a dialoguebetween manager and employee, by focusing on strengths that an employee

360 DEGREE PERFORMANCE APPRAISLmay have shown that may not have been quantifiable and therefore could havebeen missed by their manager. "However, the programme has to be supportedcarefully and has to focus on people processes, not IT," he stresses. "About 90%of the project is about people discussing how they will use the information,asking for feedback, sharing reports and planning their personal developmentwith others. At WCH that means training at all levels so people can feelconfident their concerns are addressed. This ensures the process is transparentand readily understood. Sophisticated tools would be difficult to understand.Similarly, the administration process to manage the project needed thinkingthrough and planning. We had to allow time to make things very, very simple,"he says."THE EMPLOYEE VIEWJames Watson is group brand manager, marketing. "I was aware of the conceptof 360-degree feedback but had not experienced it before," he says and admitshe found the prospect a bit nerve-racking initially. "Besides your own reviewand that of your manager, you agree on three or four other people within thecompany, " he explains. "You're advised to go for a broad range. It is temptingto go for people you know you get on with who can be guaranteed to saypositive things, but it is often more productive to pick people whose reactionsyou're not so sure of or who you feel are not so impressed. Last year, I benefitedfrom feedback from the sales division that highlighted that I needed to get outinto the field more often, as well as suggesting ways I could make their lifeeasier. Coming at it from the other angle as a manager myself, and readingother people's views on my team, has given me a much wider understanding ofhow staff are delivering for others and where issues of confidence lie." What's WCH's secret? Don Sibley, their Training and DevelopmentManager, highlights three things…Good 360 Feedback designs. In particular, clear questions that providespertinent, unambiguous feedback. And, a simple, visual feedback reportthat everyone finds helpful. Don is confident that poor design createsboth ambiguities that fuel arguments and complexity that obstructsproductive discussions.Intelligent implementation. WCH worked hard at developing their 360Feedback process, and then introduced it carefully. Senior managershelped shape the questionnaire, and then piloted 360 Feedback by gettingfeedback themselves. Taking things step-by-step enabled several

360 DEGREE PERFORMANCE APPRAISLimprovements - WCH discovered what worked for them. But, perhapsmore importantly, it created understanding and ownership of 360Feedback across the business before was used in appraisal.Clear personal objectives. If personal objectives are clear, then appraisalis straightforward, the appraise did or didn't deliver. Clear objectivesremove doubt and debate from appraisal rating decisions, and cruciallythey remove 360 Feedback results from those key decisions. Don saysclear objectives make the role of 360 Feedback straightforward - it'sabout understanding performance not determining appraisal ratings. It'snot about determining appraisal ratings or pay.360 Feedback in appraisal has been a huge success for them. An anonymoussurvey of appraisers and appraises found…Most people said 360 Feedback made it easier to discuss performanceboth in terms of the company's values and the job.68% of people described their 360 Feedback as "a fair assessment of myperformance".Almost everyone (87%) said they gave honest feedback to others.80% of appraises and appraisers felt 360 Feedback had enhanced theirannual appraisal.


CASE STUDY- MARUTI UDYOG

It would seem that there is no corporate human resources policy that has not had its share of controversies for being biased. With an increasing number of qualitative factors that affect employees at the workplace, democratizing the performance appraisal process to make it as fair as possible has been the dreamof every HR manager.

And now qualitative factors are not just at play in the services sector, but also inmanufacturing. With cubicles giving way to open offices, the top-downapproach to employee performance appraisal is also on its way out.One company that has set itself on course to further democratizing and openingup its employee evaluation process is car market leader Maruti Udyog.The company has introduced a unique 360-degree feedback system, startingwith its senior leadership. The new system has been co-developed with Ernst &Young and has been put in place recently.Under the 360-degree feedback system, the employee is rated not just by hissuperiors, but also by his peers and subordinates."We are starting the 360-degree feedback process with employees in the topmanagement such as chief general managers and general managers, whoseperformance will now be assessed based on feedback from their peers andjunior management employees within the same department. Till last year, theirperformance was being appraised only by the Directors and the ManagingDirector," says Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.Ernst & Young, in consultation with Maruti, has listed a set of leadershipcompetencies that are expected in a general manager. Based on that, it hasprepared a questionnaire to which peers and subordinates can respond online.

360 DEGREE PERFORMANCE APPRAISLAlthough acknowledged as an effective tool for leadership development in theWest, Indian companies have been shy of introducing such a feedback systemfor fear of disturbing traditional hierarchical structures.HR consultants feel that the critical issues in implementing such a systeminclude assuring respondents that their feedback will remain confidential andconvincing the person receiving the feedback that this is a development tool andnot an appraisal tool. Maruti has handled this by getting E&Y and otherconsultants to make detailed presentations to the senior management personnelbefore the process got under way. The company has a committee of generalmanagers, called Human Resource Inter Divisional Committee (HRIDC), whichis consulted on all major HR issues.The initiative has been unveiled with an e-mail by Maruti's Managing Director,Mr Jagdish Khattar, asking people to support the online questionnaire process.The 360-degree feedback system will also include a self-appraisal by thegeneral manager. At the end of the process, he can compare his self-appraisalwith the assessment of his subordinates and peers.One of the benefits that Maruti is hoping to get out of the 360-degree feedbackprocess is the sense of empowerment and importance felt by subordinates, whenthey are asked to offer their feedback about their superiors. Maruti currently hasover 4,000 employees on its rolls.


APPRAISAL QUESTIONNAIRE OF 360 DEGREE SYSTEM

Appraisal questionnaire of 360 degree systemI/ Company info:1. Name of the Company……………….2. Address:3. Tel:4. Website:5. Person Interviewed….6. Position……………II/ Appraisal info:1) What benefits are you looking to gain from using 360 feedback?2) How is it better than?• MBO• Assessment Centre‘s• Balanced Scorecard• Traditional Methods of performance appraisal?3) What are the advantages and disadvantages of 360 degree process towardsthe individual, team and organization?4) Which type of 360 degree systems do you use?• Paper-based either electronic paper or the real thing• Third party e-mail based system• Personal/telephone based• Off the shelf‘ can be purchased and run it in-house.5) Can you explain the 360 degree process carried out in your company?6) What is the role of the HR manager in this whole process?7) Any training required in conducting this process?If Yes, what kind of training and for who?

360 DEGREE PERFORMANCE APPRAISL9) What briefing do you have in place for the participants and observers?10) How capable are your managers of debriefing the 360 profiles with theirpeople?11) How many observers for one individual?12) Who administers this process?13) How are the questionnaires distributed?14) On what basis are the questionnaires made (competency or result)?What competencies do you measure?15) How many different questionnaires will be required for different levels ofmanagement or is it uniform for all employees?16) Is there any scoring system and which tool do you use to scale the scores?17) What are the difficulties faced during the process and how do you overcomethem?18) Who appoints or chooses the raters, observers, etc.?19) How much access do people have to internet and e-mail?20) How well is the company IT system able to support this initiative ofconducting a 360 degree through the internet?21) What kind of information is targeted through the 360 degree appraisal?22) What security is needed for individuals and for corporate compliance?23) Who sees the individual 360 profiles?24) What benefits have your managers gained from using a 360 feedbackprocess?25) How much are you using any organizational data from the 360 processes?26) Who provides the internal administration of the system?T.Y.B.M.SPage 75

360 DEGREE PERFORMANCE APPRAISL27) What mix of narrative and numerical data is required in the profiles?28) What does the 360 degree report contain?29) How do you manage the feedback process after the profiles have beencompleted?30) How much follow-up is carried out after the 360 profiles are received?31) What is the agreed level of confidentiality for the 360 profiles?


CONCLUSION

The popularity of 360-degree feedback is undeniable. Yet, the perceivedbenefits will help the personal development of workers only in the rightorganizational climate. When this method is utilized in the wrong environment,the results can be detrimental. With close consideration and evaluation of theenvironment, the decision to employ this tool, or another, should be madecarefully.360 feedbacks can be safely linked to appraisal in a performancemanagement system by doing the following:1. Use individual 360 feedbacks to measure the hard-to-quantifyaspects of competence.2. Link measurements of competence to appropriate developmentactivities. Hold people accountable for their development.3. Use satisfaction surveys to measure the hard-to-quantify results.4. Link the measurement of results to appropriate rewards. Holdpeople accountable for results.5. Separate both processes; coordinate them in time so that theysupport each other.Many of the more conventional performance appraisal methods have oftenproved unpopular with those being appraised and evaluators alike, 360 isgaining popularity with many managers and employees.It offers a new way of addressing the performance issue.When used with consideration and discipline, feedback recipients will feelthat they're being treated fairly.In addition, supervisors will feel the relief of no longer carrying the fullburden of assessing subordinate performance.The combined effect of these outcomes should result in increasedmotivation, which in turn improves performance.

360 DEGREE PERFORMANCE APPRAISLIn light of this approach, the typical rationalizations that encourage linkingindividual 360 feedbacks to pay and personnel decisions are remarkablyunconvincing."If 360 feedbacks aren‘t linked to pay, what would motivate anyone to take itseriously?" Most people want to remain competitive in the workplace, and theyknow that feedback gives them an edge. Feedback is important to people whowant to: (1) See themselves as professionals, (2) Upgrade their skills, (3) Findout what their coworkers already know about their weaknesses, (4) Resolveproblems they may be causing, and (5) Contribute to the team mission and itssuccess."A multi-source appraisal is more effective than a single-source appraisal."That's true. But single-source (boss) feedback is only one of the problems thatplague performance appraisal. Using multi-source feedback as a platform forappraisal is like putting a new horn and side mirrors on a junk car. It's safer todrive, but the car still needs major repairs. From a cost viewpoint this may sound like a reasonable idea, but as I haveemphasized repeatedly, there are huge risks. The solution is to take the prudentpath."We can start with the development-only approach, get them used to 360, then'ease it in' to using it for performance appraisal." No matter how gradually youfamiliarize people with the process, if you connect a 360 appraisal tocompensation and personnel decisions, employees will know that theirevaluations can affect a person's career and will find it insurmountably difficultto give honest feedback and accurate ratings. When this happens, 360feedbacks will no longer be useful for development. And since supervisorshave been challenged to give fair appraisals for decades and have not met thechallenge satisfactorily, how can anyone expect coworkers to be moreobjective?T.Y.B.M.SPage 78

360 DEGREE PERFORMANCE APPRAISLTrust is at the core of using 360 to enhance productivity. Trust determines howmuch an individual is willing to contribute for an employer. Using 360confidentially for developmental purposes builds trust; using it to trigger payand other personnel decisions puts trust at risk. Why would an organizationconsciously choose to jeopardize trust for the sake of convenience orefficiency?In the end, leaders are responsible for "managing" performance bothcompetence and results. Performance appraisal and 360 feedbacks are toolsthat help leaders fulfill this responsibility powerful tool, when used with careand good judgment.


Bibliography:

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