PERFORMANCE APPRAISAL
INTRODUCTION
People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee‘s abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance. Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims.
The latest mantra being followed by organizations across the world being – ―get paid according to what you contribute‖ – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual‘s performance. It helps to align the individual performances with the organizational goals and also
review their performance.
Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees.
FEATURES OF PERFORMANCE APPRAISAL
1) Setting SMART Goals for Employees:
Goal setting provides leaders, managers and employees with web-based tools to set SMART goals and track progress on frequent intervals.
2) Evaluate Employee Performance:
Employee Appraisal ensures objective and accurate evaluation of your employee‘s performance and helps you find the strengths and weakness of the employee.
3)Coach and Train Employees to improve their performance:
To continually improve performance of your organization you need to continuously 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 your business and attract and retain talented employee.
5)Promote right employees to critical positions: Organizations success by placing right employee in right positions.
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 to identify 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 the organization.
Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.
To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development. To reduce the grievances of the employees.
PERFORMANCE APPRAISAL SYSTEMS
Issues like promotions, demotions, bonuses and pay will affect the success or failure of a 360 degree performance appraisal. Keep in mind that performance appraisal systems are used to define employee goals, employee contributions and determine the employee‘s results in meeting those goals and contributions. It is a genuine review of past employee performance.
PERFORMANCE APPRAISAL - PUNISHMENT TOOL OR
ORGANIZATIONAL CATALYST
Performance Appraisal is one of the core HR activities. It is the assessment of the employee‘s job performance. It is completely based on employee‘s job description and objectives to be achieved.
Performance Appraisal (PA) has 2 basic purposes. First, PA serves an administrative purpose. It provides information for making salary, promotion and layoff decisions as well as providing documentation for justifying these decisions. Second, rather more importantly, performance appraisal serves a developmental purpose. This information can be utilized for determining training 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 the organization. Those employees, who work efficiently and effectively, will get the agreed intrinsic as well as extrinsic benefits. It is being regarded as an excellent method of keeping everyone motivated. The better you perform, the more you get.
On the contrary, some employees suggest to their managers that companies should get rid of performance appraisals as it is a bitter process which has the ability to create emotional pressures and stress for the employees.
A manager‘s bias also plays its role. Furthermore, he might lack proper training for evaluating employees‘ performances. Their perception is that ―no matter how well we perform, our contributions will never be acknowledged.‖
Annual performance
The annual performance appraisal might be the most important meeting you have with your employees all year. Appraisals offer an opportunity to clarify job descriptions, set goals and objectives, formulate sensible compensation decisions, and decisively address any performance challenges. Properly handled, performance appraisals can correct personnel issues and set employees on a positive course for the coming months. Handled poorly, they have the potential to demoralize employees, provoke EEO complaints, and erode trust in management.
This session is a must for managers and human resource professionals who are frustrated with the typical ineffectiveness of performance management discussions in advancing organizational goals and promoting positive employee relations.
360 DEGREE PERFORMANCE APPRAISAL
INTRODUCTION
Unlike, the traditional top-down appraisal where a supervisor appraises the performance of their subordinate, 360 Performance Appraisal incorporates multiple perspectives by using feedback from a variety of sources. 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees‘ performance comes 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 provide valuable insights and information or feedback regarding the ―on-the-job‖ performance of the employee.
360 degree appraisal has four integral components: 1. Self appraisal
2. Superiors appraisal 3. Subordinate‘s appraisal 4. Peer appraisal.
Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior‘s appraisal forms the traditional part of the 360 degree appraisal where the employees‘ responsibilities and actual performance is rated by the superior. Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior‘s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees‘ abilities to work in a team, co-operation and sensitivity towards others.
Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review" of the employees‘ performance and is considered to be one of the most credible performance appraisal methods.
The aim is to find the gap between one‘s own appraisal and the perceptions of others. This will in turn enable a professional to analyze his strengths and shortcomings and accordingly improve his performance. While it is true that the system serves as an excellent process since it reduces biases, it is not always successful. It is necessary to create the right culture in the company before introducing the system. If many people are unhappy or their morale is low, the situation can turn disastrous as some staffers will become obvious targets.
360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others‘ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals.
Some of the Organizations using 360 Degree Performance Appraisal are: Wipro,
Infosys,
Reliance Industries Maruti Udyog etc. HCLTechnologies.
Wyeth Consumer Health (WCH)
WHAT IS 360 DEGREE PERFORMANCE APPRAISAL?
360 Degree performance Appraisal is the most comprehensive appraisal where the feedback about the employee‘s performance comes from all the sources that come in contact with the employee on his job. For e.g.: peers, colleagues‘, supervisors, subordinates, and clients etc, including the employee himself. 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 involves appraisal by those above, below, and to the side of an individual employee, as well as self assessment in practice. The half yearly or yearly report of work schedule goes from company to their headquarter of all the workers where their performance is appraised. It contains all demotion, promotion, and other activities related to the performance.
360 DEGREE FEEDBACK
INTRODUCTION
360 feedbacks is simply a process for employees, management and customers to receive… advice reactions comments opinions responses criticisms views pointers
…from each other about the efficiency of their professional development. Thus the term 360 degree feedback, meaning a circle of those co-workers, managers and customers around you.
It is common for employees to be appraised by just one person, a manager or boss. What if this appraisal process can be improved by gaining feedback from people that work around the employee as well? This would give a fairer and more accurate view of an employee.
360-degree feedback occurs when feedback is obtained from sources all around an employee.
These sources may include: management;
co-workers; clients;
self assessment.
The system can include feedback from all of these groups, and from multiple people from each of the groups. If you do not want to include all the groups in the appraisal process, our system will automatically adjust for this. A common example 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 performance by people who know something about their work. This can include direct reports, peers, managers, customers or clients; in fact anybody who is credible to the individual and is familiar with their work can be included in the feedback process. The individual usually completes a self-assessment exercise on their performance, which is also used in the process.
360-DEGREE FEEDBACK DEFINITION -ACCORDING TO: TERRI LINMAN
―360-degree feedback is an evaluation method that incorporates feedback from the worker, his/her peers, superiors, subordinates, and customers. Results of these confidential surveys are tabulated and shared with the worker, usually by a manager. Interpretation of the results, trends and themes are discussed as part of the feedback. The primary reason to use this full circle of confidential reviews is to provide the worker with information about his/her performance from multiple perspectives. From this feedback, the worker is able to set goals for self-development which will advance their career and benefit the organization. With 360-degree feedback, the worker is central to the evaluation process and the ultimate goal is to improve individual performance within the organization. Under ideal circumstances, 360-degree feedback is used as an assessment for personal development rather than evaluation‖.
360 DEGREE FEEDBACK SYSTEM
A 360 degree feedback system is designed to develop and discover and employee‘s level of skill, how capable and knowledgeable employee is and look for ways to improve how employee does their job.
A performance evaluation appraisal and a 360 degree feedback have different functions. Research shows that 360 feedbacks when used incorrectly cause poor performance. It breeds employee mistrust and as stated before, increases the organizations risk of legal hot water.
Employee compensation decisions have historically been associated with performance appraisals. In my organization (Local Government) there is a culture of skepticism of management at best.
360 degree appraisals involve evaluating supervisors and managers as well employees. This could be a positive for anyone who works for a local government. However, because of the secrecy involved in who does the rating…secrecy, government.
When 360 reviews are merged with compensation decisions (360 degree performance appraisal), employees will begin to doubt the advantages of 360 degree feedback. When workers perceive that people around them are deciding their financial rewards and promotional opportunities, mistrust may set in.
Some employee and manager raters may have trouble separating personal bias and dislikes from an honest assessment of a coworker. Multiple source raters are not very good at giving unbiased feedback. For performance appraisal purposes, co-workers are bad at figuring out 360 feedbacks that influences promotions and the size of the paychecks.
SOME
DIFFERENCES
BETWEEN
A
360
DEGREE
FEEDBACK AND A PERFORMANCE APPRAISAL
An effective performance appraisal is basically done between the employee and however she reports to. The employee does not come to a performance appraisal to find out how much she met co-worker, subordinate or customer expectations.
When the manager calls her into the office for a performance appraisal meeting the focus is on the actual performance of her job between the last review and the current one. There are different expectations in a 360 degree feedback. 360 degree evaluations involve how those around you perceive your level of…
skill
practice (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 is needed. Thus a 360 degree evaluation is used for ongoing personal and professional development. A traditional staff performance appraisal highlights a set of tasks performed satisfactorily in a specific period of time.
There are other differences between a performance appraisal and 360 degree feedback.
Typical performance appraisal methods involve the following… pay increases or decreases
merit raises promotions demotions
separations or transfers
A 360 degree feedback system by design should not deal with employee compensation.
Compensation decisions are one of the areas of controversy involving the merger of 360 degree feedback and performance appraisal in evaluating job reviews.
The need for growth in team and personal levels of performance have been the driving force toward blending appraisal of performance and a 360 degree
feedback system.
A standard procedure of 360 appraisal involves providing a survey for employees to rate each other and managers. These surveys are typically of a confidential nature. This gives employees the confidence to give comments without fear of retaliation. However there is research that points to dangers in
360 degree evaluations.
These 360 degree feedback surveys have managers and employees who are selected as raters. What does rater mean? They are fellow employees or managers who are selected to evaluate us. This is viewed as a more fair process because the appraisals of employee performance are conducted by multiple sources versus one manager who may be biased.
Research shows mixing 360 degree feedback and job performance appraisals can expose a company to more employee lawsuits. This is because those rating an employee must be careful not to violate the Civil Rights Act or Equal Employment Opportunity Commission (EEOC) guidelines. The info gathered from all raters is then given to the employee by someone designated by management.
NEED OF 360-DEGREE FEEDBACK IN ORGANIZATIONS
Business is towards surplus generation. Without surplus no organization can grow. Here the effort to grow the business and the surplus should come from employee part. The performance of the employees is at work here matters in business development and organizational development. The performance of the employees should then align with the strategic decisions that integrate the business goals in an increasingly competitive environment. It is the responsibility of the Human Resource Management to integrate the culture of the organization with all available resources to the optimum out put. The 3600 Appraisal helps the HR Department to have better understanding of the competitive advantage and disadvantages of the current manpower resources and 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 requirements clearly stated.
* A detailed plan of implementation
* Collaboration between superior and subordinates
* some prior experimentation and positive experiences Clear organizational philosophy and policy objectives
USES FOR 360 DEGREE FEEDBACK INCLUDE: Performance Appraisal
o 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, job enlargement, job transfer, probation, etc.
Organizational Climate Study:
o Organizational environment improvement needs
o Changes in the Managerial approaches, leadership, etc Customer Satisfaction Study
o Employees attitudinal change
HOW IT IS CONDUCTED.
(1.) Develop questionnaire: A questionnaire used for 360 Performance
Appraisal typically contains items that are rated on a 5 point scale. These items may be developed to measure different dimensions of job performance (e.g., communication, teamwork, leadership, initiative, judgment). Questionnaires also typically include one or more open-ended questions to solicit written feedback.
Questionnaires typically include from 50 to 100 items. When estimating the amount of time to complete the questionnaire they should estimate about 1 minute per questionnaire item.
If using a printed questionnaire form, they should consider using forms that can be scanned into a computer.
(2.) Ensure confidentiality of participants Steps must be taken to ensure the confidentiality of the feedback results. For example, feedback ratings from several subordinates may be combined (averaged) to mask the identity of an individual subordinate. The confidentiality helps ensure that the results are genuine.
(3.) Provide training/orientation often the feedback process involves use of one or more questionnaires, confidential information, and involvement from many different areas of an organization. Therefore, training and orientation to the feedback process is needed to facilitate a smooth feedback process. During this training/orientation, employees should be informed of what 360 Performance Appraisal is and why it is being implemented at the organization. They may want to provide samples of the questionnaire items and/or feedback results. (4.) Administer the feedback questionnaire Distribute questionnaire forms (if using printed copies) with instructions. May want to prepare answers to
common questions if other employees will be assisting in the administration. If possible, 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 contact employees 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-Performance vs. Expected; Individual Item Ratings; Item Ratings-Summary-Performance vs. Expected (formed); Highest- or Lowest-Rated Items (shows individual's strengths and weaknesses); Group & Organizational Ranking, and Recommendations for Development.
They may want to analyze the data by organizational division or department to assess group and organizational strengths and weaknesses. This can be used to support or promote training and organizational development.
(6.) Develop and Distribute Results Feedback results should be shared with the employee. It should not be mandatory that the employee share the results with their supervisor. However, they may want to make this an optional part of the performance review of the employee.
Most results for an employee will include a comparison of their ratings to the ratings of their supervisor and average of the ratings from others (peers, customers...). The comparisons may be in the form of numbers or simple bar charts.
They may want to provide individual review sessions or group workshops conducted by a facilitator to help individuals review and understand the results and develop appropriate goals and objectives.
Dimensions
Responses are collected for items that fall under a specific dimension of job performance. A single questionnaire may contain dozens of questions that measure responses on one or more dimensions.
Example of dimensions are shown below.
• Problem Solving Items under this dimension measure how well a person can understand information and options, give appropriate considerations to
information, make correct decisions, analyze and interpret information, and react to changing situations.
• Planning and Organizing Items under this dimension measure a person's ability to develop plans and objectives, develop long-term solutions, set business objectives adhere to schedules.
• Communication Items under this dimension measure the ability to present information formally and informally in both written and orally. Also measures the ability to communicate with customers, staff, peers and supervisors.
• Supervisory Skills Measures the individual's skill level in planning, organizing and overseeing the work of subordinates. Also measures a person's ability to manage work flow efficiently.
• Administrative Skills Measures an individual's ability to implement and monitor actions to ensure compliance with policies and regulations. Also helps identify the ability to distribute information, allocate staff and maintain records or 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 scales reflecting an individual\'s overall ability to successfully perform management tasks.
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 the success of the company depends on continuous revolution, which is possible through organizational development. 360-degree feedback facilitates the alignment of individual capabilities and behaviors with organizational strategies. It adds value to the organization indifferent ways:-o 360-degree feedback provides a better understanding of individuals performance at work
o 360-degree feedback provides a multifaceted view about the employees from different sources
o 360-degree feedback provides a better understanding of employed developmental needs
o 360-degree feedback provides increased the understanding about one's role expectations.
o 360-degree feedback provides increased the understanding of competence and competency in various roles
o 360-degree feedback extends better morale to those who perform and contribute well to the organization
o 360-degree feedback reduces training costs by identifying common development needs.
o 360-degree feedback increases the team's ability to contribute to the organizations goals
o 360-degree feedback helps everyone to work for a common standard and institutionalize performance management.
o 360-degree feedback ensure better interpersonal relationship and group cohesiveness
o It promotes self-directed learning and provides a road map for employee's development planning.
o It promotes better Communication within departments.
o 360-degree feedback Increases the team's ability to contribute to the organizations goals develop better bottom line through boosting the capability of the organization to meet its objectives.
360 DEGREE FEEDBACK BENEFITS
Employees should be aware of what 360 degree feedback benefits could mean for them. The benefits centre on improving managerial performance which has been demonstrated to have a substantial impact on productivity and profitability. Evaluations typically achieve 90% agreement rates that the results are useful.
The benefits apply at several levels:
Self-insight and learning. 360-degree feedback provides the opportunity to see ourselves as others see us. This is the first step to help identify strengths in one's management style that can be built on and areas of weakness that can be redressed.
Focuses career development Discussions around feedback, strengths and development areas are also useful for sharpening ideas about the future and potential career directions.
Hard data. 360-feedback data provides quantifiable data on a range of leadership and personal capabilities, enabling comparisons to be made, both within and between managers.
Motivational. A programme of 360-degree feedback can have a positive motivational effect on managers. The managers feel they are being listened to as individuals and that they are receiving support in their development and dealing with problems. Team members can similarly experience 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. An atmosphere of open and honest feedback means decision making can be more rigorous. Unsatisfactory behaviour can be identified and addressed rather than swept under the carpet.
Competency approach. The use of competencies to define the managerial behaviours valued in an organization helps integrate recruitment, leadership development and performance appraisal into a coherent framework.
Broader perspective. Performance management becomes more rounded, taking a broader set of perspectives than just the manager.
THE 360 DEGREE PROCESS
(1.) Self-assessment
Self-assessment encourages the individual to take responsibility for his or her own development and is a useful starting point in the 360-degree feedback process. Consideration needs to be given to the purpose of this information and how 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 the individual is a key part of the process. Ideally the recipient will have full
involvement in identifying who they think is in the best position to comment on their performance. The raters must be credible to the recipient for them to act on the resulting feedback.
Number of raters
The assessment has to be based on a large enough sample to ensure that it is valid. If too small, there is a danger that one rater‘s view will have a major impact on the overall results. 7 to 12 respondents are usually sufficient in terms of reliability.
(3.) The questionnaire
The design of the assessment, reporting and feedback process should suit the purpose of the exercise. It needs to describe the behaviours, which relate to actual job performance. It should relate to existing measurement systems within their area, such as competencies. It also needs to be in line with City‘s culture and values.
The questionnaire needs to be relevant to the raters and their day-to-day involvement with the individual. A well-designed questionnaire should offer respondents the opportunity to indicate where they have not had the opportunity to observe behaviour, or where the behaviour is not relevant to the job, so as not to force them to guess. Ideally the questionnaire should take between 15 and 30 minutes to complete.
Qualitative and quantitative data
The most effective questionnaire design is one that encompasses both quantitative as well as qualitative elements. The quantitative elements provide the structure and the qualitative questions provide the context. (4.) Feedback strategy
It is important to consider what feedback is communicated and how and when this takes place.
Feedback report
Feedback usually consists of a report. The design of the report should be kept simple and ideally designed to help the individual priorities their relative strengths and development areas Given that an individual is receiving sensitive information about how their colleagues, direct reports and manager view their performance, sensitivity is essential. Someone must be available to
help interpret the results with that person.
.
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 to support this process.
When feedback is communicated
Ideally the individual receives feedback as soon as possible after that feedback has been collated. It is important to ensure that people receive it when there is support available to interpret the results e.g. as part of a supportive appraisal process.
360 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.
For 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.
ADVANTAGES OF 360 DEGREE APPRAISALS
o Provides a more comprehensive view of employee performance.
o Increases credibility of performance appraisal.
o Feedback from peers enhances employee self-development.
o Increases accountability of employees to their customers.
o The combination of opinions can approximate to an ‗accurate‘
view
o Comments expressed by several colleagues tend to carry weight
o Some skills are best judged by peers and staff, not by manager alone
o Feedback may be motivating for people who undervalue themselves
o The wider involvement help to engender a more honest organizational culture
DISADVANTAGES OF 360 DEGREE APPRAISALS
o Time consuming and more administratively complex.
o Extensive giving and receiving feedback can be intimidating to some employees.
o Requires training and significant change effort to work effectively.
o Results can be difficult to interpret
o Feedback can be damaging unless handled carefully and sensitively
o Can generate an environment of suspicion if not managed openly and honestly
The 360-degree appraisal significantly differs from the traditional supervisor-subordinate performance evaluation. Rather than having a single person play judge, a 360-degree appraisal acts more like a jury. The people who actually deal with the employee each day create a pool of information and perspectives on which the supervisor may act. This group of individuals is made up of both internal and external customers.
Using 360-degree appraisals provides a broader view of the employee‘s performance. The most obvious benefit of the 360-degree appraisal is its ability to corral a range of customer feedback. Because each customer offers a new, unique view, it produces a more complete picture of an employee‘s performance. Unlike with supervisors, employees can‘t hide as easily in 360-degree appraisals because peers know their behaviors best and insist on giving more valid ratings. In addition to providing broader perspectives, the 360-degree appraisal facilitates greater employee self-development. It enables an employee to compare his or her own perceptions with the perception of others on the employee‘s skills, styles, and performance.
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.
THE PROBLEM WITH 360 FEEDBACK
This is a good challenge to using 360 Degree Feedback as a means of
communication in an organization. I would respond as follows:
Face-to-face communication, with immediate and relevant feedback is of course the best way to manage individuals and teams. 360 Degree Feedback should never be used as a substitute for this, or as a way of avoiding difficult conversations.
360 Degree Feedback is part of a wider set of activities that helps people to understand their own skills and how they can grow as managers or leaders in their organization. That‘s why generic 360s are less useful that those that are customized and aligned with the organization‘s goals.
Even in organizations with good face-to-face feedback, we find that individuals who receive 360 Degree feedback are often surprised at the perceptions of others about them, and that this can lead to an increased awareness of their day to day behaviours and their impact on other people.
And in an ideal world, of course I should tell my boss when I‘m not happy that she chews me out in front of the rest of the team…and she should accept that feedback directly from me and without any reprecussions, but we know that‘s not always the case. And maybe my boss needs to understand that a number of other people might feel that way? 360 is a great way of getting that message across. Used correctly and in the right situations, 360 Degree Feedback is a very powerful tool for development; please don‘t throw the 360 Degree Feedback baby out with the bathwater
!TRACK: THE RIGHT TRAINING, FOR THE RIGHT PEOPLE, AT THE RIGHT TIME
DOES 360-DEGREE FEEDBACK NEGATIVELY AFFECT
COMPANY PERFORMANCE? STUDIES SHOW THAT
360-DEGREE FEEDBACK MAY DO MORE HARM THAN GOOD.
WHAT'S
THE
PROBLEM?
-
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 of mortality and morbidity."
Those are tough words from Dr. Jeffrey C. Pfeiffer, professor of organizational behavior at Stanford University and a leader in management thinking, but they are on the mark. Too many organizations base their human resources investment decisions on tradition, fads or competitors' practices, instead of on sound financial measures.
A perfect example of this phenomenon may be 360-degree feedback. Adopted by a growing number of organizations, 360-degree feedback is widely accepted as an effective performance management tool.
However, new research shows that 360-degree feedback programs may hurt more than they help. Watson Wyatt's 2001 Human Capital Index (HCI), an ongoing study of the linkages between specific HR practices and shareholder value at 750 large, publicly traded companies, found that 360-degree feedback programs were associated with a 10.6 percent decrease in shareholder value. That doesn't necessarily mean 360-degree feedback programs should be abandoned. But it does mean organizations should take a second look at their performance management programs to see if they are accomplishing what they are supposed to.
Popularity of 360-Degree Feedback
360-degree feedback is a performance appraisal approach uses input from an employee's supervisors, colleagues, subordinates--and, sometimes, even suppliers and customers. Most 360-degree feedback programs focus on the manager level and above.
The use of 360-degree feedback has grown dramatically in recent years. According to HR consulting firm William M. Mercer, 40 percent of companies used 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 most closely with an employee see that person's behavior in settings and circumstances that a supervisor may not. And, in theory, the more complete the insight into an employee's performance, the more likely he will understand what needs 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-degree feedback have lower market value. According to the study, companies that use peer review have a market value that is 4.9 percent lower than similarly situated companies that don't use peer review. Likewise, companies that allow employees to evaluate their managers are valued 5.7 percent lower than similar firms that don't.
Taken together, these practices are associated with a 10.6 percent decline in shareholder value.
Voices of Doubt
The HCI study is not the only indicator that 360-degree feedback programs may be failing to match their promise. Researchers and formerly strong advocates of 360-degree feedback have begun to raise questions. Jai Ghorpade, a professor of management at San Diego State University, wrote in the Academy of Management Executive that, "while it delivers valuable feedback, the 360-degree concept has serious problems relating to privacy, validity and effectiveness."
Ghorpade also reported that out of more than 600 feedback studies, one-third found improvements in performance, one-third reported decreases in performance and the rest reported no impact at all.
John Sullivan, professor of human resource management at San Francisco State University, says "there is no data showing that [360-degree feedback] actually improves productivity, increases retention, decreases grievances or is superior to forced ranking and standard performance appraisal systems. It sounds good, but there is no proof it works."
Why is 360-degree feedback failing to live up to its potential? For starters, giving effective appraisals is a difficult task. Unless everyone participating in a 360-degree program is trained in the art of giving and receiving feedback, the process can lead to uncertainty and conflict among team members.
Another issue is that there may be a gap between an organization's business objectives and what degree feedback programs measure. Typical 360-degree feedback programs assess competencies that are not directly related to business results or are so broad that they aren't relevant to the average employee.
The time and cost associated with 360-degree feedback also are stumbling blocks. By trying to capture every nuance of a worker's performance, many 360-degree feed-back programs have become so complex that they require a much greater investment in time and money than they can return.
Another common problem: Reviewers and those being reviewed fail to follow up 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 It
Despite these drawbacks, there are good reasons not to give up on 360-degree feedback.
The process still holds the potential to deepen employees' understanding of their own performance. And, it may be able to help companies create value by better aligning job performance with business strategy.
The question is this: Can 360-degree feedback be implemented in such a way that it achieves these benefits without negatively affecting the bottom line? Based on our analysis--and conversations with clients-- we believe the following steps may help companies transform 360-degree feedback into a value creator, not destroyer.
* Implement 360-degree feedback for the right reasons. "The first thing you need to ask is why you're doing it," says Paul Rudely, a New York-based executive coach. If you can't articulate a strong business case for a 360-degree feedback program, it should not be introduced.
Jeff Seretan, head of human resources for Barclay's Global Investors, based in San Francisco, agrees. "You should not implement it unless you can show that it is solving a problem or adding value," he says.
Barclay's uses 360-degree feedback to provide senior executives with input on their management styles. "Our executives had minimal input into their leadership styles, so our goal was to address these information gaps," Seretan explains.
* Assess the costs of the program. Employers must "assess the real burden they are 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 of value destruction.
* Focus on business goals and strategy. Feedback should provide employees with insight into the skills they must develop to help the organization meet its goals.
* Do not rely solely on 360-degree feedback. Employees must receive regular, timely feedback about their day-today performance. "360-degree feedback is just one part of our approach," Seretan says.
Rudely likes to use 360-degree feedback as a baseline for a more in-depth look at an individual's performance profile. "While I've yet to see a 360 that was inaccurate, often they can stand to be fleshed out a bit," he says.
He recalls one 360-degree feedback assessment that made an employee "look like Mother Theresa." The woman was very talented, he says, "but nobody walks on water like that. I conducted a series of personal interviews with the woman's raters to follow-up. After the interviews, I had a much better view of her strengths and weaknesses."
Additional interviews won't always be necessary, but companies should consider using them in situations where they can help clarify the results of 360 feedback. Ultimately, the thing to remember is that 360 feedbacks is just one part 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 implementing the program to ensure relevance and ownership. A 360-degree feedback program is doomed if HR is its only champion.
360-degree feedback without first checking and developing managers' feedback skills risk serious damage to teamwork and morale. Providing constructive feedback takes instruction, training and practice.
While training individuals to give and receive feedback may temporarily increase the expense associated with 360-degree feedback programs, the gains will outweigh the higher costs as the feedback delivered to participants becomes more focused, targeting the behaviors most closely associated with value creation and destruction. Ultimately, the goal should be to create a culture in which individuals feel comfortable giving and 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. "Knowing what to do and not doing it doesn't get you very far," Pfeiffer says.
Rudely recommends that individuals sit down with their managers and their subordinates 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 for individuals related to their success in following their action plans. "If the program is just another add-or and not part of a scorecard, you're kidding yourself," 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 implementing changes based on the answers, companies may be able to put 360-degree feedback programs back on track.
It also helps to continually benchmark results against the objective articulated at the outset. "For us, the test is not whether we have a program in place, it's whether we got the desired result," Seretan says.
* Recognize that 360-degree feedback is not a panacea. Just because an individual receives insight into his behavior doesn't mean he can--or will--change it. Traditional performance management systems have struggled with
this axiom for years, and it is naive to think that 360-degree feedback programs will be significantly different.
Take Another Look
The findings about 360-degree feedback programs are eye-opening. The fact that they are associated with a decline in shareholder value should persuade HR managers to revisit their existing or planned 360-degree feedback programs. The existence of such data also should force companies to ask themselves what they hope to gain from 360 reviews--or, for that matter, from any HR initiative they undertake. What is the potential return on investment (ROT)? How do ROI projections compare to actual performance? And, if expectations haven't been met, what can be done to improve the effectiveness of these programs?
Implementing a successful 360-degree feedback program is akin to managing your own investment portfolio: You can come out ahead, but it takes work.
Feedback Varies with Your Point of View By Kenneth M. Nowack
Multi-rater feedback can raise more questions: How is an employee to react, for example when his manager gives him negative ratings while feedback from his direct reports an peers is situation. Research suggests than disagreement between rate groups is common-and that the resulting confusion creates challenges for employee development.
The strength of 360-degrees feedback is that it reflects him varying perspectives of different rate groups. That's also part of the problem. What one group views as effective behavior, another group may see as problematic.
And each rater group brings natural biases to the table. For example studies conducted by Organizational Performance Dimensions find that supervisor feedback tends to be based no bottom line results (are tasks completed on time
complains or clients.
By contrast direct reports base their reviews on factors such as willingness to involve the direct report in decisions interest in a direct reports professional development and trustworthiness
Peers who lack perspective on their colleagues' day-to-day performance tend to focus on leadership potential. Their remarks often reflect opinions or whether the participant has the "rights stuff" to motivate and create a compelling vision for others to follow.
None of these perspectives is wrong and all of these insights can be valuable in creating a 360-degrees view of performance. However it's important that the person being reviewed-and his supervisors-understand how the filters used by different groups affect how they rate performance.
Kenneth M. Nowack is a licensed psychologist and director of Organizational Performance Dimensions, a Santa Monica Calif: based company specializing in 360-degree-feedback.
Focus on Why and How Jai Ghorpade
In evaluating the effect of 360-degree feedback--on any HR practice--on firm performance we must ask why companies about it. For example in the 1930s many troubled companies adopted Joe Scanion's group incentive plan. As a result a snapshot of companies using the Scanion Plan at that time would have shown that the plan was associated with poor performing companies.
Therefore, I suggest caution in interpreting the Watson Wyatt study. We nee to know more about companies motivation for adopting 360-degree feedback as well as their financial condition before and after adoption. Perhaps the researchers can ferret out this information.
Assuming there is some truth to the Watson Wyatt report. I would like to focus on a potential explanation provided by Plau and Key for why 360-degree feedback is not living up to its advanced billing. The authors state that there may be a gap between an organizations business objectives and what 360-degree feedback programs measure. I strongly emphasized this point in an
article they cite, which appeared in the January 2000. Academy of Management Executive.
But I believe the problem goes beyond congruence with company objectives. Most companies using 360-degree feedback tent to employ generic off-the shelf instruments that are of interest to psychologists but may not have much relevance to the organizational context in which they are being used. It is a question of the relevance of the behaviors and traits on the feedback instruments to specific interpersonal and cultural problems a specific company laces are a specific time.
Assuring context relevance is not easy and calls for a very different type of competency on the part of the HR professionals and other who are helping companies to use 360-degree feedback.
THE DANGERS OF USING 360 DEGREE FEEDBACK FOR
PERFORMANCE APPRAISAL-
DAVID LASSITERIn a time of low unemployment and transient loyalty, knowledgeable managers are keenly aware of the need to motivate, develop, and retain quality people. Research has clearly indicated that employee satisfaction is a key ingredient to loyalty and retention and is heavily influenced by feedback on performance. Managers increasingly, and mistakenly, look to 360-degree assessment as a quick and easy solution to the feedback dilemma.
Trend:
Inappropriate use of 360 degree feedback can unravel years of environment building effort and huge investments of bottom line dollars. It is not, however, the "silver bullet". There is a rising demand in organizations for improved 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 for finding new approaches and processes to boost performance. In the new century, organizations in all sectors are challenged to operate even more responsively and efficiently. Raising individual and team performance levels is central to this process and 360 feedbacks have been increasingly used as part of the solution. Unfortunately, there is an advancing drift toward using 360 feedbacks for performance appraisal. Organizations need to be careful here. Using 360 for appraisal may be an intriguing idea, but it's not the appropriate use of this powerful new technology. Used for appraisal purposes, It can put the organization 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 to determine results. Its' purpose is to measure and evaluate contribution to the organization in order to provide feedback, and fairly distribute rewards. Performance appraisal allows employees to more clearly see the results of their efforts, 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 encourage employees to grow and develop by providing feedback on their proficiency in the skills, competencies, behaviors, and practices related to the conduct of their
jobs. By design, it is good at identifying, measuring, and improving the skills and competencies needed to perform successfully. It is especially good for the hard-to-quantify interpersonal areas (often labeled the 'soft skills') of behaviors and 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 hired for and paid to produce. It is designed to clarify and document the goals, outcomes, milestones, time frames, and measurements to be used. Performance appraisal and employee development are separate and distinct processes with different purposes and different measurement tools. They can and do complement 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 single source, automated is faster than manual, and evaluating performance (results) is the same as measuring proficiencies (skills, competencies, etc.), then 360 feedback 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 than single source. It is broader and brings in multiple and more balanced perspectives. But inexperienced multi-source raters are generally not as adept at providing balanced and objective feedback as the single source supervisors they may be replacing. They can have enormous problems separating honest observation from personal differences and biases. For appraisal purposes, co-workers are insufficiently qualified to give evaluative feedback that affects pay and promotion.
Because 360 feedbacks are usually automated or web-based, it has what marketing people call "sizzle". But is it appropriate to performance appraisal because of its speed and ease? What is it that makes appraisal or development particularly effective? Research indicates that it is the quality of the conversation between the manager and the employee that is important. Being able to explore and discuss aspects of one's work with clarity and without the usual time pressures is highly valued by most employees. It is the quality of the interaction, the essential performance conversation that provides motivation and builds trust and loyalty.
Performance appraisal in most organizations is used to determine merit increases and bonus amounts. However, if 360 feedbacks are linked to compensation decisions, it loses its power and benefit as a developmental tool. When employees recognize that their financial rewards are based on
multi-Realizing what is required to achieve a good appraisal, employees can manipulate the process to ensure the desired outcome. The 'rate' can be helped or hurt. Putting two and two together, employees realize that "if you scratch my back, I'll scratch yours." Suspicions that were formerly directed at performance appraisal 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 a result, actual skill proficiencies can decline which, in turn, leads to a weakened ability 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 a decline in productivity and performance.
Finally, organizations using 360 feedbacks as a performance appraisal tool are exposing themselves to increased liability. 360 feedbacks is not a tested or validated mechanism for performance appraisal. An organization needs to be prudent and consistent with the standard and proven performance appraisal approaches.
Potential Dangers
Skill levels stay relatively flat or even decline because the "360 appraisal" is not taken seriously.
The numbers needed for a "good" appraisal can be informally fixed by silent agreement among raters. Maximizing the size of the increase or bonus overshadows the desire to elevate performance.
Individual development plans become window dressing. People may go through 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-workers causing a rise in the level of mistrust and apprehension. The work environment becomes politicized, candor and honesty are compromised, trust and integrity are damaged, risks are avoided, motivation diminishes, morale drops, performance declines, and turnover rises.
The Bottom Line
Executives and managers considering the use of a 360-feedback tool for performance appraisal need to be aware of the inherent differences between them. The bottom line: Keep developmental feedback separate from appraisal and compensation decisions. Using 360 feedbacks for the wrong reason can result in decreased trust, loyalty, and performance, and increased risk. Large investments of time, money, and credibility will be lost.
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 in business organizations thirty years ago. 360 did not become popular until the late 1980s, and then mostly as an executive development tool. Today, it has been introduced into most Fortune 1000 companies, and its use is spreading. It is now affordable enough to use with all employees, and it's also flexible enough to use in a variety of applications, such as team development, customer feedback and organization climate surveys.
Senior managers are intensely interested in this application, because performance appraisal has been a perennially frustrating area of human resource management. On the one hand, managers need ways to let people know how they are doing and to document individual achievements and problems. On the other hand, few organizations have set up appraisal systems that do this without creating discontent, distrust, loss of productivity and law suits.
The new 360 feedback technology is viewed by many as an intriguing solution to the problems with traditional performance appraisal. With ratings coming from many sources, evaluations can have greater validity. With on-line input systems, people can give ratings and comments quickly and conveniently. The desire to use 360 technologies for performance management is strong, even though a pattern of real-world successes and best practices has not been established.
Most managers don't understand the risks of using 360 feedbacks as a platform for performance management. Furthermore, they aren't aware that this concept is a major controversy among HR practitioners. . 360 evolved over two decades as a developmental feedback process, not as a performance appraisal process. Experts agree that computerizing an appraisal system will not correct its inherent problems. While multi-source judgments are usually superior to single-source judgments, experience has shown that linking competence data to pay and personnel decisions introduces unacceptable biases into ratings, thereby rendering the assessment system invalid.
Still, many organizations are boldly going into uncharted territory, encouraged by authors who suggest that with the right technology and know-how, they can
work around the issues. Computer programs that facilitate 360-based appraisal have appeared positioned to capitalize on an expressed need in the market. At the same time, most experts and organizations are backing away from this application.
Why? Are the dangers real? Is 360-supported performance management too good to be true? Can it be achieved with the right know-how? In the end, will the judgment of bold executives prove to be superior to the cautiousness of human resource professionals?
Using 360 feedbacks in the context of performance management involves significant risks that no prudent manager should underestimate. It's as if a dark, mysterious territory separates managers from the promised land of high-tech appraisal. But approaching this territory is like visiting a great city. The payoffs are there, but part of the journey is knowing where not to go and what not to do. Guides promise to lead the way, but a prudent traveler should make some preliminary inquiries. What's involved in this path? What are the options? What are the risks? What are the costs? How to minimize risks and obtain the maximum benefit when using individual 360 feedback in the context of performance management. The prudent path has three guideposts: (1) Link competence feedback to development decisions, (2) Link results feedback to pay and other personnel decisions, and (3) Maintain confidentiality.
Guidepost 1: Link competence feedback to development:
Using 360 successfully in performance management requires a clear understanding of what is meant by "performance."
The word performance refers to results what gets accomplished. Have individuals, teams and organizations achieved their goals? Are standards being met? Are projects completed on time? Are products and services delighting customers? Have business goals been achieved?
The word performance also means something else: competence how well people do their work. Are people knowledgeable and skilled? How effectively do they use their skills? How well do employees interact with each other? How do people treat their customers? Are procedures effective? How is the work getting done?
