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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.

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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.

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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

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.

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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.

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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.

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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

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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.

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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

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.

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Some of the Organizations using 360 Degree Performance Appraisal are:

Reliance Industries
Maruti Udyog etc.
Wyeth Consumer Health (WCH)


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.

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360 feedbacks is simply a process for employees, management and customers

to receive…


…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.

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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:
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.


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.

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―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‖.

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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.

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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…

practice (the way you apply yourself to the task)
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
separations or transfers
guidelines to calculate effective progress in training and decisions

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A 360 degree feedback system by design should not deal with employee
Compensation decisions are one of the areas of controversy involving the
merger of 360 degree feedback and performance appraisal in evaluating job

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

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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 360 0
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.


* 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


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.
o Monetary and other rewards.

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Organizational Climate Study:

o Organizational environment improvement needs

o Changes in the Managerial approaches, leadership, etc

Customer Satisfaction Study

o Employees attitudinal change

o Customer satisfaction improvements

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(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

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

(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-
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Performance vs. Expected; Individual Item Ratings; Item Ratings-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

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.


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.
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• 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

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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.

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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.
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(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.

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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.

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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.

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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

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.

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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.

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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‘
o Comments expressed by several colleagues tend to carry weight
o Some skills are best judged by peers and staff, not by manager
o Feedback may be motivating for people who undervalue
o The wider involvement help to engender a more honest
organizational culture


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
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.

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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.

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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.

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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
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



T.Y.B.M.S Page 32


"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.

T.Y.B.M.S Page 33

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

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."
T.Y.B.M.S Page 34

Roots of the Problem

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 360-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

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

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.

T.Y.B.M.S Page 35

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

* 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

* 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.
T.Y.B.M.S Page 36

* Train people in giving and receiving feedback. Companies that implement

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

T.Y.B.M.S Page 37

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

T.Y.B.M.S Page 38

and well?) technical competence and whether an employee's behavior draws

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

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

T.Y.B.M.S Page 39

article they cite, which appeared in the January 2000. Academy of Management

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.

T.Y.B.M.S Page 40



In 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.

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

T.Y.B.M.S Page 41

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-
T.Y.B.M.S Page 42

source feedback ratings, they quickly see how the new game is played.
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.

T.Y.B.M.S Page 43

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.

T.Y.B.M.S Page 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 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

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

T.Y.B.M.S Page 45

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

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?

T.Y.B.M.S Page 46

Managing performance means managing both results and competence. Both

aspects can be measured, but they should be measured differently and

Measuring competence as the first step to self-improvement is the best use of

360 feedbacks. In this role, there are no concerns about using the results to put
someone's career or compensation in jeopardy.

It's important to keep in mind that 360 feedbacks is not the best tool for
measuring competence that is already easily quantified/measured. This
includes most technical areas. For example, why would you ask for several
people's opinions about someone's typing ability, when all you have to do is
conduct a five-minute performance test?

However, many key workplace skills and activities are exceedingly difficult to
quantify and measure. These encompass mostly the interpersonal dimension of
work: communication, team interaction, leadership, customer service,
consulting, sales, negotiation, presentation, instruction and facilitation. Because
multi-source feedback uses scaled ratings from a variety of sources on
researched areas of performance, its able to compile remarkably objective
performance data, and modern 360 administration software programs make
doing 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 accountable
for results and rewarded for achieving them. But in a desire to "pay for
performance," organizations sometimes mistakenly focus on the competence
aspect, rather than the results aspect of performance. They make this error
because of a failure to appreciate the distinction between competence and
results, and because 360 feedback makes it easier to gather competence data
than results data.

The magnitude of the error has to do with the fact that it's enormously
expensive to administer compensation programs. If the rewards don't have the
desired impact on results, this huge investment is largely misdirected.
However, executives have learned that rewarding only business results can have
unintended negative consequences.
T.Y.B.M.S Page 47

Rewarding 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 to
define outcomes that actually help an organization achieve its vision. Some
organizations overemphasize financial objectives, not appreciating that if they
don't also focus on employees and customers, the desired financial results will
eventually falter.

The key is to know which outcomes will contribute most to the organization's
success, measure them and reward their achievement. It's better to focus on
major results rather than on a comprehensive list. And it's important to specify
end outcomes, not in-process milestones. Furthermore, desired outcomes
usually involve a team effort. Therefore, team goals and team rewards are often
more appropriate than individual ones.

Most business goals are easily quantified, and effective methods for
measurement already exist. In this case, 360 assessment systems will not be
needed; 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 effective
systems already exist to compile and track this information.

However, some key results are hard to quantify. For example, how would you
measure whether a leader was taking care that creates desired business
outcomes? How do your customers feel about the way you treat them? Can be
find out by using customized customer satisfaction surveys. How do team
members feel about working in their group? You can find out using team
climate surveys. Some 360 software programs are flexible enough to
administer customized climate surveys, although it's important to keep these
surveys separate from individual development assessments. Using the results of
a baseline survey of carefully chosen leadership outcomes (such as levels of
trust, loyalty, commitment, cooperation, professional satisfaction, development,
etc.), specific results goals tied to leadership, communication, relationships and
team development can be agreed upon.

T.Y.B.M.S Page 48

To 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 specific
results 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 employees
care for elderly parents or put their children through college. Successful
organizations have learned to define what they need from people, empower
them 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 to

the validity of the information gathered. The most important way to protect
confidentiality is to limit the feedback that managers see. Coworkers may want
to give a person honest feedback, because they know that if the individual
doesn't face up to the truth, changes in behavior are unlikely. On the other
hand, coworkers don't want their ratings and comments to be seen by managers
who make personnel and pay decisions. They don't want to be responsible for
drastic career consequences. In short, they may want an individual to have
specific developmental feedback but only the individual and only for

T.Y.B.M.S Page 49

Assurances of confidentiality are based on trust, and this trust must be earned.
People may believe their managers when they are told that 360 inormation will
be safeguarded and used for development only. But if they discover that they
were misled, trust will be lost immediately and in most cases can never be
restored. This consequence would render a 360 system useless as a
development tool.

Eg:1 One division of a large communications company began using 360

feedbacks for team development. When faced with the need to "downsize,"
managers concluded that the 360 performance data would help them decide
who to keep and who to let go. When employees discovered what was
happening, they raised such a furor that the company had to abandon the use of
360 altogether.

Eg:2 A regional bank experimented with using 360 feedbacks for management
development. But the organizational climate was characterized by low trust and
internal politics, and many people feared that the data would be used for
personnel and pay decisions. As a result, several participants found ways to
avoid or sabotage the process. With the pilot program in disarray and the
expected benefits unachieved, those who opposed the program used their
influence to eliminate it.

T.Y.B.M.S Page 50

T.Y.B.M.S Page 51



Despite the fact that 360 degree appraisals are being widely
used throughout the world for appraising the performance of the
employees at all levels, many HR experts and professionals argument
against using the technique of 360 degree appraisals. The main
arguments are:

 360 performance rating system is not a validated or corroborated

technique for Performance appraisal.

 With the increase in the number of raters from one to five

(commonly), it becomes difficult to separate, calculate and eliminate
personal biasness and differences.

 It is often time consuming and difficult to analyze the information


The results can be manipulated by the employees towards their

desired ratings with the help of the raters.
The 360 degree appraisal mechanism can have a adversely effect the
motivation and the performance of the employees.
360 degree feedback – as a process- requires commitment of top
management 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 about
the process and the clarity o f the process.

Often, the process suffers because of the lack of knowledge on the

part of the participants or the raters.

T.Y.B.M.S Page 52


Although it seems like performance evaluations should be a logical and
productive part of an employee‘s development, they are often not anything
more than ignored.

Employees often consider the process biased, with unsupported ratings that do
not reflect the work they actually do. The appraisal either just pats them on the
back, or criticizes them with no workable suggestions for improvement. Their
review has become just another distraction during the annual (or less frequent)
evaluation process. On the other hand, managers for the most part aren‘t
equipped to give productive feedback; often they are afraid to provide negative
feedback because of legal threats or they do not want to adversely affect
someone‘s already small bonus; they are forced to spend hours filling out
detailed forms and looking up figures or trying to remember specifics to
evaluate their direct reports.

There is a way to do performance evaluations more effectively, a way to save

the process from becoming disregarded. Multi-rater or ―360-degree‖ appraisals
can provide an accurate and acceptable way to evaluate performance while
saving managers time and effort.

360- Degree appraisals improve on any evaluation done by one person by

combining ratings from many people who see different parts of an employee‘s
performance. For example, direct reports probably have the best understanding
of someone‘s delegating skills, while managers probably see someone‘s results-
focus most clearly. To get a complete image of performance, then, data is
gathered from others with various relationships to the employee. It often
provides an eye-opening comparison that can serve as a good starting point for
development. Gathering input from all of these points-of-view provides a fuller
picture of someone‘s performance. In simple terms, 360-degree appraisals give
a ―3-dimensional‖ performance report, whereas traditional performance
appraisals only give a ―1- dimensional‖ report.

Traditional performance appraisals often focus on goal attainment: how close

did someone come to their sales goal, or did someone meet the minimum
customer service rating. Most likely, there are only a couple of people in the
organization who have the data to answer these types of questions. Because of
this, goal-based appraisals limit the amount of input that is available for a

T.Y.B.M.S Page 53

performance appraisal. 360-degree appraisals broaden the amount of usable

input to target perceptions of an employee‘s effectiveness. This approach takes
advantage of the various relationships represented in the group of raters. So,
while typically only an employee‘s boss knows whether her/his cost-cutting
goals were met for the most recent quarter, many more people will have
perceptions of that employee‘s financial skills, diligence, fiscal responsibility,
etc–all the things necessary to reach those goals. Also, by concentrating on
competencies rather than goals, the data readily lends itself to personal

 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
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.S Page 54



The basic concept in 360 Performance Appraisal of soliciting performance

feedback 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, makes
obvious sense.
But organizations should have concerns about the 360 feedback concept in the
context of a performance appraisal. Many organizations have jumped on this
bandwagon without sufficient consideration. In looking at the 360 feedback
performance review process, please consider the following:

One -Feedback should be solicited continually:

Performance "appraisal" is better called performance "review" since it is the

closing stage of a performance management process which begins with the
clarification of performance direction and expectations. A Performance Review
is a review or comparison of actual performance during the review period, with
the past direction, and an opportunity to set future direction (reviews are also
used for formal documentation and for use in employee development,
promotion and compensation decisions). A Performance Review is never the
occasion for the employee to discover how well he's performed or to find out
what was expected of him during the review period.

The employee should be aware of that (his individual performance related to the
performance expectations) continually throughout the review period.

A Performance Review is principally between the employee and whomever the

employee is responsible and accountable to. Realistically, in most organizations
this is the "boss." At the review it would be insightful, and for some jobs
essential, to review how the employee met client and/or peer expectations.

But, the degree to which an employee meets client, supplier, peer or subordinate
expectations is not what an employee comes to a Performance Review to
discover. 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 the
review period, and then the results of this feedback activity reviewed at
Performance Review time.

T.Y.B.M.S Page 55

If knowing how others perceive you is important for the performance of your
job, then measuring that and taking appropriate action on that feedback should
be 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 or

a survey company to do for you. Do effective salespeople rely on someone else
to tell them, at year's end, whether their customers were pleased with the
service? And if relationships are so horrid that management can't get honest
feedback directly from its employees, then the real problem won't be solved by
implementing 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 ensured
and employees can comment in confidence about the performance of another
employee or the boss. Aggregate data is then given to the employee in question
and used as input to the appraisal and eventual rating of that employee.
Notwithstanding the substantial research evidence warning of the dangers
associated with peer evaluations and their low validity, basic concern about this
process can be summed up with these questions. Do you really want to have a
company with a culture that promotes the use of secret reports to assess and
judge its employees? How can your organization pretend to be open, honest and
forthright when it uses secrecy and anonymity to measure the value of
employees? Is this the way you want your business to run? Supervisors are also
frustrated 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 it
must protect against deceit and retribution, it can become self fulfilling. And as
with suggestion boxes, the anonymous survey unfortunately symbolizes that not
only do employees take a risk if they raise problems or concerns directly with
the supervisor; but also that it's not the supervisor's job to solicit such
Essentially, any employee feedback process which requires secrecy risks
damaging healthy working relationships, especially between employees and
their supervisors.

Four - You Don't Need 360 to Include Feedback

If you really want your employees to get performance feedback from the circle
of people they work with, including their customers, peers and subordinates, try
T.Y.B.M.S Page 56

the following simple process: n make "soliciting performance feedback from

significant others" a part of all employee jobs and therefore a performance
N determines what sort of feedback is required, and if possible develop tools to
capture this information; n teach employees how to use the tools (or questions)
to get feedback from their subordinates, customers, peers, etc.; n teach
employees how to give performance feedback to their supervisors, peers or
suppliers, etc. n teach employees how to make use of the feedback they receive,
and, for example how to follow-up on their subordinates and customer
concerns; n require employees to regularly review (perhaps monthly) the results
of getting feedback from others, with their own supervisor, so that the process
becomes a priority and so that employees are held accountable for doing so.

One final caution. Paying for performance results is a good idea, but think
twice before rewarding goal achievement with salary increases: (1) It's
amazingly expensive. The salary differential is awarded not just once, but every
year afterward, as long as the person is employed. In addition, if salary level is
linked to retirement pay, the extra compensation will be expended for an
undetermined number of years during retirement. (2) The incentive doesn't
have immediate impact; the full amount of the reward is distributed through
dozens upon dozens of future paychecks. (3) The incentive is only temporarily
effective. The motivation of a promised salary disappears immediately after it
is awarded.
Once a salary is increased, it is perceived as a revision of the employment
contract: fair compensation for defined levels of employment - not as a reason
to continue exceptional levels of performance. Salary increases should be
based on an established track record of achievement, when a history of
accomplishment indicates that the value of the employee in the career market
place has increased.

T.Y.B.M.S Page 57



Opening thought: We need to work smarter, not harder.

Feedback: objective information about individual or collective performance
how am I doing? How does this compare to others?

Serves 2 functions: 1) instructional 2) motivational

Three 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 does
• Self: however, there is often a self-serving bias that is used more by those with
high esteem for themselves than low. Feedback must meet certain criteria to
attain desired outcomes:

1) Desire For Feedback

• depends on self-reliance
• self-assessment ability
• preference for external information

Note: -recipients must be open to feedback

-low self-esteem, self-efficacy recipients do not often seek feedback
-high need achievers and self-monitors desire feedback

2) Perception Of Feedback (positive or negative)

Feedback can be either positive or negative and people tend to process positive
feedback much better than negative.
• negative can have more positive outcomes because are motivated to improve
• negative must be presented carefully to avoid creating insecurity and
• can damage self-efficacy

T.Y.B.M.S Page 58

3) Cognitive Evaluation Of Feedback

• accuracy, credibility of source, fairness of system, performance-reward

expectancies, 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 behavior

4) Behavioral Outcomes

Direction, effort, and persistence, and perhaps resistance --Resistance is one

outcome of feedback and one that needs to be managed. If the employee sees
the efforts as manipulative, it will lead to resistance as well other negative
actions. Nontraditional Upward Feedback and 360-Degree Feedback Tradition
has been top down feedback especially in a hierarchical structure. Newer
organizational structures are trying new approaches (such as upward feedback
and 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.S Page 59


360 feedback tools are also known as…

multi-rater feedback
multi-source assessment
multi-source feedback
full circle
group performance review

Whatever the name, the intention of the feedback should help identify the
weaknesses and strengths of the workforce. It should also contribute a plan of
action for the professional development of each individual.

Properly applied 360 feedbacks can help employees improve performance and
skills in the workplace. It can target precise information about areas employees
need 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 of

how employees and managers can improve by providing a solid plan of action.

T.Y.B.M.S Page 60


360-Appraisals, also know as ―multi-rater feedback‖ or ―peer

appraisals,‖ can create a comprehensive view of an employee‘s performance.
HRsmart‘s 360-Appraisal Solution allows managers to extend beyond
employee peers by gathering feedback from clients, vendors or others with
whom they frequently interact.

HRsmart‘s 360-Appraisal Solution provides an easy method for gathering

critical data. This strategic tool can help managers:

Gauge employee performance. Managers typically only see a piece of the

picture, but what they don‘t see can be even more telling. When feedback is
gathered from peers or outside contacts, a person‘s true value can become more
apparent. Perhaps a customer service manager goes above and beyond every
time they receive a call, or vendors receive all of the information they need on
the first inquiry.

Identify leaders. 360-Appraisals can help managers more effectively pinpoint

group leaders. Peer reviews are a great way to determine who had leadership
ability 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 are
often overlooked or hard to identify in team or group settings.

Increase employee awareness. 360 appraisals provide insight into

competencies and skills held by employees and can help employees better
understand how the behaviors and attitudes they exhibit impacts those around

T.Y.B.M.S Page 61

them. Anonymous feedback also encourages more open feedback and honestly,
particularly when direct peers and managers are involved and Human Resource

Create and manage 360 assessments. This easy-to-use system allows

appraisal owners to easily generate assessments, then quickly edit, view and
print the results. Data can be captured in an employee‘s annual performance
assessment with the option to include it in the overall rating.

HRsmart‘s 360-Appraisal solution is a core component of the Employee

Performance Management solution; however, it can be purchased as a stand-
alone application. Contact a sales representative for more information.

T.Y.B.M.S Page 62



Here is a set of guidelines for when to use 360 feedback and performance
appraisal that can help organization stay squarely on the road of increased
performance 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 due

Use 360 feedbacks to:

-. Identify, the skills, competencies, behaviors, and practices needed to

successfully 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 performance

The 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
- Measurable
2. Reward team development as well as business results
3. Empower people to achieve the goals you set
4. Reward the people who do the work:
- If it was a team effort, reward the team
- If it was an individual effort, reward the individual
5. Keep the goal-setting, tracking and reward system simple:
- Reward outstanding effort, not routine performance
- Track and reward outcomes, not process steps

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Organizations that experience success with the 360-degree feedback methods
have many environmental attributes present. Some of these are:

Organizational climate fosters individual growth

Criticisms are seen as opportunities for improvement
Proper framing of feedback method by management
Assurance that feedback will be kept confidential
Development of feedback tool based on organizational goals and values
Feedback tool includes area for comments
Brief workers, evaluators and supervisors about purpose, uses of data and
methods of survey prior to distribution of tool
Train workers in appropriate methods to give and receive feedback
Support feedback with back-up services or customized coaching


Many organizations have rushed into 360-degree feedback without laying the
foundation for success. Typical errors include:

Feedback tied to merit pay or promotions

Comments traced to individuals causing resentment between workers
Feedback not linked to organizational goals or values
Use of the feedback tool as a stand alone without follow-up
Poor implementation of 360-degree tool negatively affects motivation

Excessive numbers of surveys are required of each worker with few tangible
results provided to individuals

"There is no data it actually improves productivity, increases retention,

decreases grievances or that it is superior to forced ranking and standard
Performance Appraisal systems. It sounds good but there is no proof it works
other than a lot of companies have tried it."

T.Y.B.M.S Page 64

Report On




In a highly competitive market, organizations are facing an unprecedented pressure to raise the
bar of performance and continue to deliver to enable it leapfrog the competition. Today, a
beleaguered organization will have to slug it out in the market sweepstakes to live up to the
heightened expectations of its key stakeholders. Organizations are looking at ways and means
to operate more effectively and efficiently. American companies, after having bloodied their
hands in 70's and 80's when the US economy slid in to nadir, were always the first off the block
to come up with new approaches and methods to improve performance. One such innovative
assessment tool was 360-degree feedback. Debuted in US companies in 90's, 360-degree
appraisal has become current flavor of the season not only in US, but also in India. Widely
touted as a great development tool, 360-degree feedback is increasingly finding favour with HR
managers in Indian corporate landscape. Though 360-degree approach brings slew of
advantages in the wake of its implementation, it has its fair share of naysayers who pan it
mercilessly as a process that leaves a trial of blood both in the organization. 360 degree, if not
implemented properly can have a calamitous consequence for companies. Many experts argue
that the right culture should prevail in the organization before introducing 360-degree
approach; 360 degree involves collecting feed back about an individual from multiple sources.
The source, among others includes, an individual's superior, peers, internal and external
customers, client reports, suppliers. Self-assessment, conducted by the individual will also be
included in the exercise. To put it succinctly, the underlying objective is to find the gap
between one's own appraisal and the perception of other constituents in the 360 degree feed
back. There is no gain saying the fact that it's an excellent process. But the nub of the issue is
that it is not always successful. There is always a mad glamour among the companies to hitch
itself on to any new management fad that manages to generate quite a buzz. The fact that a
competitor is doing it is good enough reason for others to follow the suit. It all boils down to
one vital imperative- "How you do it is more important and critical than actually implementing
360 degree feed back". If 360 degree were to be implemented in a haphazard manner, the
company 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.S Page 65

making the situation muddier and murkier. Some staff will become soft target. Companies will
have to assess its state of readiness vis-à-vis 360-degree system before taking a headlong
plunge. In the light of these facts, the question that begs an answer is what makes 360-degree
appraisal difficult? Some common deficiencies in the 360-degree approach that renders it less
reliable 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 actual
performance against them. Efforts, attitude, behavior, teamwork are the few performance
metrics factored in performance evaluation. Experts feel that this cannot be a real barometer of
job performance. 360-degree feedback is a developmental tool. It is a modeled to help
employees develop by providing feedback on their expertise in the remit of skills,
Competencies and behaviors. As the employees grow and nurture their skill sets and
competencies, companies will be able to turbo-charge its performance levels. So the purpose of
360 degree and performance appraisal are different. If the organization tries to link both, then it
will be sitting on powder keg.

Architecture of 360-degree tool is polar opposite to performance evaluation

360 feedback is a good process to zero in on and measure the skills, competencies and practices
required to do a job. In fact 360 degree feedback works wonderfully well in measuring soft
skills such as emotional quotients listening skills, interpersonal skills, coaching, and
leadership.360 degree can also be adopted to identify the training needs. It can also be used to
assess the team cohesiveness and customer satisfaction. On the contrary, performance appraisal
is an evaluative process, good enough to set the standards of performance and measure the
progress made against it. So performance appraisal and development tools are different from
each other. Any attempt to dovetail 360-degree feedback into performance appraisal will have
negative implications for the company as a whole. An eminently avoidable situation.

Linking 360 degree feedback to promotion and salary decision is risk- fraught

Performance appraisal is used to decide upon salary hike and promotions. 360 degree is a
development tool. If 360 degree feed back is tied to pay hikes and promotion decisions, the
process will have the stamp of failure written all over it. If the 360-degree is linked to financial
rewards, employees can see through the larger game plan and may begin to subvert or
circumvent the system to their advantages. Some employees may get excellent ratings. Few
employees 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.S Page 66

Lack of training could spell a trouble

Giving effective feedback is a tough proposition unless the company trains all the constituents
involved in 360 degree feed back to receive and provide feedback. The process could plunge
into uncertainty; intractable conflicts among the members could crop up. To provide a
constructive feedback, people need training. Benefits will out strip the cost of training as the
feedback delivered to participants becomes more targeted. Feedback will help employees
identify a behavior that add or destroys value.

Cynicism abounds

Like a match fixing in the cricket, there can be a "fixing" in companies also, albeit of a
different kind. Raters can collude with each others to muster enough numbers to get good
ratings. Employees may treat the whole exercise with disdain, as they know that the system is
tainted 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 aggrieved
individual 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 the

Time and cost are the constraints

Time and cost associated with 360-degree feedback is a real dampener. In a bid to capture all
the 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 that
the 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. If
the boss were to have less than five sub-ordinates in the rating pool, it's easier for him to track
down 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 favorable
ratings to the superior, in order to avoid ruffling the feathers. This only obscures the picture
further. Sub-ordinate feed back can help the bosses gain insight into their own strengths and
weaknesses. The manager can never become responsive to the aspirations of his/her sub-

T.Y.B.M.S Page 67



Wyeth is one of the world‘s leading pharmaceutical and healthcare
products companies. They are research- driven, with a major focus on
developing innovative new medicines that really make a difference to people‘s
lives and address significant areas of unmet medical need.

Appraisals are getting harder! People work flexibly in projects across

the organization - everyone is busy - appraisers see less of their people. So,
when appraisal comes around, managers are inevitably less well-informed than
10 years ago. A particular problem for appraisers seems to be how results were
achieved; the person's relationships, approach and values. What was achieved
can be relatively easy to judge - results are usually much more visible.

Adding 360-degree feedback to its performance management

process gives Wyeth Consumer Healthcare insight into how staff achieve as
well as what they achieve.

The challenge

Wyeth Consumer Healthcare (WCH) wanted to improve its performance

management process but found judging some aspects of it presented a real
challenge. "Besides specific achievements, the review also records ratings of
support for the company's values of quality, integrity, respect for people,
leadership and collaboration," says Don Sibley, the household medicine
manufacturer's improvement manager, who has since moved on. "But, unlike
performance objectives, these are not tangible but embedded in relationships
and attitudes."

The programme

The company decided 360-degree feedback would strengthen the review

process by providing insights into how employees achieved, rather than just

T.Y.B.M.S Page 68

what they achieved. Over a six-month period, WCH worked with provider
Simply360 to develop a process for all 62 staff

Some managers were skeptical, so to create champions for the process, a pilot
scheme focusing on five senior and middle managers and opinion leaders was
developed. "It was important that executives showed commitment to it by using
360-degree feedback as part of their own performance management review,"
says Sibley. "If executives were excluded, the process would have lost

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 critical
feedback that might lower appraisal ratings, or that individuals might seek out
those who gave them critical feedback. At the workshops, people were able to
express those concerns, and get them resolved by reaching an understanding."

Questionnaires had to be pertinent for each level of staff and clarity was
essential. Employees negotiate with their manager who their reviewers will be
and are advised to select as broad a range as possible from people they work
with on a regular basis. They are also advised to consider choosing someone
with whom their relationship could be improved. The reviewers complete a
short online questionnaire and the results form part of the report discussed at the
review, along with their own views and those of their manager.

The results

Anecdotal evidence suggests the majority of managers and employees feel the
360-degree feedback has enhanced the review process and made it easier to
identify personal development needs. According to Sibley, the feedback has
changed the nature of performance reviews. "Reviews are no longer based on
one or two individuals' perceptions," he says. "They have become much more
open, honest discussions and, inevitably, some 360-degree reports have
challenged managers' views about their team. The relationship between
appraiser and appraised has become more equal."


Don Sibley was improvement manager at the time the process was developed.
He believes the 360-degree feedback really helped to open up a dialogue
between manager and employee, by focusing on strengths that an employee
T.Y.B.M.S Page 69

may have shown that may not have been quantifiable and therefore could have
been missed by their manager. "However, the programme has to be supported
carefully 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 development
with others. At WCH that means training at all levels so people can feel
confident their concerns are addressed. This ensures the process is transparent
and readily understood. Sophisticated tools would be difficult to understand.
Similarly, the administration process to manage the project needed thinking
through and planning. We had to allow time to make things very, very simple,"
he says."


James Watson is group brand manager, marketing. "I was aware of the concept
of 360-degree feedback but had not experienced it before," he says and admits
he found the prospect a bit nerve-racking initially. "Besides your own review
and that of your manager, you agree on three or four other people within the
company, " he explains. "You're advised to go for a broad range. It is tempting
to go for people you know you get on with who can be guaranteed to say
positive things, but it is often more productive to pick people whose reactions
you're not so sure of or who you feel are not so impressed. Last year, I benefited
from feedback from the sales division that highlighted that I needed to get out
into the field more often, as well as suggesting ways I could make their life
easier. Coming at it from the other angle as a manager myself, and reading
other people's views on my team, has given me a much wider understanding of
how staff are delivering for others and where issues of confidence lie."

What's WCH's secret? Don Sibley, their Training and Development

Manager, highlights three things…

Good 360 Feedback designs. In particular, clear questions that provides

pertinent, unambiguous feedback. And, a simple, visual feedback report
that everyone finds helpful. Don is confident that poor design creates
both ambiguities that fuel arguments and complexity that obstructs
productive discussions.

Intelligent implementation. WCH worked hard at developing their 360

Feedback process, and then introduced it carefully. Senior managers
helped shape the questionnaire, and then piloted 360 Feedback by getting
feedback themselves. Taking things step-by-step enabled several
T.Y.B.M.S Page 70

improvements - WCH discovered what worked for them. But, perhaps

more importantly, it created understanding and ownership of 360
Feedback across the business before was used in appraisal.

Clear personal objectives. If personal objectives are clear, then appraisal

is straightforward, the appraise did or didn't deliver. Clear objectives
remove doubt and debate from appraisal rating decisions, and crucially
they remove 360 Feedback results from those key decisions. Don says
clear objectives make the role of 360 Feedback straightforward - it's
about understanding performance not determining appraisal ratings. It's
not about determining appraisal ratings or pay.

360 Feedback in appraisal has been a huge success for them. An anonymous
survey of appraisers and appraises found…

Most people said 360 Feedback made it easier to discuss performance

both in terms of the company's values and the job.

68% of people described their 360 Feedback as "a fair assessment of my


Almost everyone (87%) said they gave honest feedback to others.

80% of appraises and appraisers felt 360 Feedback had enhanced their
annual appraisal.

T.Y.B.M.S Page 71


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 dream
of every HR manager.

And now qualitative factors are not just at play in the services sector, but also in
manufacturing. With cubicles giving way to open offices, the top-down
approach to employee performance appraisal is also on its way out.

One company that has set itself on course to further democratizing and opening
up its employee evaluation process is car market leader Maruti Udyog.

The company has introduced a unique 360-degree feedback system, starting

with 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 his
superiors, but also by his peers and subordinates.

"We are starting the 360-degree feedback process with employees in the top
management such as chief general managers and general managers, whose
performance will now be assessed based on feedback from their peers and
junior management employees within the same department. Till last year, their
performance was being appraised only by the Directors and the Managing
Director," says Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.

Ernst & Young, in consultation with Maruti, has listed a set of leadership
competencies that are expected in a general manager. Based on that, it has
prepared a questionnaire to which peers and subordinates can respond online.

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Although acknowledged as an effective tool for leadership development in the

West, Indian companies have been shy of introducing such a feedback system
for fear of disturbing traditional hierarchical structures.

HR consultants feel that the critical issues in implementing such a system

include assuring respondents that their feedback will remain confidential and
convincing the person receiving the feedback that this is a development tool and
not an appraisal tool. Maruti has handled this by getting E&Y and other
consultants to make detailed presentations to the senior management personnel
before the process got under way. The company has a committee of general
managers, called Human Resource Inter Divisional Committee (HRIDC), which
is 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 the
general manager. At the end of the process, he can compare his self-appraisal
with the assessment of his subordinates and peers.

One of the benefits that Maruti is hoping to get out of the 360-degree feedback
process is the sense of empowerment and importance felt by subordinates, when
they are asked to offer their feedback about their superiors. Maruti currently has
over 4,000 employees on its rolls.

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Appraisal questionnaire of 360 degree system

I/ 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?

• Assessment Centre‘s
• Balanced Scorecard
• Traditional Methods of performance appraisal?

3) What are the advantages and disadvantages of 360 degree process towards
the 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?

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9) What briefing do you have in place for the participants and observers?

10) How capable are your managers of debriefing the 360 profiles with their

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 of
management 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 overcome

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 of
conducting 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 feedback

25) How much are you using any organizational data from the 360 processes?

26) Who provides the internal administration of the system?

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27) 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 been

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?

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The popularity of 360-degree feedback is undeniable. Yet, the perceived
benefits will help the personal development of workers only in the right
organizational climate. When this method is utilized in the wrong environment,
the results can be detrimental. With close consideration and evaluation of the
environment, the decision to employ this tool, or another, should be made

360 feedbacks can be safely linked to appraisal in a performance

management system by doing the following:
1. Use individual 360 feedbacks to measure the hard-to-quantify
aspects of competence.
2. Link measurements of competence to appropriate development
activities. 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. Hold
people accountable for results.
5. Separate both processes; coordinate them in time so that they
support each other.

Many of the more conventional performance appraisal methods have often

proved unpopular with those being appraised and evaluators alike, 360 is
gaining 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 feel
that they're being treated fairly.
In addition, supervisors will feel the relief of no longer carrying the full
burden of assessing subordinate performance.
The combined effect of these outcomes should result in increased
motivation, which in turn improves performance.

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In light of this approach, the typical rationalizations that encourage linking

individual 360 feedbacks to pay and personnel decisions are remarkably

"If 360 feedbacks aren‘t linked to pay, what would motivate anyone to take it
seriously?" Most people want to remain competitive in the workplace, and they
know that feedback gives them an edge. Feedback is important to people who
want to: (1) See themselves as professionals, (2) Upgrade their skills, (3) Find
out what their coworkers already know about their weaknesses, (4) Resolve
problems they may be causing, and (5) Contribute to the team mission and its

"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 that
plague performance appraisal. Using multi-source feedback as a platform for
appraisal is like putting a new horn and side mirrors on a junk car. It's safer to
drive, but the car still needs major repairs.

From a cost viewpoint this may sound like a reasonable idea, but as I have
emphasized repeatedly, there are huge risks. The solution is to take the prudent

"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 you
familiarize people with the process, if you connect a 360 appraisal to
compensation and personnel decisions, employees will know that their
evaluations can affect a person's career and will find it insurmountably difficult
to give honest feedback and accurate ratings. When this happens, 360
feedbacks will no longer be useful for development. And since supervisors
have been challenged to give fair appraisals for decades and have not met the
challenge satisfactorily, how can anyone expect coworkers to be more

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Trust is at the core of using 360 to enhance productivity. Trust determines how
much an individual is willing to contribute for an employer. Using 360
confidentially for developmental purposes builds trust; using it to trigger pay
and other personnel decisions puts trust at risk. Why would an organization
consciously choose to jeopardize trust for the sake of convenience or

In the end, leaders are responsible for "managing" performance both

competence and results. Performance appraisal and 360 feedbacks are tools
that help leaders fulfill this responsibility powerful tool, when used with care
and good judgment.

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HR Magazine

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