A 360 Degree Performance Evaluation Management Essay

This paper describes a 360-degree performance evaluation and the benefits and risks associated with implementing such an appraisal method. The advantages include developing positive relationships and trust amongst managers, employees and their colleagues, team building and job satisfaction. Moreover, it examines the use of 360-degree feedback for executive appraisals as well. The risks associated with a multi-rater assessment comprise of “back-scratching” scenarios, consistent interpretation of criteria and objectives, and the backfiring of use of anonymity. The focus of the paper is on the recommended considerations for managers. In order for a 360-degree performance evaluation system to be effective, managers must take the recommending actions which involve investing time in developing the assessment, analyzing the data collect, effectively delivering feedback to employees, and avoiding burnout when completing the evaluations. Maximizing the advantages, addressing the potential risks associated with this review system, and executing the recommendations provided for managers could result in a successful utilization of this appraisal system, making the 360-degree performance management system the best choice for organizations.

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Introduction

Performance evaluations are an official interaction between managers and employees in which the manager assesses job performance and discusses in detail strengths, weaknesses and opportunities for development of the employee (Henderson, 2012). Performance reviews serve as an important part of a human resource management systems. Measuring job performance, developing leadership skills, and designing a career path are the major uses of performance appraisals (Tjosvold, 2001). Ideally, management conducts appraisals in an “objective, consistent, and fair way” (Heijden, 2004, p.493). There are different forms of appraisals that organizations may choose to employ, including, 360-degree evaluations, management by objectives and a rating scale.

A 360-degree evaluations (sometimes referred to as 360-degree feedback), utilizes input from oneself, colleagues, subordinates, and customers, as well as managerial feedback to complete the appraisal of job performance. The philosophy behind gaining feedback from a self-assessment and a variety of additional sources is to provide the employee with a clear depiction of whether or not job performance is meeting the company objectives. The Esso Research and Engineering Company (now a part of Exxon Mobil) first used these evaluations in the 1950s (Vukoitch, 2010). This type of appraisal has become more popular over the years because companies have acknowledged that multiple perspectives can have an indispensable effect of the development of personnel (Warech, 1998). Today, ninety percent of Fortune 500 companies use a version of a 360-degree appraisal. Forty percent of companies were using the model in 1995 and by 2000; nearly 65 percent of companies were utilizing it (Vukoitch, 2010).

There are several advantages for organizations in utilizing a 360-degree evaluation system. An organization will reap the benefits of the 360-degree performance management when the reviews are conducted accurately and effectively. For the organization to see the benefits they must make sure they proactively concentrate on the following steps:

Measuring the correct skills, relying on practical research to determine which leaderships skills are necessary for high-quality job performance

Thoroughly explain the appraisal to all persons involved in the process

Reiterate that all responses will be anonymous

Focus on identifying strengths and opportunities rather than exposing and concentrating on weaknesses

Use the results to create a development plan (Zenger, 2012).

Advantages

Applying the above-mentioned actions will foster positive results of the 360-evaluation within the business. With a traditional review, employees can perceive a condescending under-tone from their supervisor. A 360-degree approach promotes trusting relationships amongst all parties involved. Employees are dedicated to being honest about performance and relaying information pertinent to the growth of team members. The review reveals to individuals a “complete and objective picture of how they are viewed by others” (Frankel, 1997, p.42). The theory is if more than one person

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sees an action (whether positive or negative), that is affecting performance that the action must be a reliable depiction of performance. Moreover, working together on appraisals promotes team building where in which all team members are responsible for helping each other grow and achieve high-quality execution of roles and responsibilities (Frankel, 1997).

Another advantage of the 360-degree feedback model is that this type of evaluation provides adequate data to complete an appraisal of executives. In most instances, executive performance is based on the success/failure of the overall company. However, with 360, subordinate can evaluate the soft skills of executives by having subordinates “provide feedback without the fear of retribution” (Ingram, 2012, para.4). The review assesses team-building skills, people skills and customer satisfaction all of which are important for the success of upper management (Salunke, 2010). The development of management is crucial to the success of the business because they must be prepared step out of their comfort zone in order for the organization to rise to the top of their industry.

Organizations also benefit by using of 360-degree performance management because this performance management system fosters employee satisfaction and high employee morale “simply by assessing their supervisors” (Ingram, 2012, para.5). Employees show satisfaction with the review process because they have had the opportunity to give their opinions and discuss specific feedback (Tjosvold, 2001).

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Having a voice in the company to promote positive change increases employee fulfillment and thus creates long-term employee loyalty (Ingram, 2012).

Disadvantages

Although, when implemented correctly a 360-degree performance evaluation can be advantageous for an organization, there are also disadvantages associated with the process. Organization culture has a significant impact on the success of a 360-degree approach to performance management. If the company does not promote team building and collaboration then the results of such a process can be damaging to the company (Linman, 2012). In an “out for yourself” (Frisch, 2012, p.7) work environment, providing anonymous feedback can become a chance to retaliate against managers and colleagues.

The anonymity of the feedback can fail because of participants supplying false information about the performance of management or colleagues. This could reveal inflated or deflated marks for an individual who does not deserve such a rating. For instance, in a sample of four subordinates, one extremely high/low score can considerably raise/lower the overall evaluation of an employee. The outcome of an evaluation in which, if you scratch my back, I will scratch yours, is not a valid or reliable indication of performance. Such a review could cause the company to over/under compensate employees or formulate an incorrect career path (Frisch, 2012).

A 360-degree assessment is reliant upon an interpretation of criteria and objectives by all employees. The organization is measuring performance against these

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objectives and criteria. It is nearly impossible for each employee to interpret and comprehend the criteria for providing feedback in the exact same way. Different translations result in participants observing and reporting feedback inconsistent with the objectives. Furthermore, people innately develop biases and stereotypes to help them bring order to their world. These stereotypes are exhibited when conducting evaluations of organizational personnel (Heijden, 2004). In either case, the results of the performance evaluation are invalid and unreliable and managers find ways to protect themselves against the inference of interpretation of objectives. This becomes a larger problem when compensation and career paths/promotions are decided based on the evaluation (Frisch, 2012).

Recommendations

Taking the right precautions can determine the success of utilizing a 360-degree performance evaluation system in the organization. Being committed to the process can help minimize the disadvantages of this form of appraisal. Management, with the help of HR, should make sure that performance evaluations adequately reflect the objectives outline by the organization. If the performance evaluation does not measure competencies that are consistent with the mission and goals of the organization then the appraisal is not effective. Development of valid and reliable assessment is as crucial to the success of the performance management system.

In order to receive the best results, managers must take the time necessary to train adequately all personnel on the process of the 360-degree evaluation and the

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correct interpretation of each objectifying question. (Gluck, 2012). “Failure to properly train a feedback provider will most likely result in inaccurate results or a total failure of the process to produce relevant information (Gluck, 2012, para.6). Moreover, it is recommended that participating assessors be chosen by an outside human resources representative or an outside company to minimize the risk of back scratching in the process (Gluck, 2012).

Additionally, management should consider the possibility of burnout from the evaluators. When evaluators have to complete many reviews in a short period, for instance year-end reviews for twenty or more employees/colleagues the weight can become agonizing. It is possible for these assessors to experience fatigue, which can interfere with their perceptions and influence the way in which they observe or interpret performance. Proper planning by management is recommended to avoid such interruptions in the evaluation process (Vukotich, 2010).

Investing time in developing the review and training evaluator are just as important as dedicating time to the analysis of the feedback received from the assessors. It is recommended that managers should “spend more time analyzing the exact meaning or nature of data on competencies emerging from the 360-degree feedback methodology” (Heijden, 2004, p.504). Failure to analyze properly the data received, managers may devise a highly developed analysis without have an understanding of the “nature of perceptions or occupational expertise” of the assessor and the individual being assessed (Heijden, 2004, p.504).

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Lastly, once managers have completed a detailed interpretation of the data received, they should be able to provide effectively the employee with the feedback from the 360-degree evaluation. Being able to deliver the feedback is a specialized skill that managers must strive to perfect. Diane Alexander, from the University of Rhode Island suggests that managers should act as “feedback coaches” when delivering reviews to employees (2006, p.4). A feedback coach should be familiar with the range of responses generated by a performance review. The coach is able to handle and help the employee handle a range of reactions appropriately. It is their responsibility to interpret the assessment, have an open conversation with the employee, coach them so they can understand the feedback, and apply it to their work performance. Alexander also recommends that during the coaching sessions managers strive to help the employees:

Look internally to examine behaviors that are causing the feedback

Reflect on their relations with co-workers, managers, key personnel

Examine their self-assessment vs. personnel feedback

Be honest about the development they need to succeed (Alexander, 2006).

A 360-degree review can affect the behavior of the evaluated employees. The ideal outcome is that employees understand their strengths are willing to improve upon their weaknesses. However, managers should consider the theory of Emotional Intelligence when dealing with how employees will respond to 360-degree feedback.

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This theory addresses how individual respond to the emotions created by the feedback. Feedback can trigger certain emotions that cause individuals to react differently. Some people have the Emotional Intelligence Skills to control fear, anger and anxiety associated with the feedback. Others cannot manage those emotions and thus react negatively and lower the quality of their performance (Alexander, 2006). Managers should be able to foster positive behaviors will help the evaluation feedback to be accepted and addressed by the employee without resentment from the evaluator.

Conclusion

A 360-degree evaluation can supply the organization with invaluable information to measure the performance of its employees by taking the steps mentioned above and addressing the risks before implementation. It is crucial for HR and all levels of management to communicate the expectations of each person employed so that they can focus on their individual performance as it related to their job duties and responsibilities. If the organization shares the intentions of using a 360-degree evaluation and thoroughly explains the process, outcomes, and implications of this performance management system, then all employees will be aware of the objective of this process. For an ideal outcome, the 360-degree model should be linked “to the larger organizational strategies, such as succession planning, and career development, ensures that the monies spent demonstrate a positive return on investment” (Vukotich, 201, p.29). The process of assessing job performance is only the beginning of the development process of ensuring the company has the right people, with the right skills,

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in the right positions performing duties that will help the organization succeed at accomplishing objectives aligned with its mission and vision.