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What is 360 Degree Performance Appraisal & How to Use It

What Is 360 Degree Performance Appraisal & How to Use It

The purpose of any performance appraisal is to provide an employee with adequate feedback on their performance and serve as a basis for modifying or changing their behaviour toward more effective working habits and the desired outcome.

Traditionally, performance appraisals are done by the direct supervisor of the employee. However, in the case of a 360 degree performance appraisal, also known as a multi-rater assessment, the number of appraisers increases.

What Is 360 Degree Performance Appraisal?

By definition, a 360 degree performance appraisal is a review system that draws feedback about an employee’s performance from multiple sources in addition to the employee’s line manager. Typically, other appraisers in a 360-degree review process are: 

  • A peer 
  • A direct report 
  • The employee (A self-appraisal)  
  • A customer (where applicable)  

A multi-rater appraisal process aims to provide employees and the leaders who manage them with broad insights and a better understanding of their strengths and weaknesses to help them become high performers.

As a result of the multiplicity of appraisers, a 360 degree performance appraisal is usually anonymous and confidential. When used accurately, a well-calibrated 360-degree performance review provides a high-definition feedback mirror.

However, it can be counterproductive when the process is not executed professionally. The key to using a multi-rater review process successfully is understanding its pros and cons, its obstacles, and opportunities thoroughly.  

In this article, we explore the workings of a 360-degree performance appraisal and how you can get the most out of it. 

The Pros of 360 Degree Performance Appraisal

A. The employee receives a full view of their performance.

Considering that the 360-degree review process pulls input from multiple people at various levels, insights into an employee’s performance are much broader and more diverse. 

A 360-degree performance review proves particularly helpful in cases where an employee’s manager is not effective at giving feedback. In a situation like this, the employee is not deprived of constructive feedback.

Instead, when done well, the review can bolster the employee’s self-awareness as they get a bigger and more accurate picture of their performance. 

B. Creates opportunities for open communication among employees to drive productivity in the business.

One of the most valuable benefits of the 360-degree review process is that it helps improve performance-related communication.

For example, when you encourage co-workers to offer their opinion and give and receive feedback, it helps improve open communication, thus making it easier for them to discuss performances openly. 

C. It engenders a system of accountability. 

Providing employees with a safe place to provide feedback about their superiors keeps organisational leaders accountable for their management decisions.

In addition, the 360-degree review process can uncover hidden issues, such as imbalances in how a manager assigns workloads across a team. 

The same thing applies to employees. Line managers can also benefit from feedback from other departments on how their direct reports are performing. This typically provides a broader view of their employees’ performance and helps leaders better manage and develop their teams. 

D. Greater accuracy in performance ratings. 

360 degree performance appraisals are usually more accurate than top-down performance reviews when correctly deployed. This is because rating from multiple sources reduces the chances of having one person’s error in judgment cloud the entire appraisal process.

Being assessed by managers, self, peers, and customers can paint a much more accurate picture of an employee’s performance than relying on the line manager’s singular opinion. 

The Cons of 360 Degree Performance Appraisal

A. Poorly selected appraisers might corrupt the entire appraisal process.

Furthermore, considering the anonymity of the reviewing process, people with an axe to grind might use the system to exercise payback. This completely thwarts the entire process and proves unhelpful when forming an accurate picture of an employee’s performance.

It is, therefore, crucial to carefully select reviewers with the right orientation and training to ensure constructive feedback. 

B. 360 degree performance appraisals are more demanding.

Though effective when well-calibrated, multi-rater assessments require much effort. Gathering feedback from multiple sources often translates into more time and documentation and more people contributing feedback.

This, in turn, demands more energy from HR, the absence of which can create abundant opportunities for the employees involved to react inadequately to the entire process. Some HR professionals have solved this problem by using software designed to track and organise multiple feedback. 

C. Without high-level professionalism by all raters, data from 360-degree feedback could be unreliable.

Unfortunately, research has found that most 360-degree feedback focuses far too much on the negative, with reviewers generally disregarding strengths.

This is because though done with good intent — employees want to highlight weaknesses to address them, an onslaught of negativity is not the best way to motivate and encourage employees, particularly when they are feeling vulnerable and judged.

5 Best Practices for Maximizing 360 Degree Performance Appraisals 

1. Begin at the start of the year. It is crucial to set the stage for 360-degree reviews very early in the year. The process must begin with the training of all employees (appraisers) involved in managing the process to meet expectations. 

2. Unanimously agree upon the areas for improvement and the metrics to determine if the employee has achieved the outcome. As much as possible, make the assessments quantitative rather than qualitative. This will control the degree of subjectivity and better manage employee performance expectations. 

3. Train and retrain your people to give and accept constructive feedback. Proper training forestalls many problems with the review process because it gives employees and managers alike the tools to appraise and be appraised effectively. 

4. Create mechanisms to distribute feedback correctly in both directions. To encourage professionalism in the reviewing process, put up an infrastructure that ensures that employees that appraise get feedback on their performance.

For example, even though the process is anonymous, HR must breach the confidentiality of feedback given when it’s necessary to address serious issues like harassment or bullying allegations.  

5. Review employee progress on an ongoing basis. Considering that 360-degree performance reviews solicit feedback from multiple and diverse employees, HR must take advantage of the opportunity to assess those employees who might need more training or coaching for their benefit and that of their peers.

It is also an important opportunity to identify leadership material among employees. When strong performers are identified, HR must then cross-train or reskill them not only for their benefit but also for their teammates.

This can be undertaken during monthly or quarterly check-ins to allow more real-time feedback. 

In Conclusion

In the end, the success or failure of 360 degree performance appraisals depends heavily on the examples set by the organisation’s leadership. When leaders set the right example in their delivery of objective and constructive feedback, it sets the stage for success when the reviews trickle down the organisation. 

It is crucial to remember that the main goal of performance reviews is to facilitate a productive workplace. And so, if appraisals tear employees down, it will eventually negatively impact organisational performance. 

To consolidate your 360-degree review process, don’t hesitate to contact us at Workforce Africa.