Performance reviews of some kind or another have become a standard at businesses of every size and across industries. Whether this takes place as a formal annual review associated with a pay raise or bonus or is a part of ongoing status check-ins with employees, feedback about employee performance is key to good managerial relationships and employee morale and productivity.
There are several kinds of performance appraisal methods, and the one that works for your organization will depend on your goals and your culture. One style, called a 360-degree review process, has become a popular way for modern businesses to assess their employees and provide well-rounded performance feedback.
Here’s what to know about the process of 360-degree performance appraisal.
Custom Insight defines 360-degree feedback as “a system or process in which employees receive confidential, anonymous feedback from the people who work around them. This typically includes the employee’s manager, peers, and direct reports. A mixture of about eight to twelve people fills out an anonymous online feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask raters to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms.”
The steps for the process of 360-degree performance appraisal
The steps for HR look like this:
1. Plan
The purpose of using a 360-degree performance reviews needs to be rooted in personal and professional development. That means when you’re creating your assessments, you’re choosing questions and asking responses about the right criteria.
2. Choose raters and send out formats
Anyone chosen to participate in the review process should be reminded that their feedback is confidential and anonymous. Companies should make sure they choose enough participants to ensure anonymity. McQuaig notes that feedback should include “at least 1 Superior, 2–4 Peers and 4–6 Direct Reports. If you’re using a 360 feedback tool that segments participants based on role, keep in mind that a single participant in one of those roles won’t be anonymous – if there’s only one Superior participating, for example, everyone’s going to know what their feedback was.” Many companies also choose to have their employees weigh in on who will be conducting the review. After the assessments are sent out, it’s important to track the return of the feedback so that it doesn’t hold up the review process.
What are some of the pros and cons of the 360-degree performance appraisal?
While the process of 360-degree performance appraisal is straightforward and cohesive, there are benefits and potential pitfalls of using it in your business.
Pros:
- 360-degree performance appraisals help employees understand and recognize their strengths and weaknesses across their interactions with the business as a whole. With more feedback, employees understand how to be more effective in their current roles.
- 360-degree feedback can work for reviewing anyone in the company, including managers.
- 360 reviews are a good tool for seeing employee patterns. Maybe several people gave feedback that indicated that the employee was lacking in communication or very good at meeting deadlines. Whatever the feedback says gives managers and HR the information they need to direct employees towards goals, training, and reward.
- It’s a good tool for measuring behaviors and overall competencies, as well as understanding an employee’s interdepartmental relationships. Sometimes employees feel like they’re not a part of the bigger business because they are focused on supervisor-only feedback.
Cons:
- 360-degree reviews should not be used to measure strictly objective things such as attendance, sales quotas, etc. This makes 360 reviews a better tool to be used in conjunction with another review process focused more on goal completion for some businesses.
- Most businesses want to maintain the anonymity of the employees who are giving feedback. For inexperienced companies, this can be more challenging. It’s also not always a great tool for small businesses, as there might not be enough internal feedback to create a meaningful review.
- SHRM believes that 360-degree reviews are “a snapshot. … Performance should be examined continuously, and a 360 is usually focused at a point in time.” This means they should always be used with continuous performance management systems.
The process of 360-degree performance appraisal has significant benefits in ensuring a more well-rounded set of feedback; it also helps to inform personal and professional potential and growth within employees. It’s not a particularly strong tool for reviewing hard skills and technical aptitude or being used as the singular tool to decide promotions and raises, but it can help to shape information regarding overall employee performance.
