360 Degree Feedback- Benefits and Pitfalls

360 DEGREE FEEDBACK: BENEFITS & PITFALLS Introduction Employees usually want to receive feedback on their performance for certain reasons such as for improving their performance. DeNisi & Kluger (2000) herald that it is widely accepted that feedback is an essential component of an effective performance improvement strategy as individuals learn on the basis of receiving feedback on their performance. Moreover, performance feedback increases job satisfaction and motivation among the employees (Hackman & Oldham, 1980). 60 degree feedback is one of the tools used for providing feedback to employees. Commentators state that it is not an entirely new process and it has been in organizations in one form or the other from a long time. However, 360 degree feedback became popular only in the 1980s and was mostly used as an executive development tool at that time (Coates, 1998). There are some reasons that organizations have switched from the traditional appraisal system to the 360 degree feedback mechanism. Firstly, the focus has shifted from management skills to leadership skills (Crystal, 1994).

Moreover, due to changes in the business environment such as globalization and increase in competition, employees who felt satisfied and secure in their jobs now find themselves responsible for their career planning (Nowack, 1993). Furthermore, the transformation of organizations from having a hierarchical structure to inculcation of organizational culture has also led to the adoption of 360 degree feedback for performance management (Lepsinger and Lucia, 1998). This paper presents a review of the literature concerning 360 degree feedback in order to develop an insight into the value of 360 degree feedback for an organization.

The primary focus will be on the identification of the potential benefits and pitfalls of 360 degree feedback process and ways to avoid those pitfalls to implement 360 degree feedback process effectively. Defining 360 Degree Feedback Process There are numerous authors who propose the definition of 360 degree feedback process. Tornow (1993) observes that in a 360 degree feedback process, feedback about a target individual is solicited using a standardized instrument from significant others.

Jones and Bearley (1996) refer to 360 degree feedback as the practice of gathering and processing feedback from a number of individuals and feeding back the results to the recipients. Lepsinger and Lucia (1997) indicate that the 360 degree feedback process involves collecting perceptions about a person’s behaviour from a number of rating sources. Though different commentators define the process in a different manner, they provide a common idea about the meaning of the process.

This idea can be summarized as 360 degree feedback process also known as multi-rater feedback, multisource feedback, or multisource assessment which involves feedback from a number of sources including superiors, sub-ordinates and peers. It also includes self-assessment and sometimes feedback from customers and suppliers. It is an alternative to the single source assessments such as the upward appraisals which include feedback only from the sub-ordinates and the downward appraisals which include feedback only from the superiors.

It is used mainly for training and developmental purposes as the research suggests that it should not be used for administrative purposes but some organizations use it for making administrative decisions. Benefits of 360 Degree Feedback Process There is extensive literature on 360 degree feedback and much of it accentuates the benefits of the 360 degree feedback process. Many commentators just propose the advantages of the process while others have conducted some empirical study to support their opinion.

One of the most cited benefits is that 360 degree feedback provides individuals with a broader and more accurate view of their performance by offering feedback from varied perspectives. Bernardin, Dahmus, & Redmon (1993) report that 360 degree feedback process is more useful than a single source feedback such as upward appraisal or downward appraisal as it includes feedback from more than one source such as from sub-ordinates, peers and superiors and provides more accurate view of an employee’s performance asdifferent persons are qualified to provide feedback to an employee on different perspectives.

McCauley & Moxley (1996) also agree on this point and state that it provides a comprehensive view about an individual as different group of employees can observe an individual with regard to different perspectives. For instance, the supervisor can observe an employee only for a few hours during which the employee is likely to be at his best behaviour but the peers can observe an employee throughout his work hours which helps in getting a true picture of the employee’s performance (Milliman & Zawacki, 1994).

Thus, 360 degree feedback helps in enhancing self-awareness in an individual. On the basis of the empirical study done by McCarthy and Garavan (1999), 360 degree feedback helps a person to be aware of other people’s expectations from him and the impact of his behaviour and actions on others. This is accommodated with the availability of an opportunity to compare views of others with that of an individual’s own opinions about himself on various aspects.

This practice can be helpful in revealing something new to the individual as opposed to his own thinking. A particular opinion might be held by a variety of persons evaluating the same individual and in this way a consistent feedback cannot be ignored (McCauley &Moxley,1996). 360 degree feedback aids an employee in his self-development and thus career development by providing feedback from different sources and making the employee aware of the improvements needed for continuous growth.

Brutus, Fleenor & London (1998) highlight that 360 degree feedback helps in establishing a control system for an individual by creating baselines with the help of 360 degree feedback received initially and then comparing the subsequent feedback received with the standards to address the gaps. This provides a direction to the employees for their individual development and with the help of individual development linked to the performance standards; a contribution is made to achieve the organizational goals.

Also, it has been proven influential for motivating the employees for their self-development and thus career development by providing them valuable information (Marchese, 1995). Though 360 degree feedback has been used by organizations for a long time, there has been doubt about whether the 360 degree feedback assessments are helpful in changing the behaviour of employees and contribute towards their development.

Many studies have been conducted to find out the actual contribution of 360 degree feedback process towards an employee’s development. On the basis of the study conducted by Hazucha, Hezlett & Schneider (1993), it has been found that 360 degree feedback is an effective management development tool that has shown noticeable improvements in an individual’s skills. Moreover, over time there as an increased co-relation between the individual’s self-ratings and ratings from others which was an indicator of increased understanding of the individual regarding other’s opinions towards him. Edwards and Ewen (1996) also found that there were productivity improvements among university faculty and improved customer satisfaction ratings following the implementation of 360degree feedback. 60 degree feedback had also been perceived by the respondents of the study conducted by McCarthy and Garavan (1999) as an efficient tool which helped them to create a self-development plan with the help of the insight received from the feedback and enabled many of them to change their behaviour accordingly. With the help of contribution towards an employee’s development, 360 degree feedback process also stimulates the improvement of customer service and helps in the attainment of organizational goals as efforts are made by the employees to make improvements on the needed areas according to the feedback.

Milliman & Zawacki (1994) report that 360 degree feedback includes appraisal from a number of sources which might also include feedback from the customers due to which all the aspects of an employee’s performance are covered in the performance appraisal and an employee tends to be at his best behaviour at all the times rather than just being at his best behaviour when the supervisor is around as everyone plays a role in an employee’s performance appraisal. This is helpful in improving customer service through more efficient workforce and helps in the achievement of organizational goals. 60 degree feedback process also plays a role in creating effective relationships among employees and promoting team cohesiveness. London and Beatty (1993) suggest that 360 degree feedback helps to increase interpersonal communication between the employees and brings out some performance dimensions neglected by the organisation. In a way, it helps in building more effective relationships within an organization through increased employee involvement and solution of the problems uncovered in the process.

It is also believed that 360 degree feedback alleviates some of the deficiencies of single source assessments. Bernardin et al. (1993) suggest that a 360 degree feedback process is more useful than a single source feedback such as upward appraisal or downward appraisal as it includes feedback from more than one source such as from sub-ordinates, peers and superiors. Moreover, during the research, the managers argued that a feedback process which includes subordinate appraisal can only be clearly interpreted in the context of appraisal from other sources.

It means that an organization using sub-ordinate appraisal has to be more cautious regarding the interpretation of the feedback as feedback only from the sub-ordinates can have certain negative impacts such as the person being appraised might not get the right feedback as the subordinates might not be qualified to provide feedback on some aspects. So, such a feedback is more useful if it is incorporated into a system such as 360 degree feedback. From the above discussion, it can be observed that 360 degree feedback brings with it many benefits for the organization using it.

It provides a broader and more accurate view of the performance of the employees by offering feedback from varied perspectives as different individuals are qualified to provide feedback on different matters relating to the individual. The process helps in enhancing self-awareness by revealing the strengths and weaknesses of the person through the feedback. In a way, it helps in the individual and career development of the individual by helping him to change the required behaviours and thus contributes towards better customer service and attainment of the organizational goals.

Pitfalls of 360 Degree Feedback Process Though there are a number of advantages of 360 degree feedback, there are some problems and limitations associated with the process. One of the major drawbacks of the process is that it is time consuming and complex in its nature. London & Beatty (1993) state that in order to undertake the process, considerable amount of time and money is required for its preparation and implementation. They also state that it becomes more complex as it involves huge amount of data generation on the part of raters and then it has to be integrated and interpreted in the right way. 60 degree feedback process includes provision of feedback by an employee to a number of other employees through surveys or questionnaires and some of the questionnaires might even take as much as 40 minutes to complete (O’Reilly, 1994). Milliman & Zawacki(1994) suggest that due to the time and effort involved in a 360 degree feedback process, organizations are resistant to it and if they undertake the process they do so less frequently. Due to the complexity of the process and various other factors, here has always been a doubt regarding the accuracy, validity and reliability of the feedback. Moses, Hollenbeck, & Sorcher (1993)suggest that the feedback from a 360 degree feedback process has limited accuracy due to various factors such as the feedback is provided without reference to any particular situation or context. Also, the feedback is based on the rater’s memory and a rater might not completely remember the ratee’s past performance and might be unable to interpret the ratee’s behaviour in a correct way.

Moreover, the scoring system might contain certain discrepancies which may lead to inaccurate results. Ghorpade (2000) suggests that the feedback might be inaccurate when there is no clarity about the criteria of judgement and no opportunities for observation. Moreover, the provision of feedback requires the evaluator to recall the information related to the particular behaviour but he might provide feedback according to an overall impression of the ratee in his opinion rather than focusing on specific behaviours.

There are some rating biases and errors that may affect the validity of feedback received with the help of 360 degree feedback process. Milliman & Zawacki (1994) state that very often there tends to be an error in distribution while rating due to which some raters rate others very high which is known as “leniency” while some raters rate others too low which is known as “strictness”. Yukl &Lepsinger (1995) state another such error known as “halo error” where an individual is rated as good or poor based on his or her reputation rather than on the actual level of performance.

McGarvey & Smith (1993) highlight another source of error, “recency effect”, which results from raters giving too much weight to performance that occurred a few months before the assessment and ignoring the past performances. For example, an employee with poor performance over most of the year is still rated highly because of a project successfully completed few weeks before the appraisal. They state that recency effects often occur in organizations that do not emphasize or prioritize performance or developmental assessments.

As a 360 degree feedback process involves provision of feedback by one individual to a number of other individuals in the organization, the employees may experience survey fatigue which would have a direct impact on the accuracy of the feedback provided as the individuals might not make much effort to provide true feedback (Vinson, 1996). The contribution of 360 degree feedback towards employee development with the help of making change in their behaviours has always been impugned. Though the studies conducted by Hazucha et al. 1993) and Edwards & Ewen (1996) show that 360 degree feedback process is helpful in changing the behaviour of employees, Kaplan (1993) opposes this opinion and states that often the employees resolve to change the unwanted behaviours uncovered during the process but they do not improve or make a little improvement. He states that this might be due to a number of factors such as lack of time, lack of commitment, resistance from subordinates, lack of technical assistance or moral support and etcetera. But it might also be due to the inefficiency of the feedback to explain the problem. 60 degree feedback process is also expensive than the traditional performance management measures because of the huge amount of data generation and integration of the feedback generated through the process. Campbell (1994) approximates that 360 degree feedback is 10 times more expensive than standard reports, which usually average $10 to $25 per person. Dalton acknowledged that many companies have concluded that the 360 degree feedback process is too expensive and the daily rate for management consultants runs from $800 to $5,000, Dalton’s rate (Barnes, 2005).

But many users of the process believe that the cost of the process is worth the results attained if it is implemented effectively. There is also a risk of information distortion while providing the ratings or while interpreting them. Ghorpade (2000) argues that the individuals might distort the ratings consciously or unconsciously. They may do so unconsciously in order to preserve their self-esteem by rating themselves higher and take the credit of successful performance but blame others for the failure which is known as self-serving bias.

He also states that they may distort the ratings consciously due to feelings of friendship or animosity. On the other hand, information might be distorted at the time of interpretation as information might be perceived selectively when the opinions vary at a particular aspect (London ; Beatty, 1993). Moreover, there might be some negative consequences of the process due to certain reasons. Kaplan (1993) states that the feedback might have a bad effect on the ratees if they get negative feedback because they might be defensive or they might have learnt something unexpected about themselves.

If the organization does not assist the ratees in interpreting the feedback correctly then such feedback can create tension within the organization. Ghorpade (2000) found that normally people take into account the negative consequences of rating others which might be unpleasant future personal relations with the co-workers or reduction in competitive ranking if others are ranked relatively higher due to which the feedback becomes a prey to inaccuracy.

Furthermore, the process might increase expectations from the person being rated in terms of improvement in behaviour which might lead to increased stress for the ratee (London ; Beatty, 1993). Another challenge is that the individuals may feel threatened by the process. The managers may feel threatened if the process is new to the organization and the subordinates may feel threatened that their bosses may retaliate if they do not provide favourable feedback in an upward appraisal (London, Wohlers ; Gallagher, 1990). Moreover, Bernardin et al. 1993) found that different people are qualified to evaluate a person on different perspectives and subordinates are qualified to provide feedback to managers only on certain aspects. Due to this, if the feedback process includes evaluation of such aspects which, according to the managers, the subordinates are unqualified to provide opinion on, then the process will be discredited. Thus, it can be observed that in addition to benefiting an organization, 360 degree feedback process has various limitations. The process is time consuming, expensive and administratively complex as it involves huge amount of data generation and integration.

Moreover, the accuracy and reliability of the data has to be ensured as the ratings might be distorted unconsciously for preserving self-esteem or consciously for the fear of reduction in the relative rating and the rating may contain various errors such as leniency, strictness, halo error, recency effect, and etcetera. Also, many commentators believe that the feedback does not result in the required change in the behaviour of the employees which is a major limitation. Furthermore, the employees might also be threatened by the process due to various reasons such as unpleasant future relations or resistance to the new process.

Recommendations While the 360 degree feedback process has a number of advantages, there are some issues which limit the effectiveness of the process as discussed above. In order to address those issues some recommendations are proposed in the following discussion in order to enable organizations to successfully implement the process. One of the most important considerations while implementing 360 degree feedback process is that the purpose of the process must be linked to the organizational goals and values.

Lepsinger ; Lucia (2009) examined that if people understand the broader purpose of the initiative then they show more commitment to the development oriented activities as their individual development contributes to the achievement of the strategic goals of the organization. Due to this, the instruments used for the process must be customized specifically to the success factors that support the values and performance expectations of the organization. The participation of the senior management in the process is also crucial to its success.

Garavan, Morley, ; Flynn (1997) suggest that the process must have the support of senior management who should encourage all other managers by taking part in giving and receiving feedback. Lepsinger ; Lucia (2009) also agree with the idea and state that the management support sends a clear message to the rest of the organization regarding the importance and role of the effort in the individual and organizational development. The management support also helps to ensure the availability of resources for supporting the effort and determination of the organization to stick to the effort until its objectives are achieved.

The employees involved in the 360 degree feedback process should receive support from peers, supervisors and the organization as it has a key contribution towards the development of the individual. Atwater, Brett and Charles (2007) state that many organizations spend a lot of money for conducting the assessment during a 360 degree feedback process but they pay little attention for providing organizational support to the employees for partaking in developmental activities.

However, Maurer, Mitchell, ; Barbeite (2002) suggest that employees who perceive support for development from their supervisors and peers are more likely to participate in developmental activities and have more positive attitudes towards the use of feedback for developmental purposes. They state that supervisors can assist the employees by provision of feedback as well as resources and time to attend training while peers can be supportive by providing feedback and encouraging the use of newly acquired skills.

In order to increase assistance of supervisors for the employees, organizations should consider rewarding the supervisors for such behaviour (Hazucha et al. , 1993). The provision of organizational support must also include the integration and interpretation of the feedback for the employee by some feedback expert or his supervisor who can explain the scoring and present the results properly because many feedback instruments are complicated and if the employees don’t understand it they are not likely to act on it (Vinson, 1996).

Milliman ; Zawacki (1994) argue that the feedback received from various sources needs to be integrated carefully and interpreted in the right way. They state that generally the ratings are averaged in order to avoid the discrepancies due to some reasons such as bias and if there is some ambiguity about the feedback received then the feedback might be requested again from the same raters or the new ones in order to obtain valid feedback.

Seifert, Yukl ; McDonald (2003) examined that managers who were assisted by an executive coach for interpretation of their feedback set more specific goals, solicited more ideas for improvement from others and showed more improvement. This indicates the importance of interpretation of the feedback in the correct way. Along with the provision of organizational support, follow-up is also imperative to the success of the 360 degree feedback process. Hazucha et al. 1993) highlight that follow through on development is the most critical factor in improving one’s skills and receiving on-going coaching and feedback is helpful for monitoring progress of the employee. They also state that working with a supervisor who provides specific suggestions rather than just general supportiveness is more helpful. Furthermore, employees should develop action plans on low-scoring areas on the initial appraisal and assess their improvement in the follow-up surveys about six months later (Vinson, 1996).

Another recommendation which is commonly cited by the commentators is that the raters must be provided training for participation in the 360 degree feedback process to ensure its effectiveness. Everyone involved in the process must be made familiar with the purpose for which the results of the feedback are to be used and the impact which it will have as the research suggests that the ratings provided by the employees if the feedback is to be used for developmental purposes will differ than if the feedback is to be used for evaluation purposes (“Feedback, Feedback Everywhere.. ”, 2002). Lepsinger ; Lucia (2009) uggest that the employees should be trained as to what to observe and how to make observations with regard to the feedback to be provided in order to enhance the quality of the information to be collected with the help of the feedback. They also state that trained raters provide clearer and more detailed information which contributes towards a better understanding of the data and generation of effective development plans. In addition to training the raters, it is very important to choose the raters carefully. Milliman ; Zawacki (1994) state that rater selection is a critical component of the 360 degree feedback process.

The number of raters should be neither too high nor too low and moreover only those employees should be selected as raters who have a significant amount of interaction with the ratee in order to ensure the reliability of the feedback. Moreover, the raters must be asked to provide feedback only on those matters with which they are related and are qualified to rate the ratee. Vinson (1996) suggests that the length of time in the position of the rater must also be considered because valid feedback depends on people having worked with someone long enough to get to know them.

He states that if time on the job of the potential rater is less than six months, feedback from the person’s prior work group can serve as a benchmark for the next appraisal. While deciding the number of raters, effort must be made to prevent survey fatigue among the employees. This can be done by not usingthe process on too many employees at one time as it would result in provision of unreliable feedback due to which the organization must stagger the distribution of forms for using the process in the entire organization successfully (Vinson, 1996).

Lepsinger & Lucia (2009) suggest that the survey fatigue can be avoided by setting a maximum limit on the number of times a person can provide or receive feedback and allowing the employees to decline the provision of feedback if they get too many requests. The feedback must be anonymous and confidential in order to ensure the accuracy of data and prevent potential problems. Vinson (1996) suggests that ensuring anonymity and confidentiality of feedback helps the people to provide candid feedback.

He states that this can be done by involving enough participants in the process which would also be helpful in obtaining truthful and specific feedback. Lepsinger & Lucia (2009) also lay stress on the anonymity of feedback as they state that people are more comfortable in providing feedback anonymously especially when it is necessary to provide negative feedback as the employees do not want to compromise their working relationships. They suggest that there should be at least three raters to ensure anonymity and improve the data quality. They also state that the confidentiality of data can be improved by using a third party data provider.

Thus, in order to avoid the pitfalls of 360 degree feedback process, it must include the participation of the senior management and organizational support for motivating and encouraging other employees in the organization. It should also be linked with the organizational goals and values in order to establish a clear connection between the effort and the goals of the organization. Moreover, the employees must also be assisted by a feedback expert or their supervisor for the interpretation of the feedback so that the employees are able to form specific development plans.

Also, the ratings must be anonymous and confidential and the raters must be chosen carefully to ensure the accuracy of the feedback. In addition, it is very important to follow up the feedback so that the progress of the employees can be monitored and they can be provided with an experience of ongoing coaching. Conclusion It can be observed that the 360 degree feedback process contributes significantly to the organization using it by helping it to achieve its strategic goals through continuous development of the employees working in the organization.

The process has various other benefits but they are limited by some factors relating to the administration of the process and the quality of the feedback provided. Due to this, there is a need for careful implementation of the process by limiting the weaknesses and boosting the strengths of the process. Moreover, 360 degree feedback has to be integrated into the performance management system of the organization and it must be linked to the organizational goals and values by customizing the feedback instruments according to the success factors contributing to the attainment of strategic goals of the organization.

Another important issue to be considered is the use of the process which though has not been referred to in detail in the paper but has great importance in the effectiveness of the process. The research suggests that the process must be used only for developmental purposes and not for making administrative decisions but some companies make use of the process for administrative purposes also. Thus, 360 degree feedback process is beneficial for an organization but it needs to be implemented carefully by limiting the pitfalls of the process for it to be successful. References Atwater, L. E. , Brett, J.

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