The Benefits of 360-Degree Feedback
Organizations strive to develop and create the best performers. However, standard performance reviews are often lacking. Hence, many companies have turned to 360-degree feedback.
What is 360 feedback?
360-degree feedback is a method that provides an individual feedback from a variety of sources including managers, peers, and direct reports. It allows each individual to understand how their performance as an employee, peer, or staff member is viewed by the people they work with.
Many companies love the idea of 360 reviews. According to Forbes, more than 85% of fortune 500 companies use 360-degree feedback as a cornerstone of their overall leadership development.
Benefits of 360-degree feedback
1) 360-degree feedback creates a more accurate picture of employees’ performance
Receiving feedback from peers, direct reports, and managers give employees insight into their performance from all angles. In other words, it creates a better picture of an employee’s performance. It can also be an incredibly valuable tool for increasing self-awareness. In today’s workforce where employees are wanting feedback more than ever, being able to receive feedback from multiple difference sources can be great for the employees who constantly want more feedback.
2) 360-degree feedback can strengthen a team and strengthen accountability
Feedback can increase team development. Often, team members know more about each other than their manager. Hence, multi-rater feedback can increase accountability. Of course, when implementing 360-degree feedback, education/training about the importance of feedback and how to share and receive it is imperative to have employees aligned. The 360-degree feedback process (e.g., quarterly 360 review or ad lib 360 feedback) has to be well-planned and well-executed for team members to truly develop from multi-rater feedback.
3) 360-degree feedback helps reduce rater bias
A single individual providing feedback opens the door for potential biases. 360-degree feedback helps reduce some of these biases as multiple sources are providing insight into an individual’s performance. To truly minimize the most common unconscious biases in performance reviews, companies should consider implementing real-time 360-degree feedback, not just once-a-year during formal reviews.
4) 360-degree feedback offers insight into training needs
360-degree feedback helps employees (and their managers) understand their training needs. For example, employees may have excellent communication skills with their manager, but their communication skills to their peers may need practice. As the manager may not be privy to the day-to-day communication between team members, this behavior may go unnoticed by the manager. Having team members give feedback can enlighten the employee and the manager.
5) Continuous 360-degree feedback can motivate employees
360-degree feedback can act as a great motivator for employees. While many companies might only have 360-degree feedback once a year (generally during their annual performance review), having continuous, 360-degree feedback can help employees get feedback on their performance in real-time. Employees that are receiving continuous feedback can be 12.5% more productive than employees that do not. Being able to share feedback with anyone at any time can really drive an individual’s motivation to improve.
Perceived downsides of 360-feedback
1) 360-degree feedback fails to add value
If an employees receives 5 pieces of feedback reading “Great job, keep doing what you are doing!”, this is not helpful, and this feedback will not add value. If feedback is constructive, objective, and direct, 360-degree feedback will almost always add value. Creating the right education around feedback, how to share and receive it, as well as setting expectations on the quality of feedback is essential if 360-degree feedback is to be successfully implemented.
We also want to highlight that it should be integrated with your current performance management processes. Having a separate sheet or template that is disconnected from your current performance management process will make the adoption of 360-degree feedback challenging in your organization.
2) 360-degree feedback generates too much data
There will be lots of great performance data that's generated during 360-degree reviews. If you do not have a tool that helps document, analyze, and store this information, it can get overwhelming. However, this shouldn’t deter an organization from shying away from implementing 360-degree feedback. There are plenty of intuitive tools (like Pavestep) that makes storing and analyzing the data easy and effective.
3) Inexperience raters/employees are giving feedback
Allowing employees to give feedback to anyone is actually a strength…if the right education is involved. Understanding the importance of feedback and how to share and receive it is the first step to ensure that all your employees are on the same page. Many organizations may feel wary about letting a newly hired employee give feedback to a tenured manager, but this should be seen as an upside of 360-degree feedback. If the employee gives feedback on the manager's communication skills, particularly around how the manager was or wasn’t providing clear directions during onboarding, the manager should know! How is the manager going to change if his direct reports don’t let him know that they do not understand the task? Having the ability to follow-up on feedback is also important, particularly when there are disagreements in feedback or ratings.
Another concern of 360-degree feedback is the ratings. If one employee wanted to make their co-worker look poor, they may be tempted to rate them lower. Clear education on feedback can help organizations avoid this scenario. Organizations can consider making the questions open-ended where employees have to provide context around their feedback. Having a minimum character number or expected number of sentences per feedback can help drive more open and transparent conversations. We also (once again) want to stress the importance of education. If employees understand the importance of feedback, why they should be giving it, how they should be giving it, and how they should receive feedback, your team will truly benefit from 360-degree feedback. Depending on your organization, you may also want to consider dropping ratings all together (check out our previous article on performance ratings).
The aforementioned downsides of 360-degree feedback are not downsides of 360-degree feedback, but rather faults of an unsuccessful implementation. The implementation of 360-degree feedback should follow effective change management guidelines. If you are thinking of implementing 360-degree feedback at your organization, check out Pavestep. With our software and workshops, we truly help your employees embrace continuous, 360-degree feedback.