360-degree feedback
360-degree feedback is an employee evaluation method that gathers assessments from various sources, including coworkers, managers, and sometimes clients, to provide a comprehensive view of an individual's performance. This multi-rater feedback system involves respondents answering a series of questions regarding the employee's competencies, with responses typically recorded anonymously. The final report combines these evaluations with the employee's self-assessment, offering insights into their strengths and areas for improvement.
Originating in military evaluations during World War I, the practice found its way into corporate settings in the 1950s and gained popularity through companies like General Electric in the 1980s. By the early 21st century, a significant majority of Fortune 500 companies were utilizing this method. While the process can facilitate personal and professional growth, it also carries potential risks, such as causing conflict or lowering employee morale if not implemented thoughtfully. For effective use, management should actively engage in the process and maintain confidentiality to foster a constructive environment. The design of the feedback questionnaire is crucial, with a recommendation for clear, simple questions to ensure meaningful responses and reduce evaluative bias.
360-degree feedback
A 360-degree feedback system is an employee evaluation method that relies on assessments from coworkers, management, and other sources to rate an individual's work performance. The process, also called multi-rater feedback or multi-source feedback, requires respondents to answer a series of questions relating to the employee's competency in the workplace. The answers are recorded anonymously and combined with the subject's self-evaluation in a final report. Ideally, 360-degree feedback can be used to recognize an employee's strengths and weaknesses, and is one element of the evaluation process. Employers who use the method incorrectly, however, risk causing conflict, anger, and lowering morale among employees. The roots of the process date back to World War I and World War II, although it was first used in a business environment in the 1950s. By the twenty-first century, it was estimated that 90 percent of Fortune 500 companies used the 360-degree feedback process.
Brief History
The United States military used an early type of 360-degree feedback during World War I to evaluate personnel for compensation and promotions. While the method used feedback from superiors and peers, it did not incorporate information from lower-ranking personnel. The German military was the first organization to use a true form of 360-degree feedback, gathering information from superiors, peers, and subordinates to evaluate an officer's performance.
The earliest known use of the practice in the business world was by the Esso Research and Engineering Company in the 1950s. Esso, which eventually merged into the energy giant ExxonMobil, instituted a program called "rate your supervisor," which asked subordinates to provide input on the strengths and weaknesses of their superiors' managerial techniques. The idea slowly caught on among businesses and became more widespread in the 1980s. One of the most notable examples was General Electric, which implemented a 360-degree feedback program as part of its restructuring efforts. GE claimed the method helped increase its efficiency and shareholder value, and the reviews were used to weed out the company's underperforming employees.
The evaluation method grew in popularity, and online surveys replaced the more time-consuming written versions of the reports. Prior to 1996, the process went by a number of different names until authors and business consultants Mark R. Edwards and Ann J. Ewen coined the term 360-degree feedback. In 2013, the business consulting firm 3D Group estimated that about 55 percent of companies in the United States used some form of 360-degree feedback. According to Fortune magazine, about 90 percent of companies in the Fortune 500 used the system as of 2009. The Fortune 500 is a list of the top US companies ranked according to revenue by the magazine.
Overview
The questions and formats of the 360-degree feedback system vary by organization. The person being evaluated is typically required to answer a series of questions rating his or her performance on the job. A group ranging anywhere from six to twelve of the employee's coworkers, managers, subordinates, and possibly clients are also asked to appraise the employee's capabilities by answering the same questions. The replies are to be kept confidential. The questionnaire is usually administered online with respondents asked to score the subject on a rating scale and provide written comments when requested. Examples of survey questions may include rating the subject's organizational skills, how well the subject works as part of a team, how well the subject focuses on clients, or how he or she balances personal success with team success.
The results are usually tabulated by a third party, such as a business consulting firm, and distributed to the employee and any relevant managers. The report breaks down the scores by category, such as the responses from managers, peers, subordinates, and self-evaluation. The 360-degree feedback report is not intended to be the sole tool used to evaluate an employee. It is designed to be a measure of how employees and those around them view their performance. It does not indicate how well an employee meets specific job requirements. The idea of 360-degree feedback is to highlight areas of concern and provide a means for employees and management to create a plan focusing on maintaining strengths and improving weaknesses.
Proponents of 360-degree feedback insist that surveys should be tailored toward employee capabilities and trends that affect company needs, rather than asking vague questions better suited for personality profiles. Individuals selected to rate a subject should have worked at the company long enough to be familiar with the employee's job performance, and their comments should focus on being constructive and avoid being too personal. For the system to be successful, management must also take an active role in the process and follow up with the employee to implement a plan for improvement. Some business experts advise employers to consult with their employees at regular intervals for several years to ensure the goals of the plan are being kept.
Confidentiality in 360-degree feedback is considered essential for the success of the process. Negative feedback in a report may cause dissention and anger in the company, resulting in lower morale, loss of trust, and declining production in the end. Some business experts suggest tailoring the questions to avoid a numbered rating scale, as respondents often have different criteria for what qualities deserve high marks. They recommend phrasing the questions with simple responses, such as "the employee can improve by doing more, less, or continuing his or her current effort." Simplifying the feedback survey also helps keep costs down and maintains company efficiency, as respondents do not have to devote much work time to the evaluation process.
Bibliography
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