Sunday, July 5, 2009

360 Degree Performance Apprasials

It was started in mid-eighties at the Indian Institute of Management, Ahmedabad by T.V.Rao and team as Top Management Styles And Organization Effectiveness Program. It was not branded as 360 Degree Appraisal. Once it was branded in the US as 360 Degree Appraisal, it caught the attention of many corporations and today a large number of companies use it in some form or the other. Experiences with it as a development tool have been good, though experience as an appraisal tool are mixed.

360 Degree Feedback is a Multi-Rater Feedback System. In this system the candidate is assessed by a number of assessors including his boss, direct reports, colleagues, internal customers and some times external customers. The assessment is made on a questionnaire specially designed to measure leadership styles, managerial qualities, impact and other behaviors considered critical for performance.

While the 360-degree concept has much to offer and many a success have been documented there are also stories of confusion and disappointment. Many of the 360-degree programs are carried out in the absence of a strategic context, and fail to focus on contributions that they can make to a firm's competitive advantage. There is little consistency to what is being done, and 360-degree feedback programs can range from any deviations from the traditional vertical form of performance appraisal to highly sophisticated feedback systems that systematically gather, analyze, and disseminate behavior data to managers, professionals, and even rank-and-file workers functioning in teams.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the “on-the-job” performance of the employee.

The recipient is encouraged to use the feedback to improve performance and to make a greater effort to blend his or her contributions with the needs of the group. This linking of individual performance with feedback from all relevant constituencies fits well into the emerging team-based workplace. Another difference from traditional performance appraisal is that 360-degree feedback is supposed to be given anonymously. Study has demonstrated that anonymous feedback is more honest and closer to what raters actually feel about the feedback recipients. Appraisers whose identity is known to the feedback recipients give higher ratings than those who are anonymous.

360 degree appraisal has four integral components:
  1. Self appraisal
  2. Superior’s appraisal
  3. Subordinate’s appraisal
  4. Peer appraisal.
Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a 360-degree review of the employees’ performance and is considered to be one of the most credible performance appraisal methods.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance. Superior’s appraisal forms the traditional part of the 360 degree appraisal where the employees’ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior’s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees’ abilities to work in a team, co-operation and sensitivity towards others.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say half - yearly) it helps to keep a track of the changes others’ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals. Some of the Indian organizations following it are Wipro, Infosys, and Reliance Industries etc.

Benefits of 360 Degree feedback
  1. Benefits To The Organization:
    • It provides a more objective and acceptable feedback.
    • Very effective for developing leadership and other competencies considered critical for performing various Leadership and Managerial roles effectively.
    • Serves as a team-building tool as it is more involving and participative.
    • Promotes a culture of openness.
    • Promotes total quality with emphasis on internal and external customer orientation.
    • Results in better quality of HR decisions for training and rewards.
    • Helps in identification of competency gaps and planning development interventions.

      It is a good supplement to normal appraisals but not a substitute to them.

  2. Benefits To The Individual:
    • Serves as a team-building tool as it is more involving and participative.
    • Helps to ascertain if your impact on others within the organization is in the desired manner/direction.
    • Enhances self-awareness.
    • Helps discover strengths, weaknesses and blind spots.
    • Provides direction for change and development.
    • Focuses attention on actions and behaviors valued by others; thereby improving work relations.
    • Helps discover areas where you have not yet made a significant impact.
Many organizations adopt 360-degree feedback without clearly defining the mission and the scope of the program. Consequently, employees who receive the feedback are left to figure out for themselves how to cope with the results and tend not to develop goals and action plans following 360-degree applications. One study concluded that while such programs are popular, in many cases little more than lip service is paid to them. Furthermore, there is discouraging evidence regarding the effectiveness of feedback-intervention programs as tools in bringing about improvements in performance. A review of over 600 feedback studies found that only one-third reported improvements in performance. Another third reported negative changes in performance, while the final third reported no impact. In their haste to gain the advertised benefits of 360-degree feedback, organizations may not be sufficiently aware of the problems that often accompany its adoption. Failure to recognize the problems that often occur can lead to disillusionment, reduce the value of the exercise, and confirm the lip service that tends to be paid to 360-degree results.

Future Prospects & Recommendations

360-degree feedback is powerful because it makes it easy to gather and report credible feedback about important issues that are otherwise hard to quantify. Like any powerful tool, it needs to be used with care in order to derive all the benefits. Here are seven recommendations for avoiding problems.

  1. Learn about the technology before you invest in it. 360 feedback is changing as rapidly as hardware and software systems are changing. Much is possible now that wasn't dreamed of a decade ago. Innovations in 360-degree systems such as 20/20 Insight GOLD have made feedback easier, more accessible, more affordable, more flexible and more versatile than ever. Not all 360-feedback publishers are innovating at the same pace or in the same direction. This creates a challenge for the prospective user who is learning about feedback options. However, a thorough, up-to-date review of what's available now will ensure that you get the maximum capability for the least investment.

  2. Make sure that organization is prepared for 360-degree feedback. Readiness can be improved by addressing the following areas:

    • The climate of trust
    • Organizational stability
    • Feedback practices
    • Development practices
    • Awareness and acceptance of 360 feedback
    • Availability of computers

  3. Use well-researched, well-constructed survey items. A 360-degree assessment is only as effective as the items that make up the survey. The best surveys are carefully constructed and locally validated. This is challenge is made easy by customizable survey platforms such as 20/20 Insight GOLD.

  4. Protect confidentiality. People are willing to give honest feedback if they believe that doing so will benefit them and the people receiving it. You should establish policies and procedures that keep ratings anonymous and give supervisors only the summary data they need to help direct reports improve performance—and no more.

  5. Use skilled facilitators. When people receive 360-degree feedback the first time, they often need help sorting through, accepting, understanding and making use of the information. People who have experience making this process successful should lead these meetings.

  6. Follow up. Don't make the mistake of thinking that 360 feedback alone will improve performance. It can focus on priority development needs and produce strong motivation to change in many people, but individual development planning; coaching and empowerment of developmental activities are essential.

  7. Separate developmental feedback from personnel and compensation decisions. 360 are best used for measuring the hard-to-quantify aspects of work, such as interpersonal skills. Reward systems are expensive, so they're best applied to reinforce desired results. It's a mistake to apply rewards to the work processes rather than work outcomes. Follow developmental feedback with developmental initiatives, not rewards.
On the other hand, interpersonal behaviors (e.g., leadership, team interaction, communication, sales, service, negotiation and instruction) aren't easily quantified or measured. The best way to get objective data about this aspect of performance is 360-degree feedback.

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