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.

HR as a Strategic Partner for Organizations of the Future

In today’s economic climate, smart companies agree people are their most important asset and one of their key competitive advantages. However; as rapid globalization continues to impact the region and Asia’s markets become increasingly bullish, the talent market is becoming increasingly competitive. As a result, HR issues form some of the greatest challenges CEO’s face today, most notably attracting and retaining the best talent, steadily improving people productivity and dealing with a diverse workforce in the midst of increasing globalization. Hence, HR today is expected to not only comprehend but also conceptualize; not only create but also innovate, not only implement but also sustain relevant strategies and contribute effectively to giving a corporation its winning edge.

Despite this, HR departments are on the whole still not considered a valuable strategic asset. After nearly 20 years of hopeful rhetoric about becoming “strategic partners” with a “seat at the table” where the business decisions that matter are made, the truth of the matter is most HR professionals aren't even close. The majority of HR executives remain, to all extent and purposes, neither strategic nor leaders.

So how does HR make the transition? In order to become more strategic, HR departments need to shift their focus from advising on how processes can be improved or technical program enhancements to addressing those people-related issues that truly impact the business.

There are nine key actions HR departments can undertake to make their role more strategic.

Align People with Strategy and Competency Building

In any organization, HR’s core objective is to improve business results through people, and this philosophy manifests itself in just about every aspect of the business. In order to play an integral part in the overall organizational strategy, you must lead change, create a shared need, shape a vision, inspire commitment, build enabling systems, monitor and demonstrate progress, and make all of this sustainable.

Empower Managers and Employees

In order to become a strategic partner to your organization, you must empower your employees, investing a sense of ownership in them, recognizing their ideas, and making them feel they are important to the organization. In order to do this you must transform your managers into the face of the company, enabling them to make HR decisions within a prescribed policy framework. HR should obviously be available for feedback and to help resolve issues, but without empowering employees and managers, you will remain stuck in the quagmire of process and policy.

Drive Leadership Development

HR is the primary architect of the development and succession plans of any organization. Your role is to guide and coordinate these plans by identifying critical leadership competencies, creating a context for leadership development, coaching managers to take up leadership positions and providing honest and frank feedback. You must help your organization nurture leadership talent by working in conjunction with other managers. HR must also sometimes take the lead in establishing partnerships with executive and mid-level managers to put in place the internal development systems, training, programs, projects, mentoring opportunities, and management review teams that make leadership development and planning a reality.

Synergize Diversity

Most progressive Best Employers have a corporate diversity policy that actively seeks to cross-pollinate people across cultures and business geographies, going far beyond merely transferring employees from one part of the world to another. These companies promote more women managers to management committees, accept and support work/life balance programs for both men and women, and at the very least, provide cross-functional exposure and movement. HR is the custodian of encouraging and fostering workplace diversity so you must encourage your organization to synergize diversity.

Retain Key Employees and Manage Attrition

Attrition rates are especially high in Asia Pacific, affected not only by people changing jobs but also careers. As such, HR’s role is to design a differential reward policy that rewards employees diversely to garner the right financial results. According to the 10th Annual India Salary Increase Survey, 84 percent of organizations linked salary increase to performance ratings, and an outstanding performer received twice salary the increase awarded to an average performer in 2005.

However, not all employees are on the lookout for a higher salary, so HR should create a performance culture that nurtures these employees. You should be helping employees develop skills at all levels, strengthening managerial capability, designing high-potential programs for key talent, formulating an effective pay strategy, driving a performance-based culture, identifying the leaders of tomorrow, designing an honest and timely communication program to address employees on their career prospects, and building senior leadership commitment.

Make Pay Communication More Transparent

In a recent interview, Alan Lafley, CEO of Proctor & Gamble, said one of the most valuable lessons he has learned during his tenure was the importance of keeping communication at “Sesame Street level”. Few employees in Asia actually understand the myriad components in their pay packets and, somewhat shockingly, even fewer are actually interested. HR must communicate and help employees understand the need for those components, working out the best possible structure to motivate them. Alternative forms of reward that are simple to administer and are constantly improved upon can contribute to creating a sense of belonging so strong that people would not dream of working anywhere else.

Achieve Post Merger and Acquisition Success

Since the late 1990s, M&A deals in Asia have grown considerably in sophistication and complexity, and an increasing number of companies are realizing that people-related issues such as cultural adaptability and an understanding of local HR policies and practices have a strong impact on the long-term success of many deals. Underestimating or failing to address basic HR challenges that arise during due diligence on any merger or acquisition leaves companies vulnerable to legal incompliance, exposed to potentially large hidden costs and undeclared expenditures, and at huge risk of loosing key employees.

Foster a High-Performance Culture

Performance management is at the heart of all HR processes; however it is becoming increasingly difficult for HR to successfully foster a high-performance culture. Some HR professionals become guilty of creating standardized solutions rather than encouraging exemplary employees, which does little to drive the business.

Hewitt’s Asia-Pacific Salary Increase Study, 2005 reveals that organizations are increasingly focused on measuring and managing performance, with 98 percent of participating organizations saying they have formal platforms for performance management and 94 percent linking salary increases to performance. According to the study, the use of variable pay as a strategic lever continues to be an important means of attracting and retaining talent, and 86 percent of participating organizations have a variable pay plan in place. The study also indicates that variable target payouts have increased across all levels.

Efficient and Effective Service Delivery

In order to focus on the more strategic initiatives and still ensure efficient service delivery, HR needs to redesign its supply chain and automate routine services. Standard services need to be decentralized in order to gain economy of scale. It is also imperative that HR departments make the necessary changes so that they own the decision-making mechanisms and not just the decision.

Even today, most HR departments limit themselves by focusing on best practices rather than results. They don’t connect employee and customer value propositions as they don’t feel they own the money spent on the people. Other barriers to excellent HR service delivery include a penchant for building greater complexity into program designs rather than convincing business leaders they'd be better served with a simpler, well-executed system. HR's textbook approach to employee development is another obstacle to successful delivery efforts. The reality is that HR professionals simply don’t know because they’ve spent far too much time perfecting activities that more progressive companies are outsourcing!

The Road Ahead

So assuming HR follows these key pointers, can they really act as strategic partners? In order for HR departments to be taken seriously as a strategic partner, it is essential that you make the quantum leap to actually behaving as a business and accepting accountability for business results. You must focus on creating and maximizing value and mitigating risks. HR can contribute greatly to the financial success of any company, but in order to do this you must be just as focused as any other department when it comes to achieving business goals.

Source: Hewitt Associates LLC India Knowledge Center

Leader vs. Ruler: Which One Are You?

When I was trying to search for "leaders vs. rulers" on Google, I found many references to governments, royalty, and the military, throughout history. But the strange thing is that none of the articles seemed to distinguish between leaders and rulers. As if leaders and rulers are the same kind of people.

They are not.

Leaders

Last week I was reading the book Tribes, by Seth Godin. In his book Seth says that never in history has it been so easy for anyone to be a leader. These days, with the use of social media, each of us is able to attract our own followers. And on Twitter, this is exactly what we're doing (quite literally). Seth explains that a crowd becomes a tribe when it has a leader that the people are following out of their own free will. And the interesting thing is that people can follow different leaders for different causes.

In software projects it is the same. Some people can take the lead on an architectural level, while some have the lead on a functional level. Still others may be the first ones to turn to when people need advice about tools or processes. A complex system does not need a single leader. In fact, I believe a cross-functional team functions best when it has multiple leaders, each with his own area(s) of interest.

Rulers

In social systems the rulers are of an entirely different breed. While leaders use the power of attraction to convince people what to do, rulers use the power of authority to tell people what to do. Ruling people's lives is the very purpose of the ruler's job. With ruling comes law-making, enforcement and sanctioning, also called the trias politica (legislature, executive, judiciary).

Unfortunately, rulers have gotten a bit of a bad name over the centuries. (Much of it deserved, by the way.) But ruling isn't all that bad. Laws, enforcement and sanctions are necessary evils, and in many social systems rulers can peacefully co-exist with leaders. For example: in any football (or soccer) match you will find leaders (one in each team) and rulers (the referees). They all play their parts in making the game work for everyone.

Are managers rulers?

There's no doubt in my mind that managers are rulers. They are (usually) the only ones with the authority to hire and fire people, and to place them in (or remove them from) teams or departments. They are able to tell people what software to use, what clothes to wear, and how much to pay for a place at the parking lot.

Are managers leaders?

This is a more interesting question. Lots of management book have been trying hard to turn managers into leaders. The last one I read was Good to Great, by Jim Collins. In his book Jim listed a 5-level hierarchy:

• Level 5 Executive: Builds enduring greatness through a paradoxical blend of personal humility and professional will.

• Level 4 Effective Leader: Catalyzes commitment to and vigorous pursuit of a clear and compelling vision, stimulating higher performance standards.

• Level 3 Manager: Organizes people and resources toward the effective and efficient pursuit of pre-determined objectives.

• Level 2 Contributing Team Member: Contributes individual capabilities to the achievement of group objectives and works effectively with others in a group setting.

• Level 1 Highly Capable Individual: Makes productive contributions through talent, knowledge, skills, and good work habits.

The problem I have with Jim's hierarchy is that it suggests a linear progression to "higher" levels (where a leader is on a "higher" level than a manager). This doesn't fit with my observations of how social networks operate.

In a software project, or any other social network, there can be many leaders, each with his or her own goals and desires. Some are taking initiatives for better architectures, some are leading the way to better user interface design, and some are guiding their followers towards better customer service, better processes, better software tools, or better coffee.

To be a leader is not the next step for managers
It is the manager's job to give room to leaders

There are thousands of leaders on Twitter, and they all have their own huge numbers of followers. But who are the managers of Twitter? Only Evan Williams, Biz Stone and Jack Dorsey are. It's their platform. It's their game. They are the referees, making the laws, enforcing them, and sanctioning, while thousands of leaders and tribes are running around trying to score.

Sure, it's ok when managers are trying to be leaders. Nothing wrong with that. Evan, Biz and Jack have a large number of followers themselves too. But they don't have the largest tribes.

Managers are on top of things, but they are not on top.

Rulers don't need to have the largest tribes themselves. Being a great ruler is hard enough already. If you think you need to be a great leader too, you're just making it hard for yourself. Referees contribute to great football/soccer games by being great rulers. They don't attempt to lead. It's not their job. They are in charge, but they are not the ones with the biggest egos.

In his presentation Step Back from Chaos Jonathan Whitty shows that managers are often not the hubs in a social network. It's the informal leaders in a network through which most of the communication flows. It's the managers' job to make sure that leadership is cultivated, and that the emerging leaders are following the rules.

So, you can be a leader, or you can be a ruler. And if you're exceptionally talented, perhaps you can be both.

Which one will you be?

By Jurgen Appelo