What You Might Not Know About 360-Degree Reviews

The use of 360-degree performance reviews as a key tool in performance management has increased significantly in recent years. Despite its growing popularity, some people remain unfamiliar with the 360-degree assessments and don’t understand how it works. Read on to learn more.

Also known as “multi-source feedback” and “multi-source assessment,” the 360-degree feedback review is designed to provide a more holistic approach to performance reviews by collecting performance information from a wide range of stakeholders, such as co-worker peers, subordinates, customers, suppliers, and managers, as well as the person being reviewed. This contrasts with the traditional hierarchal approach in which performance review input is provided by the supervisory manager or other upper echelon management.

360-Degree Style Reviews First Used by Military

The first known use of such multiple-source feedback was by the U.S. military during World War I, and the German military during World War II. Both relied on the 360-degree-style reviews to make decisions on compensation and promotions, but unlike the system used by the U.S., the Germans included feedback from subordinates as part of their process.

While some businesses may have tried the concept back then, the earliest known record of a company utilizing 360-degree reviews was from the Esso Research and Engineering (now part of Exxon) Company in the 1950s. The Esso Company’s use of the tool was not widely adopted by other companies over the ensuing years, but the concept became known and understood by human resource professional organizations and departments. Its biggest limitation was in collecting, collating, and then analyzing the disparate feedback, which, because it was all done on paper, was considered by many as too time-consuming and difficult to organize. With the rise of the Internet, and its ability to foster easy-to-use web-based surveys, interest in the 360-degree feedback review took off, and today many companies utilize some form of multi-source feedback.

Advantages of the 360-Degree Review

Human resources practitioners believe that the 360-degree feedback review works best for employees at the middle and senior levels. Any advantages of using it for lower-level employees may be limited due to a narrower range of stakeholder reviewers. Among the potential benefits of using the 360-degree feedback tool are:
• A mixture of feedback believed to provide a more accurate assessment.
• Offers a more comprehensive view of employee performance.
• Peer feedback is believed to help strengthen employee self-development.
• Fosters organizational trust when all members of a group are participating.
• Encourages employee responsibility in their customer, peer and subordinate relations.
• Feedback can enhance motivation.
• Similar input from multiple sources can steer needed changes.

Less Can Be More with 360-Degree Feedback

While 360-degree feedback offers meaningful insights and provides a measurement tool that can help with important personnel decisions, it can also prove problematic if not handled correctly. Perhaps the biggest mistake a company can make with their use is in trying to steer behavior rather than assess and improve skills. Psychologists and sociologists know that most people resist believing perceptions about themselves that do not conform to their own self-perception. Thus, companies expecting to use 360-degree feedback as a means of significantly changing employee behavior are typically disappointed with the results.

An important related point is that too much information from a 360-degree review can be overwhelming or otherwise unwieldy. Too much information can prove confusing, limit the effectiveness of the review, and complicate the prioritization of assessment results. It also makes it more difficult to focus on any desired skillset or behavioral improvements.

Therefore, when choosing a 360-degree review, or designing one, keep it as simple as possible, and instead of using it specifically to rate, consider it as a means to guide. One means of keeping it simple is to focus it on the top three to five most important skillsets and/or managerial behaviors. This should be enough for assessment purposes, and, if utilized correctly with specific guidance to the employee, can help drive desired changes.

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