360 degree feedback: the pros and cons you should know

4 of July, 2022

A 360 degree feedback is a structured assessment process by which every employee in an organization receives feedback from many “raters”. Raters respond to a variety of standardized questions evaluating competencies in behavioral terms. The employee often provides self-evaluation as well to make a full circle. The feedback from the exercise uncovers organizational shortcomings and lead to individual self-development. This helps the advancement of the employees career and benefits the company at the same time. Keep reading and find out the pros and cons of implementing a 360 degree review at your company.  

How does 360-degree feedback work?

The raters may include line managers, subordinates or customers for feedback. The feedback is anonymous and, in theory, for purely developmental purposes; not linked to promotion and reward. The series of ratings and scores on a numerical scale indicate the areas of strengths and opportunities to work on.

HRM’s have many choices when selecting performance evaluation tools. Corporate America fell in love with them. Close to 90% of Fortune 500 consistently endorse its use, despite its staggering cost and administrative complexities. After all, a system that runs for HR frees management from having to deliver negative feedback.

360 degree review: the good

As corporate buzz has it, 360 degree reviews provide comprehensive feedback for each employee with all manner of benefits. When well run, there is considerable literature recommending it. But that means ensuring that the questionnaire is well designed, the assessment sound, and the evaluation and follow-up led by a trained coach in 360 degree feedback. A 360 degree program that is well-run can build effective teams. They can also serve as a reliable tool to identify areas of improvement to achieve career success.

The 360 degree feedback has other features recommended to HR managers. A company using different feedback methods has complete picture of how well employees work together. All within the company’s culture, mission and strategic objectives. 360 degree assessment is in sum a stress-test of the company’s vision of itself connected with its overall strategic aims; direction and a measure of its accomplishments. Highlighting also areas in need of improvement at the corporate and employee levels equally.

360 feedback: the bad

After working in online teams throughout the pandemic, alarming reports mentioned the reluctance of employees to return to the office. This means that any performance assessment tool needs to be questioned, recalibrated or abandoned entirely in our fast-changing work environment.

Any type of employee review can be costly to an organization in money and HR resources. But none equal 360 reviews in time and needed resources. It may be that at a time when Fortune 500 companies thrived and sought to outdo each other. As an innovative model, great sums could be spent on such programs as 360 degree feedback, with impressive results. It is likely that today the 360 reports will simply be like good and bad marks on test results, leading inevitably to mistrust; sadness, anger, rejection and finally employees working demoralized or quitting altogether. 

This is not a way to build great workplace teams. Worse, 360 degree feedback ceases to be a benefit of the employee’s self-development in alignment with the employer’s corporate strategy. When 360 degree feedback instead links to promotion and pay in annual evaluations, things can really turn ugly, which is why the number of researchers coming up with very negative data on 360 degree appraisals equals those who come up with encouraging results. The reason may be simple, and depend greatly on the resources of the company, the stability of its workforce, and the self-understanding of its culture and mission. All that is in transition today, while HR’s are struggling to stay ahead of the curve.

360 reviews: the ugly

When a 360 degree process affects the eligibility for advancement either in pay or position, the feedback becomes a control tool. That not only negatively impacts the reliability and validity of the test instrument, but also intrudes into areas if interpersonal relations in the company to impair teamwork, client relationship, and relationship with managers and supervisors. Reduced levels of job satisfaction, and a decreased ability or desire to contribute to an organization may be the result.

Line managers are not natural 360 degree coaches, and may not respond well to re-training as educators outside their conventional leadership roles. With HR’s overwhelmed as it is, employees receiving 360 degree feedback have no one to ask for clarification about unclear comments or for more information about particular ratings, even if they are willing to make the needed changes. The 360 “multi-rater”, as it was once called, also upped the sheer number of people participating in the performance management areas, which requires HR’s to manage large-scale data collection, processing and reporting as a core task, leave alone assessment and coaching. There are enormous costs in money and time against doubtful advantages of 360 degree feedback at this time.

360 degree appraisal recalibrated

The last two years have seen significant changes to employees working from home. The process of online communication brings about written exchanges that inevitably take an evaluative form, as it is with every client a freelancer has. That can easily be leveraged to separate this potentially useful 360 degree feedback as a distinct developmental feature of Sesame HR. 

When approached haphazardly influenced by big corporations in better times, 360 degree feedback can be an HR nightmare. Used properly, employing a sophisticated performance management software with an eye on changing workplace, it can provide a profoundly supportive, organization-affirming method for promoting employee growth and development.