When to use it

• To give you feedback on your performance and your management style from those around you to help you create an effective personal development plan.
• To help the firm assess your performance, and to make pay and promotion decisions.
• To monitor the standard of leadership or the culture of the organisation as a whole.

Origins

The idea of getting feedback from different sources to appraise performance is as old as civilisation itself. For example, an imperial rating system was used during the Wei Dynasty, in third-century China, to evaluate the performance of people at the imperial court.

More recently, the German military used multiple-source feedback during World War II, with soldiers evaluated by peers, supervisors and subordinates to provide insight and recommendations on how to improve performance. During the 1950s, behavioural theorists gave a lot of attention to employee motivation and job enrichment, with a view to making work more intrinsically appealing. It was in this context that 360-degree assessment, as we know it today, was invented.

The individual often credited with its invention was organisational psychologist Clark Wilson through his work with the World Bank. The original tool was called the ‘Survey of Management Practices’ (SMP), and was used by Clark in his teaching at the University of Bridgeport in Connecticut, USA. The first company to adopt Clark’s SMP was the DuPont Company in 1973; it was then picked up by others, including Dow Chemicals and Pitney Bowes. By the 1990s, 360-degree feedback was in widespread use, with literally dozens of survey instruments in existence. Human resources consultants began to pick up on the concept as well, which further contributed to its dissemination.

What it is

Under the traditional annual appraisal system, an employee’s review was conducted once a year by their immediate boss. But if that boss didn’t have a good understanding of their work, or if the boss lacked emotional intelligence, the review was often a complete waste of time.

360-degree feedback (also known as multi-rater feedback or multi-source feedback) is the antidote to these perfunctory and biased reviews. 360-degree feedback is based on the views of an employee’s immediate work circle. Typically, it includes direct feedback from an employee’s subordinates, peers and supervisors, as well as a self-evaluation. In some cases it includes feedback from external sources, such as customers and suppliers or other interested stakeholders.

How to use it

360-degree feedback allows individuals to understand how others view their effectiveness as an employee, co-worker or staff member. There are four typical components:

• self-appraisal;
• superior’s appraisal;
• subordinates’ appraisal;
• peers’ appraisal.

Self-appraisal is where you evaluate your own achievements, and your strengths and weaknesses. The superior’s appraisal is the traditional part of the process, where he or she offers a verdict on how well you have delivered on your objectives over the last year or so. Appraisal by subordinates is the key part of the 360-degree feedback process, in that it allows the people working for you to indicate how well you have managed them – for example, how clearly you have communicated with them, how well you have delegated and how much coaching support you have provided. Finally, appraisal by peers (also known as internal customers) can help you figure out how good you are at working collaboratively across the firm, for example by being responsive to their requests and helping out on projects that aren’t your direct responsibility.

In terms of the methodology for implementing a 360-degree feedback tool, the process has the following steps:

• The individual who is being reviewed identifies all the key individuals (superior, subordinates, peers) whose inputs should be solicited.
• A survey is sent to all these individuals, clarifying that the data they provide will be anonymised. The survey typically includes a series of closed-end questions (such as, ‘How effective is this individual at communicating with his/her team? 1 = very poor, 3 = average, 5 = very good’), and also some open-ended questions (such as, ‘Please explain why you gave this rating’).
• The results of the surveys are pulled together, and a report is prepared for the individual, giving the average ratings and the anonymised written answers.
• The individual is given the results and discusses them with a ‘coach’, who has expertise in interpreting these sorts of surveys and who can suggest ways of developing any weaker areas.

Most large firms today use some sort of 360-degree assessment system. It is viewed as a powerful developmental tool because when conducted at regular intervals (say, yearly) it tracks how an individual’s skills and management capabilities are improving.

One issue that is frequently debated is whether 360-degree assessment should be used solely for personal development, or whether it should also be used as an input into pay and promotion decisions. While the information it provides is important, the risk of using it in pay and promotion decisions is that people start to ‘game’ the system – for example, by asking their employees to give them high ratings. This may not work, of course, but, whatever the outcome, the result is likely to be a tainted set of results. This is why most people argue that 360-degree assessment should be used primarily as a developmental tool – that is, purely to help people become more effective in their work.

Further reading

Edwards, M. and Ewen, A.J. (1996) 360° Feedback. New York: AMACOM.

Handy, L., Devine, M. and Heath, L. (1996) 360° Feedback: Unguided missile or powerful weapon? London: Ashridge Management Research Group.

Lepsinger, R. and Lucia, A.D. (1997) The Art and Science of 360° Feedback. San Francisco, CA: Jossey-Bass.