A lot of sense (and nonsense) has been written about 360-degree feedback. In this guide, I will present the latest scientific evidence on the use of the 360-degree feedback instrument, including its advantages and disadvantages.
What is 360-degree feedback: A definition
360-degree feedback, also called multi-rater or multisource feedback, is an instrument to get performance ratings and feedback from subordinates, peers, customers, suppliers, and/or supervisors. It is most often used as a tool to provide feedback to leaders and managers.
A 360 feedback instrument is often deployed once a year for a number of key individuals in the organization. The goal is to get feedback from different sources about performance and areas of improvement.
However, this doesn’t always happen. A more accurate name would be 270-degree feedback, as one of the key stakeholders, the customer, is often not included in the assessment.
Science-based pros and cons
When you do a quick Google search, you’ll find a lot of claims about the advantages of the 360-degree feedback instrument. However, the science behind it is seldom explored even though the instrument has been thoroughly researched for the past 45 years.
One of the first papers on this topic, published in 1974, was titled “Group feedback and group contingencies in modifying behavior of fifth graders”. The paper showed that systematic peer feedback given to 5th-graders improved the appropriate behavior of all 25 children when compared to a control group that did not receive feedback.
In 1987, Bernardin & Beatty noted that more comprehensive 360-degree feedback can enhance communication and performance in a professional setting. Because feedback is given by subordinates, peers, and customers, it is an excellent tool for leadership development.
However, not all that glitters is gold. There are clear pros – but also cons to this assessment. In the next sections, we’ll discuss the pros and cons. Afterward, we will list several best practices to reduce the cons and enhance the pros and turn the 360-degree assessment into a useful management tool.
Advantages of the 360 feedback
The good news is that 360-degree feedback can create behavior changes (cf. Goldsmith and Underhill 2001; Goldsmith and Morgan 2004; Smither et al. 2005).
London and Beatty (1993) describe the instrument as a way to build a competitive advantage. Because of its focus on leadership development, better behavior from leaders and managers will lead to a better competitive position for the organization.
A 2005 meta-analysis by Smither, London, and Reilly reviews the evidence of multisource feedback. A meta-analysis is an analysis that combines the results of multiple studies, giving a good overview of the research.
- Ostroff, Atwater, and Feinberg (2004) found that ratees who received more favorable feedback from subordinates also received more favorable ratings from their supervisors during their annual performance appraisal.
- Conway, Lombardo, and Sanders (2001) found that subordinates and peer ratings explained more variation in measures like productivity and profit than other sources.
- Erickson and Allen (2003) found that positive 360-degree feedback ratings were associated with retail store outcomes like revenue, gross margin, accessory sales, and service contracts.
- Smith and Walker (2001) found that positive 360-degree feedback ratings of bank managers were correlated with customer loyalty.
- Church (2000) found that managers who received positive 360-degree feedback had lower turnover and higher service quality in their teams.
- In line with this, Atwater, Brett, and Ryan (2004) found that positive subordinate ratings lead to an increase in satisfaction and engagement and a decrease in turnover in the team.
This evidence doesn’t, however, mean that we all should implement 360 feedback tomorrow. There are several clear drawbacks to using 360 feedback as an instrument.
Disadvantages of the 360 feedback
The problem is that we can easily make a similar list with just as many studies that find no positive effects of 360 feedback.
An example is a meta-analysis by Kluger and DeNisi (1996) which included 600 studies and is the most-cited research paper on this topic. Only one-third of the 600 studies reported improvements in performance. Another one-third reported no impact, while the final one-third reported negative changes in performance. According to the authors:
“We argue that a considerable body of evidence suggesting that feedback intervention (FI) effects on performance are quite variable has been historically disregarded by most FI researchers. This disregard has led to a widely shared assumption that FIs consistently improve performance. Fortunately, several FI researchers have recently recognized that FIs have highly variable effects on performance, such that in some conditions FIs improve performance, in other conditions FIs have no apparent effects on performance, and in yet others FIs debilitate performance.”
This paints a grim picture. Even more disturbing is that this may hurt bottom-line performance as well. Watson’s Wyatt 2001 HCI report revealed that companies that use peer reviews have a market value that is 4.9% lower than similar companies that don’t use peer reviews. Companies that are allowed to evaluate their managers are valued 5.7% lower than companies that don’t. These results are associated with a 10.6% decline in shareholder value.
These reductions in productivity can be explained by a number of factors:
- Time and cost. For a single ratee, between four to eight raters may be involved. This is very costly in terms of time. In addition, raters should be trained to deliver feedback in the right way, which takes up even more time.
- Difficulty. Giving feedback is difficult and can be a cause of conflict and uncertainty among team members. This is especially the case when there is no prior training for raters.
- Lack of alignment with strategy. 360-degree feedback often focuses on competencies or skills that may not be in line with the organizational strategy. This may result in a focus on behaviors that do not align with business priorities.
- Lack of follow-up. The feedback is often a one-off. There is no consequence for poor performance. On top of that, a lack of follow-up decreased behavioral change.
So does this mean we should just stop using all 360-degree feedback instruments? Not necessarily. The research does show that 360-degree feedback is not a guaranteed success. However, there are interventions that can be used to combat these effects.
10 Multi-rater feedback best practices
Bracken & Rose (2011) list four success criteria to make a 360 process work:
- Relevant content. The questions and competencies asked about should be in line with the values and competencies that are unique to the organization. According to the authors, “Although it is possible to find good approximations with standardized tools, the best fit comes from a custom survey”.
- Credible data. The data coming from the survey are potentially used by multiple users. These include feedback recipients, feedback providers, managers, coaches, and HR. Data should have both real and perceived credibility, meaning it is accurate and valid, and also seen as such. Best practices are (i) to have sufficient raters, (ii) raters who are sufficiently familiar with the subject, (iii) having raters selected by the subject (with approval from the manager), (iv) a professional instrument that measures behaviors, (v) an instrument that does not trick the rater through randomization or reversed wording, (vi) a standardized and clear rating scale, and (vii) having rater training.
- Accountability. The subject should be accountable for the feedback. Ways to do this is to create follow-ups, either with the manager or a coach. Other ways to override an individual’s resistance to change are the sharing of the feedback and personal goals with others and connecting bonuses to desired behavioral change. As you can imagine, the direct manager can play an important role in this accountability process.
- Census participation. For 360 degree feedback to work, everyone has to participate. The drawback of a 360 is that it is labor-intensive. Every employee requires feedback from multiple others, resulting in everyone in the company giving feedback to multiple people. For this reason, management has to set clear expectations, should be accountable for the successful completion of the feedback, and should help to create a climate of consistency and fairness for all stakeholders.
There are also a number of more practical considerations:
- Engage all relevant stakeholders. Getting buy-in from relevant stakeholders ensures support from senior decision-makers and participation in the 360 process.
- Clear communication. Define how the success of the 360 program will be measured and clearly communicate this to all relevant stakeholders. Success criteria could be the percentage of completed surveys within 14 days, a completed improvement plan for each employee based on the 360 input, and, in the end, behavioral change/improvement on the behaviors that one is evaluated on.
- Create urgency and reward. Because a 360 survey is often not seen as something that requires our immediate attention, it is often delayed into oblivion. A good way to solve this is to set a clear deadline for submission. This works well when it is mandatory to complete the survey. Alternatively, rewarding people for completing the survey could also be very effective. This reward could be any small gadget that stimulates people to participate just to get it!
- Plan follow-ups. A 360-degree event should not be a stand-alone. Stimulating individual employees to take action and official follow-up activities on the 360 feedback help in triggering and supporting the behavioral change needed to make the 360 a success.
- Development vs. evaluation. If the goal of the 360 is personal development, ratees should be able to select their raters. In this case, building a culture of feedback in the organization will be important. If the goal is performance evaluation, ratees should be chosen based on how close they work together with the rater. In this case, the 360 should be embedded into the performance management system.
- Integration of goals and competencies. The goal of the 360 is to improve business performance. It is, therefore, critical to focus the evaluation on the competencies that are important for the individual’s job. Being highly proficient in a critical competency will lead to superior performance in the function, which leads to better organizational outcomes. Knowing the competencies needed to excel in one’s job and focusing on evaluating these is critical for successful 360 feedback. If available, the company’s competency framework can be used for this.
360-degree feedback example questions
When making 360-degree feedback questions, follow these steps.
- Select the competencies per function that add most to superior performance. Each function has critical competencies that are needed for superior performance. These are the companies that contribute most to the organization’s strategy and goals. Note: don’t select more than four: it is hard enough to improve one or two competencies at the same time, let alone more than four!
- Define 3-4 behaviors per competency. In the second step, you define the behaviors, or dimensions, for each competency. These are the questions that the raters will give feedback on (see the template below).
- End with open feedback. At the end of the survey, give room for open feedback about the competencies that the ratee can develop on. Example questions are:
What is [ratee]’s greatest strength, and what should he/she continue to grow and develop?
What is [ratee]’s greatest opportunity, and what should he/she continue to grow and develop?
360-degree feedback software
There are multiple tools that provide 360-degree feedback functionalities. We add these tools not because we recommend them – we try to stay software agnostic. It is our goal to inform you to make the best possible decision. Visually showing you examples of how different companies solve the challenges around 360 feedback is just as informative as writing about it. In this article, we’ll discuss Impraise and Qualtrics.
Impraise is an employee feedback app in which you can easily select skills that you would like to have feedback on. After a meeting, you can simply ask specific raters for their feedback on your performance in that meeting, by selecting the competencies you want to have feedback on. The raters then get an easy sliding mechanism with which they can score you and an opportunity to give qualitative feedback as well.
Qualtrics is probably the best-known survey-provider. Where Impraise is more of an out-of-the-box system, Qualtrics offers a 360 development function in its survey system. Using Qualtrics’ intuitive interface, it is easy to add questions targeted to specific groups and to generate reports on the results of the 360 as shown below.
That’s it for this guide on 360 Degree Feedback. To learn more about HR subscribe to stay up-to-date.