When an employee is recruited, he has to undertake certain responsibilities and the company has also set certain standards for him to excel. To check how he has undertaken his job responsibilities and measure his productivity, the procedure of employee performance appraisal is undertaken. However 45% of HR leaders feel that the current performance appraisal procedure undertaken does not accurately gauge the employees work. While 44% of employees do not consider the fact that their bosses are honest when they are doing their performance evaluation or appraisal. A Meta analysis undertaken of 607 studies indicated that the performance level of the employer decreased considerably after the performance appraisal was over. It is important here that an appraisal procedure is undertaken which is effective and accurately evaluates the performance of the employee and encourages him to grow in the company. In this regard the 360 degree performance appraisal system is popular and widely accepted among the HR fraternity of various companies. In the next few seconds we would try to understand what the basic principles are of 360 degree performance appraisal and analyze the pros and cons of it.

360 degree performance appraisal pros

Understanding the Basics of 360 Degree Performance Appraisal:

The main principle behind the 360 degree performance appraisal is that, when an employee receives feedback at workplace  from multiple people regarding his overall performance, then he receives a complete picture of how effective he is at work and what needs to be done to develop him personally and professionally. This is because he can meet the standards set for him by the company. Researchers at San Diego State University are of the opinion that the 360 degree performance appraisal system connects all the employees of the organization and enhances the interpersonal relationship between them. Overall this helps the company to grow. The Esso Research and Engineering Company was the first company to use the 360 degree performance appraisal system in the 1950’s and after that this appraisal system gained much momentum in the 1990’s.

How is it Implemented?

The U.S. Office of Personnel Management is of the opinion that minimum 12 raters are used for the appraisal evaluation of a single employee. Here the raters could be superiors, colleagues, team members and even customers. The HR professional collects the data derived from the raters and then fills up the employee performance appraisal form. The HR managers are of the opinion that since the feedbacks for an employee comes from multi-people, the feedback is more reliable and accurate. The questionnaire given to the raters assess the behavior of the employee, the level of skill he has to do a specific work and also the knowledge he has in general regarding his industry, company and his own job.

Now let us look at some of the advantages and disadvantages of 360 degree appraisal.

Benefits of using the 360 Degree Performance Appraisal System?

1. Creates a channel of open communication among employees:

When a company adopts the 360 degree performance appraisal system, the employees working in the company are required to rate each other’s work. Thus an environment rich in open communication develops and employers communicate the problems that are present and offer solutions to combat also. This helps the company to solve issues which might have created problems otherwise.

2. Enjoy a perception of how others see them:

In traditional appraisal system, the view point is mainly of the management. However when a company undertakes a 360 degree performance appraisal system, the feedback for an employee comes from multiple level. An employee can perceive how his team members, customers and superiors view him and take steps accordingly to improve him.

3. Helps to improve the employee performance considerable:

One of the benefits of using the 360 degree performance appraisal system is that the feedbacks help to enhance the personal effectiveness of the employee. This is very good when a company is in service industry and also wants to constantly improve the quality of work undertaken by each of its employee.

4. The importance of the feedback:

Performance appraisal always creates an environment of tension for the employee who is being apprised. But when the 360 degree performance appraisal system is used well, then the appraisal is more like a positive feedback and the employee can take in the feedback in a more positive manner. This would help the employee to understand his shortcomings and make an effort to improve in the near future. An improved employee would help the company to grow in many ways.

Limitations Faced in 360 degree Performance Appraisal System:

The following mentioned are few  disadvantages of 360 degree feedback performance appraisal.

1. Very expensive:

While studying the 360 degree performance appraisal system, the researchers from Medical College of Wisconsin found out that this appraisal system was time consuming and it also increased the overall workload of the employee. Researchers from University of Rhode Island also found out that since the raters had to do their daily work and also participate in the appraisal system, the feedback from the raters sometimes indicated low motivation and decrease in satisfaction for the employees. The employee here might also become overburdened and might suddenly take a decision to leave the company in this regard.

2. The participation of the immediate superior is limited:

Since the 360 degree performance appraisal system involves feedback from multiple levels in the company, the immediate superior does not get much involved. Marion Their from Expanding Thoughts which is located in Boulder explains that, when using the 360 degree evaluation or effective performance appraisal the manager should not casually walk in and just point out the areas the employee needs to improve and then walk away, it is strict NO. She also tells that this happens frequently and is not uncommon. Here it is important that the immediate superior should understand that the multiple level feedback can work for the employee and he should also take a major initiative in it. Otherwise the appraisal system would not work for the employee

3. Sometimes feedbacks become personal in nature:

When a company undertakes a 360 degree appraisal method, the HR should see to it that the feedbacks from the raters are constructive in nature. The role of the employee should be understood when a feedback is taken from a rater. For example, Lynda Zugec working in New York at the Workforce Consultants explains that if an employee does not deal on day to day bases with a customer or a client, feedback from them is not necessary. If the feedback is taken, then the feedback given on the employee would be unfair and not accurate.

The Importance of Maintaining Confidentiality of Data:

If an employee is being rated for the first time using the 360 degree employee appraisal system, then he might worry about the confidentiality of the data. Here the employee has to be assured that the data in the feedback would be kept confidential and the raters will not discuss his evaluation openly among themselves. Dick Grote, the writer of “How to be Good at Performance Appraisals?” explains here that the company should not allow political collaborations among office groups to be undertaken, where people in a group pat each other’s back and benefit themselves.

Active follow-up needed:

When companies undertakes a 360 performance review or 360 degree appraisal system, they usually have a single follow up with the employee, annually. But since changes in behavior also are undertaken the follow up should be more often and within once in every 3 to 4 months. This would help the employee improve considerably and the company would gain from it.

In conclusion it should be added when a company adopts the 360 degree appraisal system it should train raters who would assess the employee accurately and help him to develop considerably, both in areas of work and personal life. Otherwise the whole procedure would be wastage of time and money for the company. It also might de-motivate the employee concerned. The above mentioned are few 360 degree feedback advantages and disadvantages. Now that you have read the article it would be great if you can share a few notable comments on the topic discussed above. Also review and add your feedback which might add an important dimension to the article.