360-degree feedback

In human resources or industrial psychology, 360-degree feedback, also known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle. Most often, 360-degree feedback will include direct feedback from an employee's subordinates, peers (colleagues), and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback," where managers are given feedback only by their direct reports, or a "traditional performance appraisal," where the employees are most often reviewed only by their managers.

The results from a 360-degree evaluation are often used by the person receiving the feedback to plan and map specific paths in their development. Results are also used by some organizations in making administrative decisions related to pay and promotions. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review." However, there is a great deal of debate as to whether 360-degree feedback should be used exclusively for development purposes,[1] or should be used for appraisal purposes as well.[2]

History

The German military first began gathering feedback from multiple sources in order to evaluate performance during World War II.[3] Others also explored the use of multi-rater feedback during this time period via the concept of T-groups.

One of the earliest recorded uses of surveys to gather information about employees occurred in the 1950s at Esso Research and Engineering Company.[4] From there, the idea of 360 degree feedback gained momentum, and by the 1990s most human resources and organizational development professionals understood the concept. The problem was that collecting and collating the feedback demanded a paper-based effort including either complex manual calculations or lengthy delays. The first led to despair on the part of practitioners; the second to a gradual erosion of commitment by recipients.

However, due to the rise of the Internet and the ability to conduct evaluations online with surveys, Multi-rater feedback use steadily increased in popularity.[5] Today, studies suggest that over one-third of U.S. companies use some type of multi-source feedback.[6] Others claim that this estimate is closer to 90% of all Fortune 500 firms.[7] In recent years, Internet-based services have become standard in corporate development, with a growing menu of useful features (e.g., multi languages, comparative reporting, and aggregate reporting).[8]

Accuracy

A study on the patterns of rater accuracy shows that the length of time that a rater has known the individual being evaluated has the most significant effect on the accuracy of a 360-degree review. The study shows that subjects in the group “known for one to three years” are the most accurate, followed by those “known for less than one year,” followed by those “known for three to five years” and the least accurate being those “known for more than five years.” The study concludes that the most accurate ratings come from those who have known the individual being reviewed long enough to get past the first impression, but not so long that they begin to generalize favorably.[9]

It has been suggested that multi-rater assessments often generate conflicting opinions and that there may be no way to determine whose feedback is accurate.[10] Studies have also indicated that self-ratings are generally significantly higher than the ratings given from others.[11]

Results

Several studies[12] indicate that the use of 360-degree feedback helps to improve employee performance because it helps the evaluated see different perspectives of their performance. In a 5-year study,[13] no improvement in overall rater scores was found between the 1st and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years. Reilly et al. (1996) found that performance increased between the 1st and 2nd administrations, and sustained this improvement 2 years later. Additional studies show that 360-degree feedback may be predictive of future performance.[14]

Some authors maintain, however, that there are too many lurking variables related to 360-degree evaluations to reliably generalize their effectiveness.[15] Bracken et al. (2001b) and Bracken and Timmreck (2001) focus on process features that are likely to also have major effects on creating behavior change. Greguras and Robie (1998) tracked how the number of raters used in each particular category (direct report, peer, manager) affects the reliability of the feedback. Their research showed that direct reports are the least reliable and, therefore, more participation is required to produce a reliable result. Multiple pieces of research[16] have demonstrated that the scale of responses can have a major effect on the results, and some response scales are better than others. Goldsmith and Underhill (2001) report the powerful influence of the evaluated individual following up with raters to discuss their results. Other potentially powerful factors affecting behavior change include how raters are selected, manager approval, instrument quality (reliability and validity), rater training and orientation, participant training, supervisor training, coaching, integration with HR systems, and accountability.[17]

Some researchers claim that the use of multi-rater assessment does not improve company performance. One 2001 study found that 360 degree feedback was associated with a 10.6 percent decrease in market value, and concludes that "there is no data showing that [360-degree feedback] actually improves productivity, increases retention, decreases grievances, or is superior to forced ranking and standard performance appraisal systems."[18]

Maury Peiperl of Stanford's General Management Department, proposed four paradoxes that explain why 360 evaluations do not elicit accurate data: The Paradox of Roles, in which an evaluator is conflicted by being both peer and the judge; the Paradox of Group Performance, which admits that the vast majority of work done in a corporate setting is done in groups, not individually; the Measurement Paradox, which shows that qualitative, or in-person techniques are much more effective in facilitating change; and the Paradox of Rewards, which shows that individuals evaluating their peers care more about the rewards associated with finishing the task than the actual content of the evaluation itself.[19]

Additional studies[20] found no correlation between an employee's multi-rater assessment scores and his or her top-down performance appraisal scores (provided by the person's supervisor), and advised that although multi-rater feedback can be effectively used for appraisal, care should be taken in its implementation.[21] This research suggests that 360-degree feedback and performance appraisals get at different outcomes, and that both 360-degree feedback and traditional performance appraisals should be used in evaluating overall performance.[22]

References

  1. ↑ Bracken & Rose, 2011; Maylett 2009
  2. ↑ Waldman et al., 1998
  3. ↑ Fleenor & Prince, 1997
  4. ↑ Bracken, Dalton, Jako, McCauley, & Pollman, 1997
  5. ↑ Atkins & Wood, 2002
  6. ↑ Bracken, Timmereck, & Church, 2001a
  7. ↑ Edwards & Ewen, 1996
  8. ↑ Bracken, Summers, & Fleenor, 1998
  9. ↑ Eichinger, 2004
  10. ↑ Vinson, 1996
  11. ↑ Lublin, 1994; Yammarino & Atwater, 1993; Nowack, 1992
  12. ↑ Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999
  13. ↑ Walker & Smither, 1999
  14. ↑ Maylett & Riboldi, 2007
  15. ↑ Bracken, Timmreck, Fleenor, & Summers, 2001b; Smither, London, & Reilly, 2005.
  16. ↑ Bracken & Paul, 1993; Kaiser & Kaplan, 2006; Caputo & Roch, 2009; English, Rose, & McClellan, 2009
  17. ↑ Bracken et al., 2001b
  18. ↑ Pfau & Kay, 2002
  19. ↑ Peiperl, Maury, Harvard Business Review, January 2001, Retrieved April 6 2012
  20. ↑ Maylett, 2005
  21. ↑ Maylett, 2009
  22. ↑ Maylett, Tracy M., EdD, Pepperdine Univ, 2005 Abstract, Retrieved May 15 2009

Further reading

  • Atkins, P., & Wood, R. (2002). Self-versus others' ratings as predictors of assessment center ratings: Validation evidence for 360-degree feedback programs. Personnel Psychology, 55(4), 871–904.
  • Bracken, D.W., and Paul, K.B. (1993). The effects of scale type and demographics on upward feedback. Paper presented at the Society for Industrial and Organizational Society Annual Conference, May, San Francisco, CA.
  • Bracken, D.W., Dalton, M.A., Jako, R.A., McCauley, C.D., & Pollman, V.A. (1997). Should 360-degree feedback be used only for developmental purposes? Greensboro, NC: Center for Creative Leadership.
  • Bracken, D.W., Summers, L., & Fleenor, J.W. (1998) High tech 360. Training & Development, August.
  • Bracken, D.W., Timmereck, C.W., & Church, A.H. (2001a). The handbook of multisource feedback. San Francisco: Jossey-Bass.
  • Bracken, D.W., Timmreck, C.W., Fleenor, J.W., & Summers, L. (2001b). 360 degree feedback from another angle.Human Resource Management, 40 (1), 3–20.
  • Bracken, D.W., and Timmreck, C.W. (2001) Guidelines for multisource feedback when used for decision making. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The Handbook of Multisource Feedback. San Francisco: Jossey-Bass.
  • Bracken, D.W., Rose, D.S. (2011) "When does 360-degree Feedback create behavior change? And How would we know when it does?",
  • Caputo, P. and Roch, S. (2009) Rating formats and perceptions of performance appraisal fairness. Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, April, New Orleans, LA.
  • Edwards, Mark R., & Ewen, Ann J. (1996). 360° Feedback: The powerful new model for Employee Assessment & performance improvement. New York: AMACOM American Management Association.
  • Eichinger, Robert. (2004). Patterns of Rater Accuracy in 360-degree Feedback. Perspectives, 27, 23–25.
  • English, A.E, Rose, D.S. & McClellan (2009). Rating scale label effects on leniency bias in 360-degree feedback.Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, April, New Orleans, LA.
  • Fleenor, J. W., & Prince, J. M. (1997). Using 360-degree feedback in organizations: An annotated bibliography. Greensboro, NC: Center for Creative Leadership.
  • Goldsmith, M., & Underhill, B.O. (2001). Multisource feedback for executive development. In Bracken, D.W., Timmreck, C.W., and Church, A.H. The Handbook of Multisource Feedback. San Francisco: Jossey-Bass.
  • Greguras, G.J., & Robie, C. (1998). A new look at within-source interrater reliability of 360-degree feedback ratings. Journal of Applied Psychology, 83, 960–968.
  • Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree feedback on management skills development. Human Resource Management, 32(2–3), 325–351.
  • Kaiser, R.B., and Kaplan, R.E. (2006). Are all scales created equal? Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, May, Dallas, TX.
  • Maylett, T. M., & Riboldi, J. (2007). Using 360° Feedback to Predict Performance. Training + Development, September, 48–52.
  • Maylett, Tracy (2005). The Relationship Of Multi-rater Feedback To Traditional Performance Appraisal. Doctoral Dissertation, Pepperdine University, Los Angeles, California.
  • Maylett, Tracy (2009). 360-Degree Feedback Revisited: The transition from development to appraisal. Compensation and Benefits Review, September/October 41(5), 52–59.
  • Nooravi, S. Sherry (2010) Transforming high-silo, low-feedback organizational cultures: Using 360-degree feedback and coaching to maximize potential in individuals, groups, and cultures. "Dissertation Abstracts International" 70(12-B).
  • Pfau, B. & Kay, I. (2002). Does 360-degree feedback negatively affect company performance? Studies show that 360-degree feedback may do more harm than good. What's the problem? HRMagazine, Jun 2002. 47, 6; 54–60.
  • Reilly, R., Smither, J.W., & Vasilopoulos, N. (1996). A longitudinal study of upward feedback. Personnel Psychology, 49(3), 599–612.
  • Seifert, C., Yukl, G., & McDonald, R. (2003). Effects of multisource feedback and a feedback facilitator on the influence of behavior of managers toward subordinates. Journal of Applied Psychology, 88(3), 561–569.
  • Smither, J.W., London, M., and Reilly, R.R. (2005). Does performance improve following multisource feedback? A theoretical model, meta-analysis and review of empirical findings. Personnel Psychology, 58, 33–66.
  • Vinson, M. (1996, April). The pros and cons of 360-degree feedback: Making it work. Training and Development, April, 11–12.
  • Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone amok? The Academy of Management Executive, 12(2), 86–94.
  • Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What managers do with their results matters. Personnel Psychology, 52(2), 393–423.
  • Yammarino, F. J., & Atwater, L. E. (1993). Self-perception accuracy: Implications for human resource management. Human Resource Management, 32(2&3), 231–235.