Are You Ready for 360

Genene Koebelin Human Performance Improvement

Spring, 1999 Suffolk University

This article is copyright Genene Koebelin. If you wish to make copies of it please contact him directly at: koebelin@cwix.com

Is Your Organization Ready for 360 Degree Feedback?

The question of whether or not your organization is ready for 360 degree feedback is not a simple "yes" or "no" question as it may appear. That’s because 360 degree feedback is not a thing that can be packaged and delivered, nor is it a program that can be implemented on a certain date in time. 360 degree feedback is a process that involves identification of a "problem" to be solved, analysis of the context and current atmosphere for problem resolution, commitment of resources (both monetary and time), and a detailed plan for implementation and follow-up.

What is 360 Degree Feedback?

"The (360 degree) feedback process...involves collecting perceptions about a person’s behavior and the impact of that behavior from the person’s boss or bosses, direct reports, colleagues, fellow members of project teams, internal and external customers, and suppliers. Other names for 360 degree feedback are multi-rater feedback, multi-source feedback, full-circle appraisal, and group performance review" (Lepsinger, 1997, p. 6).

In order for an organization to be ready for effective 360 degree feedback, a number of questions need to be answered. The effectiveness of the feedback is directly linked to the integrity of the process, and the integrity of the process is measured in terms of commitment, clarity of purpose, and follow-up. A 360 degree feedback team is recommended for accomplishing a detailed plan to address these issues prior to implementation.

The Balanced Scorecard

Utilizing the four perspectives of the balanced scorecard as a framework for examining organizational readiness, the team would involve themselves in creating a plan which addresses the following:

I. Internal Business Process Perspective

• Is 360 degree feedback needed to support the implementation of a corporate strategy or the accomplishment of a corporate goal?
• What is HR’s and top management’s role in the process?
• How will employee development plans be created utilizing the feedback?
• How will these development plans be utilized to align behaviors/expectations needed to successfully implement the corporate strategy or goal identified?

II. Financial Perspective

• Are sufficient resources available to insure a high integrity 360 degree feedback process?
• Have funds been budgeted for follow-up activities, such as staff training?
• How does the corporate strategy or goal driving the process affect the bottom line?

III. Customer Perspective

• What will be the level of customer involvement and representation in the 360 degree feedback process?
• How will the corporate strategy or goal driving the process affect customers’ perceptions of the organization and its products?

IV. Learning Perspective

• How will individual development needs identified in the process be addressed?
• Will supervisors require training in order to address the identified needs of subordinates?
• Will HR utilize aggregate data on employee needs to create an organization-wide development plan?

I. Internal Business Process Perspective

• Is 360 degree feedback needed to support the implementation of a corporate strategy or the accomplishment of a corporate goal?

In a survey conducted by Lepsinger and Lucia, participants responded to the question, "How is 360 degree (multi-rater) feedback being used in your company?

• for management and organizational development 58%
• for performance appraisal 25%
• to support strategy implementation and culture change 20%
• for team development 19%

(Lepsinger, 1997, p. 18)

While 25% of the respondents indicated that they use 360 degree feedback for performance appraisal, there are strong arguments against its use for that purpose, and nearly unanimous agreement that 360 degree feedback should not be used for appraisal purposes in a company that is not experienced in the 360 degree feedback process. Instead, it should be used to link employee development with organizational development in a way that clearly supports a strategy or goal.

The experts have seen 360 degree feedback used in a number of ways, including

• to achieve business strategy and culture change by clarifying the behaviors that are required to support these initiatives by "re-focusing the workforce to attain changed organizational goals through changing their behavior" (Lepsinger, 1997, p. 19)
• to enhance team effectiveness by identifying gaps in team skills sets in organizations seeking to implement a team structure (Lepsinger, 1997, p. 20)
• as part of human resource management systems. "Just as individuals use 360 degree feedback to determine their own development needs, organizations can use aggregate reports to create a profile of training and development needs across the company" (Lepsinger, 1997, p. 20).

By contrasting self-evaluation results with feedback culled from others through 360 degree feedback, the process enables an individual to integrate feedback into his or her self-image (Church, p. 3). "360 could be of use to an organization that truly believes that performance can be improved by changing individual behavior and a key reason the desired behavior(s) is not occurring is that many people

either don't know what's expected of them or don't know whether or not their behaviors align with what's expected" (Greg Gullickson, Performance Management Listserve, March 17, 1999).

Should You Consider 360 Degree Feedback for Your Organization?

"To decide whether 360 degree feedback could be useful in your organization, ask yourself the following questions:

• Can your company meet the challenges represented by developments like consolidation, increased competition, global expansion...using the same skills and behaviors as in the past?
• If people need to change their behaviors to ensure the organization’s’ future success, are they clear about exactly what they need to do differently, and do they feel equipped to make those changes?
• Is the behavior of people in the organization sufficiently consistent with the vision, mission, and espoused values of the company?
• Is there a formal system in place through which people receive information on how others perceive their behavior and their performance?...
• Do selection and development systems accurately reflect the current and future requirements of the jobs being done?" (Lepsinger, 1997, p. 24).

The Wrong Motives for Considering 360 Degree Feedback

360 degree feedback should not be considered as a way for gathering documentation against a single problem employee. Face-to-face discussion with the supervisor is more appropriate for handling individual employee problems. "If you start, for example, to collect information without involvement

of the employee (e.g. talk to coworkers or other staff) you set up a situation for incredible anger and confrontation" (Robert Bacal, Performance Management Listserve, February 11, 1999). "I'll strongly agree with Robert Bacal's comments about the dangers of using 360-feedback as a means to support someone's termination or promotion. While I am a strong advocate of 360-feedback as an

individualized or team development process, I would question its utility in this case" (Tom Sullivan, Performance Management Listserve, February 11, 1999). "Also, even if the employee IS involved in the 360 process, there could be a risk to the 'boss.' He or she couldn't come out of this 'smelling' too good, independent of the outcome" (Douglas M. Max, Performance Management Listserve, February 11, 1999).

Just as 360 degree feedback should not be used on one poorly functioning employee alone, it will not by itself solve all of the problems of a poorly functioning organization. "360 degree feedback won’t fix a system that doesn’t work" (Lepsinger, 1998, p. 5). "Professionally developed assessment tools identify skills sets or competencies required for success in a specific role. If the culture fails to reinforce the objectives of the assessment tools (such as planning or staff development), the exercise of receiving 360 degree feedback will be academic, at best--and frustrating and demoralizing, at worst" (Haworth, p. 5).

"360 needs to be instituted as a tool to help, not a weapon. In those instances where it is eventually used in performance appraisal (a practice I have reservations about) it is first used as a developmental

tool for several years, if the practice is to be effective" (Judy Cox, Performance Management Listserve, March 19, 1999). It is essential that the feedback be seen as only one component of the appraisal, not the entire basis for evaluation. "Feedback is most effective in performance appraisal when it is used for goal-setting" (Lepsinger, 1998, p. 4)

"Another factor in 360 readiness is whether those who will be rated see the process as constructive, not attacking--that is, is the organization using the 360 process to help people improve (or, in some cases, choose to play a different role in the organization) or is it using the process to justify removing people or otherwise making punitive actions?" (Judy Cox, Performance Management Listserve, March 19, 1999).

.360 Degree Feedback Does Not Equal Perfect or Objective Feedback

A number of sources state that 360 degree feedback is more objective than feedback from one’s superior alone, as in the traditional annual performance review, but claims regarding objectivity are not strictly accurate. "If the objective behind this is to ensure objectivity and accuracy of assessments, you should realize that these systems do not provide that benefit. They increase the amount of feedback, but the feedback is still subjective." (Brock Vodden, Performance Management Listserve, February 26, 1999). At the same time, though, we realize that having a number of people agree in their opinions is more powerful than one person’s opinion alone. When people share the same opinion, then we conclude that we are probably that much closer to the truth--while at the same time acknowledging that truth is, at least in part, dependent upon perspective.

Are Open Communication and Employee Empowerment Desired Values in Your Organization?

In assessing readiness for 360 degree feedback, it is important to consider whether open communication and employee empowerment are desired values in the organization. The assessment process alone is an empowering process, especially if it includes the recommended team planning. "Feedback and communication between managers and supervisors is very important when it is open, clear, and based on mutual respect. Performance Management systems (the good ones) provide for these

functions. They also involve effective, collaborative objective-setting, planning of the work, continuous review of the work, and mutual identification of ways to improve the performance" (Brock Vodden, Performance Management Listserve, February 26, 1999).

Communication is critical to the success of the 360 degree feedback process. Managers and participants need to be educated and involved from the beginning regarding the purpose and goals of the process. From the beginning, the 360 degree feedback team should make communication a key element of their task in planning the 360 degree feedback process.

• What is HR’s and top management’s role in the process?

Top Management Should Lead the Way

"We must be the change we want to see in the world" (Gandhi).

Marion Jacobson, Vice President and Director of Corporate Training at Paine Webber, explains why Paine Webber decided to have top management be the first participants in the 360 degree feedback process. "We chose that route because we wanted to show people at other levels that they were part of senior management’s development and also to provide them with a model for being open. When they saw that top-level executives were willing to open up to what people were saying about them, and to the fact that they needed to develop their skills, it created more willingness on the part of less senior people to undergo the process later on" (Lepsinger, 1997, p. 18).

What is HR’s role?

HR’s vision for the process can lead the way to achieving needed organizational change. "HR is shaped by the business goals, the corporate culture, the competitive position, and the workforce demographics of each organization it serves...In the 90’s, HR has grappled with many key business challenges: aligning HR practices with business goals, using HR practices to better connect with a customer base, establishing effective partnerships while maintaining a distinct corporate culture" (Halcrow, p. 2).

HR should strive to create and communicate a shared vision of the goals of the 360 degree feedback process, and should support the process with its technical expertise and resources. In addition, HR will play a key role in developing organization-wide development plans based on the training and other identified needs of employees. The plan may well include HR’s playing a role in monitoring and tracking a number of follow-up activities, as well as measuring and reporting progress or improvements in achieving the company’s overall goal or strategy.

• How will employee development plans be created utilizing the feedback?

The 360 degree feedback team will need to address the issue of how the employee development plans will be created. Will the employee be the sole recipient of the feedback and responsible for developing his own plan, or will he be required to share some or all of his feedback with his superior and work on the plan together? These questions will need to be addressed prior to implementation of the process, because any changes in confidentiality agreements (who sees the feedback) during the process would severely undermine its integrity.

• How will these development plans be utilized to align behaviors/expectations needed to successfully implement the corporate strategy or goal identified?

"This evaluation technique enables companies to align employee performance with the organization’s needs and overall strategy and leads to the development of a more involved, less hierarchical workforce...When 360 degree feedback is used, contrasting the results of self-evaluation against organizational norms illuminates areas of the business plan that need more attention from the employee" (Hoffman., p. 1).

II. Financial Perspective

• Are sufficient resources available to insure a high integrity 360 degree feedback process?

Because the success of the 360 degree feedback is so dependent upon its being conducted in an atmosphere of trust and fairness, sufficient resources need to be allocated to insure this will occur. First, outside expertise will probably be needed to assess organizational readiness and assist in preparation of the detailed plan needed to implement the process. It is crucial that sufficient resources be allocated in this planning stage, as changing direction or altering the plan during the implementation of the process could easily raise the fairness issue and undermine trust in the integrity of the process.

Secondly, questionnaires may need to be sent to an outside agency to insure the confidentiality of the process, although this would be an additional expense. Outside agencies can also aggregate the data and compile individual and organization-wide reports while insuring the confidentiality of all participants.

Finally, the 360 degree feedback process is used to identify employee skill gaps and development needs and to prepare individual and organization-wide development plans. In an atmosphere of trust, where people truly believe that the data will not be held against them but will rather be used to help them, they will naturally expect feedback on their improvement. This means that they will expect not only follow-up training and assistance, but future feedback on their performance.

"Despite their growing popularity, many multi-rater efforts are falling woefully short of their potential. Most companies view the multi-rater process as a special event, using it one time only as part of a training or coaching session. As a result, they don’t take the process beyond the initial goal of providing feedback to individual employees" (Gebelein, p. 1). 360 degree feedback is not a one time only process--employees will expect and deserve a second round.

• Have funds been budgeted for follow-up activities, such as staff training?

Follow-up is crucial to the success of 360 degree feedback. In organizations that failed to deliver in terms of follow-up training and other development assistance, employees were reluctant to go through the process again. Both formal and informal training will be needed, and funds should be budgeted to cover training and other materials expense.

• How does the corporate strategy or goal driving the process affect the bottom line?

Another way to phrase the above question would be to ask, how do financial figures (such as sales) reflect the behavior of the problem to be addressed over time? Secondly, how will the 360 degree feedback process impact these figures in a measurable way to insure long-term continuous improvement?

III. Customer Perspective

• What will be the level of customer involvement and representation in the 360 degree feedback process?

For employees who interact with customers, the 360 degree feedback process may include customer feedback, depending upon the overall strategy or goal of the process. "Incorporating customer feedback in the evaluation process emphasizes the importance of client expectations in determining company focus" (Hoffman, p. 2).

360 degree feedback can be used to support a corporate strategy of shifting the focus of the company from meeting the internal needs of the department or functional unit to meeting the needs of the customer. In this way, customer involvement can be used to enhance strategic alignment and facilitate to-to-bottom focus (i.e., aligning goals from the organizational to the individual level (Karl, p. 1).

• How will the corporate strategy or goal driving the process affect customers’ perceptions of the organization and its products?

360 degree feedback can be used to strengthen a company’s reputation for service. For example, a Pennsylvania bank decided to use 360 degree feedback "to empower employees so that they are able to truly take care of a customer without the need to send the customer from department to department" (Dunn, p. 1). The 360 degree feedback process was determined to be key to supporting the parent company’s "relationship banking" mission, "designed to help their member banks solidify and expand customer relationships and to assure lasting competitive advantage" (Dunn, p. 1).

To accomplish this, the 360 degree feedback team had to take on the task of restructuring the entire bank so that employees would become "generalists" with broad expertise as opposed to experts in one specific area only. In partnership with experts on 360 degree feedback, the team designed a process to:

• identify the core leadership and management skills that are essential to making relationship banking happen
• determine collective team strengths and core needs for improvement
• determine strengths and key growth opportunities for individual team members
• craft team goals
• craft individual goals
• build supportive partnerships among team members (Dunn, p. 2).

The example above clearly illustrates the purpose of 360 degree feedback--which is to identify and meet the developmental needs of an organization and its employees.

IV. Learning Perspective

• How will individual development needs identified in the process be addressed?

"Whether examining a mechanical or an organizational system, it is important to understand that the system includes at least three components: data, evaluation, and action...A system in which data and evaluation did not influence action would not be a feedback system" (Jackson, p. 2). The 360 degree feedback process encompasses the creation and execution of employee development plans. Failure to follow up appropriately can turn the entire process into one which does more damage than good, as companies have found when they go to repeat the process a year later. If no action was taken to help employees learn the skills they needed to close those identified gaps, employees are likely to rebel when asked to repeat the process of having everyone evaluate those same skill sets.

• Will supervisors require training in order to address the identified needs of subordinates?

"The results and behaviors for which people are held accountable must be clear, unambiguous, specific, observable and agreed to by those who will be measured. Everybody has to know exactly what "coaching" and "teambuilding" mean" (Lepsinger, 1998, p. 5). If supervisors are to be held responsible for teaching, mentoring, coaching or engaging their employees in teambuilding in order to accomplish individual development plans, supervisors may well require training, too.

• Will HR utilize aggregate data on employee needs to create an organization-wide development plan?

HR should have a plan in place for aggregating 360 degree feedback data and creating a company-wide development plan. This plan should include: a statement of purpose, identification of resources, description of developmental needs and the plan to meet those needs, and a scheduled timeframe for the plan’s execution.

CONCLUSION

"360 degree feedback can promote individual development and improve individual performance if the feedback is linked to developmental planning, goal setting, and organizational support (Karl, p. 1). The four conditions that will maximize the value of the 360 degree feedback process:

• the intervention is business-driven
• the organization clearly needs the measured behaviors to support a corporate strategy or goal
• the survey instrument and administration process are reliable and valid
• conditions for learning new skills exist (Karl, p. 1).

Recommendations from practitioners of 360 degree feedback:

• Link the effort to a strategic initiative or a business need. "For 360 degree feedback to be effective as a stimulus for change, people need to understand its broader purpose" (Lepsinger, 1997, p. 41).
• Get senior management to participate in and drive the effort. "If the feedback is seen as something the top tells the middle to do to the bottom, it is less likely to have the intended effect" (Lepsinger, 1997, p. 42).
• Emphasize clear and frequent communication about the initiative’s purpose and implications for each member of the organization. "The more people understand about why 360 degree feedback is being introduced in the organization and how the information will be used, the more likely they are to support the effort" (Lepsinger, 1997, p. 44).
• Ensure that people see the behaviors that will be measured as important and relevant to their jobs. "It is much easier to gain people’s commitment...if they believe the behaviors that will be measured are directly related to the effective performance of their jobs" (Lepsinger, 1997, p. 44).
• Provide ongoing support and follow-up. "People need clarification about what is expected of them after they receive the feedback, as well as ongoing support, if what they have learned is going to lead to action or change" (Lepsinger, 1997, p. 45).

"Including employees from multiple layers in the feedback process is concrete evidence that their opinions, observations and evaluations are valued by the organization. Creating an atmosphere that accents involvement can foster voluntary collaboration, an element sometimes sacrificed in traditional, striated cultures" (Hoffman, p. 2).

Successful implementation of a 360 degree feedback process depends on whether it truly addresses, and is perceived to address, an important performance strategy or goal in the company. In addition to the benefits of exchanging feedback, it’s also a way to get people accustomed to living in a feedback-rich environment. When done well, 360 degree feedback systems can lead to positive change and enhanced effectiveness at the individual, team, and organizational levels Wimer, p. 2).

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