Is your company re-thinking 360-degree feedback?

360-degree feedback is a hotly debated topic today. It uses surveys to gather anonymous feedback about managers or employees from peers, subordinates and higher-level executives as input to their performance evaluation. It took off in the 1990s when companies began to use complex 360-degree tools with normative benchmark data from vendors, such as Personal Decisions Incorporated and The Center for Creative Leadership, or internally developed tools based on the company’s leadership competencies.

Is it effective?  The answer from most studies is that it isn’t, largely because the process is poorly designed and implemented!  In their human capital index study, Watson Wyatt, for example, discovered that 360-degree feedback was associated with a decrease in financial performance because of the misguided way organizations implemented the process.[i]

So where did 360-degree feedback go wrong?

1. It links feedback to performance management, merit pay or promotions, so ratings are inflated.[ii]
2. Comments traced back to individuals can cause resentment between workers.
3. The feedback tool is often used stand-alone, without follow up conversations or development plans.
4. Excessive numbers of surveys are required of each worker, with few tangible benefits provided to individuals. Workers can become worn out by a useless process.[iii]
5. Little or no training is given to managers, recipients and raters on the purpose of the feedback, how to give feedback, and how to establish and follow up on developmental actions.[iv]
6. The process can receive insufficient top management support, which leads to poor implementation.[v]

Stinging criticism

Marcus Buckingham, who wrote First, Break All the Rules, co-authored Now, Discover Your Strengths, and helped create StrengthsFinder, gave stinging criticism of conventional 360-degree feedback in a recent Harvard Business Review article:

All but a very few 360-degree surveys are, at best, a waste of everyone’s time and, at worst, actively damaging to both the individual and the organization. We could stop using them right now, and our organizations would be the stronger for it.[vi]

Buckingham’s main criticism with 360-degree surveys is with the “bad data” collected when raters are asked to assess managers on various competency behaviors, such as clarity of vision or being a good listener.  He maintains that raters are unreliable when rating their manager’s behavior. Instead, they are only reliable rating their own feelings and emotions. So, rather than rating the manager on, “Marcus is a good listener,” the rater should answer questions like,“ I feel that my opinions are heard.”

Buckingham also faults 360-degree feedback for poor sampling design. “Your raters are a non-random group of people who happen to work with you or report to you. In statistics we call this a ‘skewed sample.’ Add up all the ratings, and you do not get an accurate, objective measure of your leadership behaviors. You get gossip, qualified.”[vii] The reaction to Buckingham’s article in various blog posts was mixed.

What are we to make of 360-degree feedback?  360-degree feedback still provides a broader assessment of an employee’s competencies than the manager can determine without it, but it is time for an overhaul at most companies.  Greater care needs to go into its design and implementation: purpose, timing, implementation steps, and the resulting action plans.

These are my recommendations:

1. If the process does not have the support and participation of top management, don’t do it.
2. 360-degree feedback is most successful when it is used for development purposes, particularly when a leader is at a transition point, such as a new assignment or promotion. It is also beneficial for developing high potential employees.
3. Keep the surveys short, no more than 20 minutes to complete.
4. Development 360s are successful when the purpose is clear to all, and everyone is aware of their role as the rater, manager, recipient or feedback provider.
5. Use a competent vendor who has the research behind their approach.
6. It is vitally important to make sure a follow-up action-based development plan is put into place, with monitoring and consequences.
7. Don’t gather feedback on everyone, every year. You will wear the organization out, and the quality of the feedback will suffer.
8. Consider Marcus Buckingham’s suggestion on manager feedback – scrap traditional 360-degree feedback surveys that ask employees to rate managers on various competencies. Instead, use short surveys that ask employees about their feelings when working with the manager and their understanding of the company’s strategies and goals.

If your company uses 360-degree feedback surveys, what recommendations or new approaches do you have?

Victor Assad is a strategic human resources consultant and coach who works with key decision makers and human resources leaders on talent management, accelerating change, leadership development, and other strategic initiatives such as mergers and acquisitions, strategy implementation, and flexible workplace.  Please e-mail Victor at victorassad6@gmail.com or visit Victor’s website at www.victorhrconsultant.com for free articles and white papers.

[i] “HR Practices—Human Capital Index Study.” (October 17, 2005) Watson Wyatt.  Abstract.  Retrieved from facultu.wiu.edu/E-Solymossy/Presentations/Mgt%20570/Human%20Capital%20Index.pdf.

[ii] Marcus Buckingham. (October 17, 2011). “The Fatal Flaw with 360 Surveys.” HBR Blog Network. Harvard Business Review.  Retrieved from blogs.hbr.org./2011/10/the-fatal-flaw-with-360-survey/

[iii] Terri Linman. (2004) “360-degree Feedback: Weighing the Pros and Cons.” Retrieved from edweb.sdsu.edu/people/arossett/pie/Interventions/360_1.htm

[iv] John W. Fleenor and Jeffrey Michael Prince. (1997) Using 360-Degree Feedback in Organizations, An Annotated Bibliography. Center for Creative Leadership. Greensboro, North Carolina. Retrieved from www.ccl.org/leadership/pdf/research/Using 360Feedback.pdf.

[v] Jack Zenger and Joseph Folkman. (September 7, 2012). “Getting 360-Degree Reviews Right.” HBR Blog Network. Harvard Business Review. Retrieved from Blogs.hbr.org/2012/09/getting-360-degree-reviews-right/

[vi] Marcus Buckingham. (October 17, 2011). “The Fatal Flaw with 360 Surveys.” HBR Blog Network. Harvard Business Review.  Retrieved from blogs.hbr.org./2011/10/the-fatal-flaw-with-360-survey/

[vii] Ibid.