Not all management trends stand the test of time — how does 360-degree feedback fall short?
When it comes to monitoring and promoting effective performance, there are a number of performance management tools and techniques employed by companies around the world. Some of these are new, while some have existed for many years and continue to be popular today, despite studies demonstrating their innate drawbacks. In this blog, we’ll explore the concept of 360-degree feedback and why we at Clear Review believe it is a management trend that will continue to fall in popularity as the years go by. We’ll also discuss why continuous feedback results in a healthier feedback culture.
What Is 360-Degree Feedback?
360-degree feedback (also known as multi-source feedback and multi-rater feedback) dates back to the 1950s and quickly became popular. By the 1990s, most organisations were making use of the tool, although, over the years issues have come to light that call into question its efficacy. 360-degree feedback seeks to provide all employees with the opportunity to receive feedback from everyone they work with, including their peers, customers and supervisors. In theory, this results in a more well-rounded and informative performance review. In order to conduct 360-degree feedback, modern companies utilise software and lengthy forms.
1. You’re Pitting Employees against Each Other
In order to create and maintain a healthy company morale, employees need to experience an atmosphere of teamwork and collaboration. 360-degree feedback often flies in the face of this and has been described as coming “from the same Godzilla world as Forced Ranking and Bell Curve Performance Reviews and all that garbage.”
According to a New York Times article, 360-degree feedback has resulted in hurtful and unproductive comments such as “stop using your looks and personality to get things done” and “I never really liked you.” The same article points out that employees being considered for promotion might invite envious and damaging comments in order to serve an agenda. On top of this, people with an axe to grind might view 360-degree feedback as an excuse to exercise revenge, while it also provides managers with an opportunity to exercise their superiority. None of this is helpful when it comes to forming an accurate picture of an employee’s performance.
2. They Take Far Too Long to Complete
Time is money in any organisation and, for this very reason, annual appraisals are falling out of favour. For similar reasons, 360-degree feedback is simply not a good use of company time.
When we consider the timescale, the average manager needs to be aware of the fact that it takes 1 – 3 weeks to communicate the purpose of the 360, while explaining the process and how the feedback will be gathered and used. It then takes a further 1 – 2 weeks to select raters. Distributing surveys takes up to one week, and completing 360-degree questionnaires takes roughly 2 – 4 weeks. After this, reports need to be produced, which typically take 1 – 2 days and feedback meetings need to be conducted, which take 1 – 2 hours per participant. Finally, a development plan needs to be created, which takes a further 1 – 2 weeks. In all, the whole process can take between 6 – 12 weeks. This represents a lot of man-hours for a process that also needs to be repeated every year.
3. The Issue of Confidentiality
A core element of 360-degree feedback is confidentiality. Reviewers need to be able to deliver open, honest feedback without the concern that a close colleague or friend might be hurt or angered by the feedback.
However, this anonymity presents some problems. For example, if the 360-degree process is indeed completely anonymous, employees might be more inclined to leave unhelpful comments or target coworkers they have issues with.
On top of this, anonymity means that employees are completely unable to respond to feedback they find unfair or unhelpful. They are also unable to ask for clarification on comments, which means they are unable to make any meaningful improvements.
4. The Innate Lack of Objectivity
Objectivity is always an issue in terms of performance evaluations. You might assume that this problem would be resolved, or at least alleviated, by having multiple opinions or viewpoints on an individual’s behaviour. After all, whatever objectivity one person lacks, it must surely be compensated by the opinions of multiple others. However, this simply isn’t the case. Each individual rater is human and, therefore, as unreliable as the next. The result is a poor data yield, which isn’t helpful to the employee, to the manager or to the company.
5. Employees Are Asked to Change Too Much at Once
One of the biggest problems with 360-degree feedback is that once the questionnaires are collected and information disseminated, the employee is left with a huge (and overwhelming) amount of data. This means they will have a large number of suggestions on how they can improve their performance in the coming months. However, changing behaviour is difficult. Employees can certainly change ingrained habits, but attempting to do too much at once is a recipe for disaster. It is better for employees to construct simple SMART objectives, which they can track and steadily work towards.
6. Generally, Data from 360-Degree Feedback Is Unreliable
Given how long the 360-degree feedback process takes and how many people are involved, you would hope that the result is a collection of reliable and informative data. Unfortunately, this is rarely the case. As a Harvard Business Review article states, “data generated from a 360 survey is bad. It’s always bad.” The same article even goes so far as to say “360-degree surveys are, at best, a waste of everyone’s time, and at worst actively damaging to both the individual and the organization.”
In fact, the US military has even criticised its own use of 360-degree feedback, as it had ongoing problems with reliability and validity. One study showed that the length of time a rater has known the employee being evaluated had a significant effect on the accuracy of a 360 review. The study found that if individuals knew employees for “one to three years”, they gave fairly accurate reviews. They gave inaccurate reviews of those they knew for less than a year and more long-term employees, who they tended to generalise, either favourably or unfavourably.
7. 360 Reviews Haven’t Been Shown to Improve Performance
Given the issues with objectivity and inaccurate data, it will come as no surprise that there is no evidence to suggest that 360 reviews actually improve company performance. In fact, one study found that such feedback was associated with a 10.6% decrease in market value, further stating 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.”
8. There Is Too Much of a Focus on the Negative
At Clear Review, we advise that managers focus on the positive during coaching conversations. Positive feedback has been linked to more favourable performance and productivity levels. Unfortunately, 360-degree feedback focuses far too much on the negative, with employees generally disregarding strengths. This is usually done with good intent — employees want to highlight weaknesses, so they can address them. However, an onslaught of negativity is not the best way to motivate and encourage employees, particularly when they are feeling vulnerable and judged.
Instead of 360-Degree Feedback, Choose Continuous Feedback
Continuous performance management offers an alternative to 360 feedback. Instead of dealing with a multitude of opinions and suggestions, the employee and manager can meet frequently to discuss a performance action plan going forward, with specific SMART goals and learning objectives set. This builds a healthier feedback culture in the long term and results in more confident, capable and content employees.
Clear Review are experts in performance management and can help you revitalise and update your performance management system. To find out how our performance review software can help you, book a free demo today.