Best Practices in 360 Degree Feedback, Performance Management and Succession Planning

By Diane Whittaker and Dianne Anderson

In the past 15 years, multi-rater feedback, more commonly known as 360 degree feedback, has become a well-regarded and valuable strategy for many organizations. Estimates suggest that between fifty and ninety percent of large organizations currently use 360 degree feedback. Its popularity has given rise to a debate about how best to use it. Should 360 degree feedback be used exclusively for development or can it also be used effectively for performance management and succession planning?

This document outlines current best practice for using 360 degree feedback for developmental purposes only.

Defining 360 Degree Feedback

360 degree feedback is a process whereby participants receive feedback from a variety of sources, commonly including their manager, direct reports and peers. Other sources may include colleagues, customers, friends and family. The feedback is typically collected on-line, the numerical and qualitative data is assembled verbatim, and a report is given to the participant. The feedback is usually anonymous and confidential.

Use of 360 Degree Feedback for Development

Initially, 360 degree feedback gained popularity as a tool to assist in the professional development of individuals. Using this approach, the anonymous and confidential process gives raters the opportunity to share thoughts and feelings they would hold back in face to face conversations. Additionally, if the feedback is used for development purposes only, participants usually view the results, both positive and negative, at face value; they know the raters have nothing to gain or lose through their participation. If similar feedback is received from a variety of sources, whether positive or negative, the participant knows the impression he or she is giving is landing in a similar way with a variety of people.

Some participants, particularly those in senior positions who don’t regularly get feedback, have reported the process to be life-changing. Even without this level of emotional response, most participants report that 360 feedback results are extremely helpful; they learn how they are perceived by others, and they can adjust their behaviour to be more effective. Ideally, if the 360 process is repeated a year or two after the initial experience, participants have the opportunity to measure their own progress.

Finally, when the results are handled well by participants, the relationships between the participants and their raters can improve substantially. When participants are non-defensive and appreciative of all of the results from the 360 feedback, those around them tend to express thoughts and feelings more openly. Working relationships naturally improve leading to greater team and organizational effectiveness.

Other Uses of 360 Degree Feedback                                                                                                

After the initial wave of popularity of 360 degree feedback, some organizations began to consider using it for other purposes such as performance management and succession planning. The problem is that when the purpose of 360 degree feedback is changed, so changes the way raters approach it and the way participants receive it. If those involved know that the 360 degree feedback results will be used to manage performance, determine pay or bonuses, and/or create or eliminate opportunities for advancement, raters can tend to be either overly positive or overly negative. The raters’ rationale for being overly positive can include a desire to be seen as a positive team player or a desire to help the participant get a raise, a bonus or a promotion. When the chance to earn more money becomes involved, raters may be influenced by perceptions about how much someone needs the pay increase, bonus or promotion.

The possibility for arrangements of reciprocal ratings also exists; a leader can ask a direct report rater to provide high ratings in exchange for a positive performance review or other reward. The rater’s rationale for being overly negative can include a desire to block a peer or manager from advancement so the rater himself or herself has a better opportunity for the same incentive. In the extreme, raters can take the anonymous opportunity to take revenge for a perception of unfair treatment by the organization or for a personal vendetta. On the participant side, those receiving the feedback have a harder time taking the feedback at face value given the discussion above. They know all that is at stake, and they commonly believe that the true opinion of the rater is only one factor in the feedback ratings. In summary, whether the ratings are overly positive or overly negative, the process has been tainted and neither the participant nor the organization can rely upon the 360 degree feedback results.

Optimum Use of 360 Degree Feedback

Using 360 degree feedback exclusively for development is most effective for most organizations. If an organization wants to expand the use of 360 degree feedback, it should consider doing so only when the process is firmly and successfully entrenched in the organization – and that usually takes three to five years from the introduction of 360 to the entire organization.

 

Best Practice Advice for Positive Impact using 360 Degree Feedback

  1. Clarify the purpose for every participant and the organization (leadership self-development)
  2. Start at the top of the organization and demonstrate “buy-in”
  3. Clarify rater anonymity, confidentiality, accountability (deadlines for completing the questionnaire, etc.), the selection process (participant selects raters), who receives the feedback report, etc.
  4. Prepare participants by providing an upfront discussion to answer questions
  5. Ensure participants review and interpret feedback results with a qualified person who has experience with the instrument and can manage reactions
  6. Develop an action plan to facilitate behaviourial change
  7. Encourage employees to share results and feedback with their supervisor and ideally with their team

Written by Diane Whittaker (Whittaker Melnike Group) and Dianne Anderson (Hunter Anderson Group), all rights reserved, 2013