Case analysis of 360 degree feedback

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1 Case analysis of 360 degree feedback Sapna Ghutke (Author) D2-504, Nisarg Nirmiti, Pimple Saudagar, Pune-27 Raksha Jaiswal (Co-Author) 268, Darda Marg, Rahate Colony, Wardha Rd, Nagpur-22 Dr Asha Thakur (Guide) E 503, Shiv Heights, Prithvirajnagar, Beltarodi, Nagpur-34 ABSTRACT Today s corporate world can be characterized as highly competitive, technology and system driven, customer centered, acting with speed, cost and quality conscious, fast changing and greatly competitive. To survive, in this transformed situation one has to compete with those who have technological advantages, financial advantages, system advantages, communication advantages and above all with those who have people advantages in terms of competencies, attitudes and work culture. In such a situation, companies need to have extremely competent top level managers to lead them; leaders who can perform leadership and institution building roles very effectively by balancing short-term targets with long-term organisation building concerns. They need to encourage and develop their staff. They need to be customer driven and quality driven. An organization s goals can be achieved only when people put in their best efforts. In order to make sure whether an employee has shown his or her best performance on a given job, there is a need for performance appraisal. In this regard, 360 degree feedback is a great tool to help the manager as well as subordinate to discover his/her strengths, weaknesses and other qualities which are not noticed by him/her. In this research paper, the case analysis of the selected companies, implementing 360 degree feedback has been done. Since, 360 degree feedback is one of the methods of performance appraisal, it is crucial to first discuss the concept of appraisal. After the discussion of performance appraisal, 360 degree feedback is explained in detail. This is followed by the case analysis. Later, the strategies for successful implementation of 360 degree feedback are discussed followed by the limitations and conclusion. General Terms Employee, leadership behaviour, leadership, case analysis Keywords Performance, appraisal, 360 degree feedback, leadership, 1. INTRODUCTION Human Resource Management in each firm is the toughest job of a manager as humans are contradicts with their attitudes, aspirations, assumptions and psychology. An organization faces most challenges and frustrations which are directly connected to the people. HR managers must have specific competence to preclude s in technology and make their subordinate staff suitable for the changes that are likely to take place. An organization s goals can be achieved only when people put in their best efforts. How to ascertain whether an employee has shown his or her best performance on a given job? The answer is performance appraisal. Employee evaluation is one of the basic jobs of HRM, but not an easy one though. 1.1 Definition of Performance Appraisal In simple terms, performance appraisal may be understood as the assessment of an individual s performance in a systematic way. The other terms used for performance appraisal are: performance review, performance evaluation, personnel appraisal, employee assessment, performance measurement, employee evaluation, personnel review, staff assessment, service rating, merit rating etc. A formal definition of performance appraisal is: It is the systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for. 2. WHAT IS 360 DEGREE FEEDBACK? 360 degree feedback is one of the methods of performance appraisal. Though it was started in the mid eighties at the IIM- A by T V Rao and his team as a Top Management Styles and Organisation Effectiveness programme, it was not branded till 1998 as 360 degree appraisal. Once it was branded in the United States as 360 degree appraisal, it caught the attention of many corporations and today a large percentage of Fortune 500 companies use it in one form or the other. The German military first began gathering feedback from multiple sources in order to evaluate performance during World War II. This system or process of employee evaluation was for the first time harnessed by General Electric in 1992 in the United States. The first organization which implemented 360 degree feedback was Maruti Udyog Limited in the year 2007 in India. During the last twenty years, the concept of appraisal based on multi-sources was discussed and experimented in a big 202 P a g e O C T O B E R

2 manner under the banner of 360 degree feedback. The concept was understood as all round feedback, multi-rater feedback, peer appraisal and upward feedback. Now certain other terms have also cropped up such as 540 degree feedback, 400 degree feedback, 360 degree appraisal and 180 degree feedback. These terms, in fact, represent various ways of describing multi-level, multi-source feedback systems. Basically, the numbers in degrees specify different rater groups. Like 180 degree feedback speaks about the top-down and bottom up feedback system. Similarly, the use of greater numbers in degrees indicates feedback by more groups across the organization. The mechanism of 360 degree feedback differs from normal evaluation in that the feedback comes from many sources, thereby providing a more balanced evaluation that is usually more acceptable as fair and objective. Since it is a multiple source feedback and comes anonymously, it provides executives with relatively free and fair evaluation. 2.1 Definition of 360 degree feedback Peter Ward in his book 360 degree Feedback-A Management Tool, defined 360 degree feedback as the systematic collection and feedback of performance data on an individual or group derived from a number of stakeholders in their performance. Here as shown in the Figure1 below, the stakeholders are boss, team members, peers, customers, subordinates and above all the subject himself. Figure1. Sources of feedback (Image Source: Multi-rater answers the questionnaire anonymously and the evaluation is consolidated by an external or internal agent for preparing the feedback profile, which is given to the individual for a performance review discussion session. The system has the possibility of a large number of variations. It is considered as a tool for competence identification and. 2.2 Objectives The objectives of the 360 degree feedback system are as follows: Identification of al needs and preparation of plans more objectively in relation to current or future roles, to facilitate performance improvements for an individual or a group of individuals. Provision of insights into the strong and weak areas of a candidate in terms of the effective performance 203 P a g e O C T O B E R of roles, activities, styles, traits, qualities, competencies, etc. Impact of knowledge, attitude and skills. Reinforcement of other change management efforts and interventions directed at organisation effectiveness. These may include: TQM efforts, customer-focused or internal customer satisfaction enhancing interventions, flat structures, qualityenhancing and cost-reducing interventions, decision process changes, etc. Generation of data to serve as a more objective basis for rewards and other personal decisions. Alignment of individual and group goals with organisational vision, values and goals. Basis for performance-linked pay or performance rewards. Aid of in culture building and leadership and team building. Planning of internal customer satisfaction improvement measures. Increase in role clarity and accountability. 2.3 How does the 360 degree feedback system work? The most vital document for the feedback system is the questionnaire which can be called as a 'rating form' with a series of statements about the individual's concern for his behaviour and effectiveness linking to competence. The selection of raters is also very essential. In most cases, the raters are chosen from among the persons who contribute to the rating process and are in the best position to comment on the performance of individuals. Since all concerned persons such as the boss, customers, peers, team members and subordinates are involved as raters, their numbers may be high, ranging from five to twenty-five depending upon the nature of work and the role played by the appraisee. The individual who is being assessed is also asked to make selfratings, which may be scrutinized to assess any differences of opinion. After this comes the feedback process, which starts from the person who collects the feedback, then comes the feedback record, viz. how the data are represented and finally the style in which the information is conveyed to the individual. Anonymity is maintained in the system and it becomes complicated to identify important differences in the perspectives of subordinates, peers and others involved. Since the ratings are averaged it cannot be found out as to which group gave a high or low assessment. This process can be summarised as follows: 360-degree feedback process: Step1: Design and authorization of feedback questionnaire Step2: Presentation to elucidate process to all participants Step3: Completion of confidential feedback forms Step4: Feedback of individual results and conformity of future action plan with trained 360 degree trainers

3 Step5: High level report outlining key themes emerging from 360 degree process 3. CASE ANALYSES Three companies implementing 360 degree feedback are selected randomly for the analysis. The selected companies are: PepsiCo, Philips and Starwood Hotels. The case analysis of 360 degree feedback in these companies is as follows: 3.1 Case1: PepsiCo PepsiCo is the world s second-largest food and beverage business and the global snack leader. It employs over 285,000 people worldwide. The company wanted to implement a programme to better develop leaders using 360 degree feedback. The main challenge was to develop reliable leadership behaviours across all markets. ETS, a software company have created a more flexible and intuitive online 360 system, allowing their leaders to get more effective feedback. Erica Desrosiers, Director, Organisation and Management Development at PepsiCo found that employees have been very dedicated to the programme. The senior leaders clearly see the value of this process, up to and including their CEO. Having such senior level support for the programme is excellent. As a result, they get response rates consistently above 90%, which really demonstrate their employees and leaders commitment, involvement and engagement in the process. The 360 degree data helps individuals to develop and embedding consistent leadership behaviours since the 1980s. It has been central to PepsiCo s al strategy ever since and has become an ingrained part of the PepsiCo culture. 3.2 Case2: Philips Philips is one of the world s leading diversified technology companies, primarily focusing on healthcare, consumer technology and lighting. The main business objective for Philips was to introduce a new 360 degree feedback programme that would better enable of its employees. Magdalena Bracco, HR Group Project Leader, Center of Expertise Leadership, Talent and Learning at Philips, explains, We really believe in the power of feedback to grow our employees and the 360 tool is the starting point for effective conversations and plans. The 360 degree feedback tool was designed to be easy for employees to use an essential requirement given the fact that it would be used by employees all over the world. Participants principally like the fact that the 360 feedback questions are connected to the new competency framework. This means that they get an insight into their strengths and areas in relation to key business or leadership competencies. Perhaps most importantly, in terms of the 360 feedback process leading to behavioural change, people are finding that the reports are easily-actionable. Magdalena Bracco adds, The business impact has been powerful in helping peoples. For us as a business, it s invaluable as great leadership is critical to our continued success. 3.3 Case3: Starwood Hotels Starwood Hotels & Resorts Worldwide, Inc. owns, manages and franchises some of the most well-known brands in the hotel industry. With over 1,000 properties and approximately 145,000 employees, Starwood is one of the world's largest hotel companies and one of the well-respected in the industry. Starwood wanted to provide a valuable al offering for all leaders across the global organization. The first step in the 360 feedback implementation process was to make sure the 360 survey items not only included core leadership skills but also those constructs such as critical thinking, emotional intelligence and global perspective. The Human Resources team at Starwood wanted the 360 degree feedback data to provide their leaders and the overall organization with a solid foundation for making leadership decisions. The 360 degree feedback data allowed the team to address a variety of individual and organizational aspects. The HR leadership team, along with other executives at Starwood, now has actionable talent data from which to create many different leadership initiatives such as specific programs targeted at common opportunity areas. Analyses of the above three cases are summarized in Table1: 204 P a g e O C T O B E R

4 Table1. Summary of case analysis of PepsiCo, Philips and Starwood Hotels Name of the company Challenge Solution Result Development PepsiCo Build up reliable Integrated 360 degree 360 degree feedback Leadership leadership behaviours system that s easy-to- system helping behaviours across all markets use individuals to develop and embedding reliable leadership behaviours Philips Better facilitate Created a 360 degree Powerful business Employee employee feedback programme impact, helping build in line with key to centre employee up employees competencies capability in line with business strategy Starwood Hotels Provide a valuable Conducting 360 Actionable talent Leadership al degree feedback to data is available contribution for all help leaders from which to create leaders across the understand their many diverse global organization unique strengths leadership initiatives 4. GUIDELINES FOR THE SUCCESS OF 360 DEGREE FEEDBACK While implementing the 360 degree feedback system it is necessary to gain employee acceptance at the beginning. It is important to make the strategies for the success of 360 degree feedback. Some of the guidelines which will help make the system fair and accurate are discussed in this paragraph. The 360 degree feedback will be successful by: 205 P a g e O C T O B E R Making sure that the 360 degree feedback system is consistent with the culture of the organization and the expectations of the employees. Conducting an information campaign that highlights the benefits and fairness of 360 feedback and outline the process in detail. Ensuring that the rating instruments are relevant, legitimate and reliable. Emphasizing the significance of the raters being familiar with the employee's performance and provide raters the opportunity of opting out if they are not.

5 Encouraging and training the appraiser to provide accurate ratings. Promoting a participative environment where individual feedback is rewarded. Administering the performance appraisal system regularly and consistently. Continuing to communicate information about the 360 degree feedback system. 5. LIMITATIONS 360 degree feedback system is time consuming and complex in administration. There is a requirement of training and significant efforts in order to achieve efficient working of 360 degree feedback system. Feedback can be of no use if it is not carefully and smoothly dealt. Can impose an environment of suspicion if the information is not openly and honestly managed. 6. CONCLUSIONS The 360 performance appraisal system enables the appraisee to gain a better insight into his/her strengths and weakness. Because of 360 degree feedback system personnel now have an improved understanding of how others in the office perceive him/her so that he/she can excel at his/her job and contribute towards the growth and of the company. From the case analysis as in section 3 above it is clear that the multiple levels and sources of appraisal data, in fact, lead to a more objective and well-rounded picture of an individual's contribution, strength and needs. In a nutshell, a shift in emphasis should be expected from the use of "360 Degree Feedback" as a al device to a method of appraisal. It can be treated as an assessmentoriented approach to appraisal. There has been remarkable progress in the adoption of this system by various organisations as more and more of them are getting attracted towards it because it facilitates a shift towards a less hierarchical, more flexibly structured and knowledge-based organisations of the future. 7. REFERENCES [1] Dewakar Goel (2008), Performance Appraisal And Compensation Management: A Modern Approach, Eastern Economy Edition, PHI Learning Pvt. Ltd., [2] Kothari, C. R. (2005), Research Methodology, Second Edition, New Age International Publishers, New Delhi. [3] Tapomoy Deb (2008), Performance Appraisal And Management, First Edition, Excel Books India, New Delhi. [4] K. Aswathappa (2005), Human Resource And Personnel Management, Fourth Edition, Tata McGraw- Hill Education, New Delhi. [5] T. Venkateswara Rao, Raju Rao, 360 Degree Feedback and Performance Management System, Second Edition, Excel Books India, New Delhi. [6] Dr. Satyawan Barodal, Chhavi Sharma, Jyoti Kandpal Bhatt, 360 Degree Feedback Appraisals- An Innovative Approach of Performance Management System, International Journal of Management & Information Technology ISSN: Volume 1, No 2, July, [7] Shilpa Wadhwa and Parul Wadhwa, A Study of 360- Degree Appraisal and Feedback System for Effective Implementation in Indian Corporate Sector, VSRD- IJBMR, Vol. 1 (4), 2011, [8] Ashima Aggarwal, Gour Sundar Mitra Thakur, Techniques of Performance Appraisal-A Review, International Journal of Engineering and Advanced Technology (IJEAT) ISSN: , Volume-2, Issue-3, February P a g e O C T O B E R