THE BATUK. Published by:

Transcription

1 112 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 ISSN THE BATUK Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 Published by: Nesfield International College (NICOL) Under the Management of Nesfield Education Foundation Lalitpur, Nepal

2 24 THE BATUK: THE BATUK: Journal of Journal Interdisciplinary of Interdisciplinary Studies Studies Vol. 2 No. 1 Vol. 2 January 2016 No. 1 ISSN January Degree Feedback: A Balanced System for Performance Evaluation and Employee Development Makshindra Thapa Lecturer, Tribhuvan University Visiting Faculty, Nesfield International College tmakshindra@yahoo.com Abstract 360-degree feedback is a latest tool for employee performance appraisal and personal development. It provides greater support on employee performance management, development, compensation and other HR decisions. Unlike to traditional single boss based performance evaluation, it applies multi raters including peers, team members, customers, subordinates, clients, individual managers and other concerned people. It reduces chances of inequity and provides more reliable performance picture of every worker. The careful application of this system needs considering critical success factors. Achievement of more benefit of the feedback depends on active participation, mutual understanding and cooperation between management and workers. Key Words: Performance Evaluation, Performance Rating, Feedback, Rater, Participation Background Any company that s going to make it in the 1990 s and beyond has got to find a way to engage the mind of every single employee. If you re not thinking all the time about asking every person more valuable, you don t have a chance. What s the alternative? Wasted minds? Uninvolved people? A labor force that s angry or bored? That doesn t make sense. - John F. Welch, CEO, General Electric In organizational settings, the application of performance appraisal has been limited to a feedback process between employees and supervisors. All the methods of employee performance appraisal are based on superiors who judge, evaluate and rate performances produced by their subordinates. Performance evaluation determines inevitable base for decisions related to promotion, transfer, development etc (Bracken & Rose, 2011; Maylett 2009). Generally, traditional 24

3 Thapa: 360 Degree Feedback 25 reviews are engaged in identifying either excellent performers or poor performers, but don t differentiate well among the performers in the middle. Managers struggle with evaluations of employees who fall within the middle group and this becomes a problem when reviews are used as the basis for salary adjustments and bonuses. Rater carelessness; use of appraisals for political or personal reasons; the halo effect, where an employee s strengths in one area are spread to other areas, stereotyping where by an employee is judged on the basis of his single trait are all additional drawbacks with traditional performance appraisals. The German military began with gathering feedback from multiple sources in order to evaluate performance during World War II (Fleenor & Prince, 1997). Others also explored the use of multi-rater feedback during this time period. One of the earliest recorded uses of surveys to gather information about employees occurred in the 1950s at Esso Research and Engineering Company (Bracken, Dalton, Jako, McCauley, & Pollman, 1997). From there, the idea of 360-degree feedback gained momentum, and by the 1990s most human resources and organizational development professionals understood the concept and consequences of multi-rater feedback. It got more popularity since almost (90 %) of fortune 500 listed companies applied this multi layered method as an advance tool not only for performance evaluation but also for determining training & developmental need to their human capital (Edwards & Ewen, 1996). In recent days, with the increased focus on teamwork, employee development, and customer service, the emphasis has shifted to employee feedback. Organizations have been interested to apply the multi layered or multi rater performance evaluation system in the place of single rater evaluation. There is no harm using a variety of rating sources, in addition to the employee s supervisors, for assessing performance. Many research outcomes in this context have shown assessment approaches with multiple rating sources provide more accurate, reliable, and credible information. The 360 degree review process is proven to be superior to traditional forms of evaluation and feedback because it provides more complete and accurate assessment of the employee s competencies, behaviors and performance outcomes. A traditional performance review, where one supervisor assesses a subordinate, is no longer seen as an effective and balanced means of obtaining accurate feedback for employees. With traditional reviews, employees are rated by a single person, who may be biased or have an incomplete view of their work. With contrast to traditional techniques, 360-Degree feedback is aimed at improving performance by providing a better awareness of strengths and weaknesses. The employee receives

4 26 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 feedback, in anonymous form, on performance ratings from peers, superiors and subordinates (Kaplan & Palus, 1994). What 360 degree feedback is? 360-degree feedback, in human resources or industrial psychology, is also known as multi-rater feedback, multi source feedback, or multi source assessment, is feedback that comes from members of an employee's immediate work circle. Most often, 360-degree feedback includes direct feedback from an employee's subordinates, peers, and supervisor(s), as well as a self-evaluation. It can also include, in some cases, feedback from external sources, such as customers and suppliers or other interested stakeholders having regular interplay with employees. A 360 degree performance review is a formalized process whereby an individual receives feedback from multiple individuals or raters who regularly interact with the person being reviewed, commonly referred to as the learner. The use 360-degree feedback for appraisal purposes is based on a Theory X philosophy that says we have to force our managers to change. Once again, it s the old command-and-control philosophy about managers: They re lazy and they re not going to change unless we bring out the club and hit them over the head with it at performance-appraisal time. Using 360-degree feedback for development is more of a Theory Y approach that says that people do care about being effective, and they re going to use data to be more effective (Pollman,1997). The objective of this evaluation technique is to provide the employees with feedback on their performance behaviors and outcomes as well as their potential, while identifying and establishing development goals. It incorporates feedback from the worker, his/her peers, superiors, subordinates, and customers as shown in the figure presented below, with administering confidential surveys. Results of these confidential surveys are tabulated and shared with the worker, usually by a manager. Interpretation of the results, trends and themes are discussed as part of the feedback. The primary reason to use this full circle of confidential reviews is to provide the worker with information about his/her performance from multiple perspectives. From this feedback, the worker is able to set goals for self-development which will advance their career and benefit the organization (Waldman et al., 1998).

5 Thapa: 360 Degree Feedback 27 Figure 1 Potential sources of 360 degree feedback Source: Nowack K.M. (2011). Why 360 Degree Feedback Doesn t Work and What to Do About It. IPAC 2011 Conference. The 360-degree feedback appraisal, also known as multi-source assessment or full circle feedback, gathers evaluation data from all of those who work most closely with the person being evaluated, regardless of position. The collective intelligence of these people provide the appraise a clear understanding of personal strengths as well as areas that need further development (Edwards & Ewen, 1996). The results from a 360-degree evaluation are often used by the person receiving the feedback to plan and map specific paths in their training & development. Results are also used by some organizations in making administrative decisions related to pay and promotions. 360 degree feedback allows each individual to understand how his effectiveness as an employee, coworker, or staff member is viewed by others. The most effective 360 degree feedback processes provide feedback that is based on behaviors that other employees can see. The feedback technique is very crucial as it provides insight about the skills and behaviors desired in the organization to accomplish the mission, vision, and goals and live the values. The feedback is firmly planted in behaviors needed to exceed customer expectations.

6 28 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 People who are chosen as raters, usually choices shared by the organization and employee, generally interact routinely with the person receiving feedback. How 360 degree reviews is advanced than more commonly used feedback techniques? Conventional performance appraisal systems cannot fulfill need of identification and evaluation of more convenient performance level of the workers. The supervisor-only performance appraisal is subjective and relies on the supervisor s judgment. They are time-consuming and are generally disliked by those who give and receive them. They are typically given once a year assessing the employees work performance from a subjective point of view and providing management information for decisions on pay and promotions (Edwards & Ewen, 1996). Moreover 360 Degree Feedback improves the quality of performance measures by using multi-raters providing a more balanced and comprehensive view. The information is more reliable, valid and credible because the providers interact regularly with the employee at work (Edwards & Ewen, 1996). 360 degree feedback technique is more dynamic and advanced system in evaluation of performance and developmental purpose of workforce. The justification of the fact can be argued in the following background; i. Accuracy of Feedback- 360 degree feedback is viewed as more accurate because, by nature of the process, it offers feedback on observed behaviors and performance from a circle of raters, as opposed to subjective viewpoints from a single individual. Multiple raters offering similar feedback will send a reinforced message to the employee about what is working well and what needs to be improved. Feedback is more difficult to ignore when it is repeatedly offered by multiple sources. This alternative method can provide a more balanced view. This performance review process intends to provide a more global and accurate view of the employee s performance. ii. Acceptance of Feedback- While traditional performance reviews offer a single or limited viewpoint, the 360 degree review offers feedback from many sources. There is a possibility that multi-rater feedback from a 360 degree review is more likely to be accepted by the employee. Once an individual accepts feedback there is an increasing likelihood of behavioral change and performance improvement. Employees may find the methodology of a 360 degree review to be more thorough and unbiased than traditional evaluations. iii. Lack of agreement on performance criteria- Most of performance evaluation criteria in conventional methods are established by management and in most

7 Thapa: 360 Degree Feedback 29 of the cases without considering employee opinions. The application of scientific job analysis and job design may not be prevailing hence performance evaluation becomes mere a subjective judgment. Employees lack confidence on those one man based performance evaluation criteria. In 360 degree approach multi raters evaluate an employee s performance using varieties of criteria including quantitative and qualitative aspects of his/ her performance and general behavior that enhances evaluation result acceptance by employees. iv. The inability to handle lots of information- Evaluating performance of even a single employee seeks systematic observation, analysis, recording and retrieving lots of work and behavior related information and data. It is somehow impossible to maintain and handle this bundle of information by a single rater. This tendency ultimately results in incomplete and biased rating of employee performance. In 360 systems different dimensions of performance are evaluated by different raters and unlike traditional systems there is no burden to single person processing and managing all information. Evaluations become more reliable because a single person s multiple dimensions are judged by multi raters. v. Concern about self image- In traditional techniques the raters reaffirming their values while reviewing performances of their subordinates. Their cultural background, attitudes, ego and relation with employees play vital role. Some of the superiors use evaluation as time to prove their supremacy by threatening to others and to create undue influences. 360 degree review can minimize such biasness and misuse of performance rating since evaluations are done by multi raters. How 360 degree feedback can be applied? The purpose of the 360 degree feedback is to assist each individual to understand his or her strengths and weaknesses, and to contribute insights into aspects of his or her work needing professional development. Debates of all kinds are raging in the world of organizations about how to use it. Even though it is time consuming and expensive process but it provides multifold benefits. There are no common understandings about its process among experts. The following is a simple process of application of 360 degree feedback: Step one: Selection of the feedback tool and process- In this beginning phase, management decided the tools to be applied to administer survey, questions structure for different performance dimensions, quantity and quality of information s required related to job performance and behaviors and then process to gather all those are determined.

8 30 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 Step two: Selection of the raters- It is important to determine raters for evaluation so in this stage no of raters including peers, superiors, customers and subordinates are selected. Total number of raters and their interrelation with the employee is has to be fixed. The principle of cohesiveness is considered in this regards. Figure 2 Application process of 360 degree feedback Select the feedback tool and process Select the Raters Use the Feedback Review the Feedback Manage and integrate the process Step three: Use of feedback- the raters with use of prescribed form/format provide their individual opinion about that individual. The evaluation of the multi-raters then is collected. All raters judge same individual from different performance and behavioral dimensions. The raters provide feedback based on actual work performance produced and general behavior, attitude and conducts by an employee. Step four: Review of the feedback- After administering confidential survey and collection of information from various raters, the reviews are compiled. The systematic collection, decoding, processing and recording are done thereafter. Step five: Manage and integrate the process into a larger performance management system- 360 degree performance evaluation is supplementary tool of whole performance management system. It assists accurate evaluation and ranking of performances of the employees. The outcomes of it can be applied in performance development programs especially in employee education and training. Since it contributes qualitative data regarding individual behavior hence this system also is very important to understand and shape employee perception, attitudes, personality and behavioral modification. What are the benefits of 360 degree feedback? Many research findings around the globe suggest that 360 degree feedback is more accepted by employees and it has been motivating them to work consistently for the improvement of performance as well as behavior (Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999). It can remove the gap between management and workers in the matter of performance based rewards which is accused being biased and management driven. There are several benefits that organizations can achieve through systematic planning and implementation of this feedback system. Some among these benefits are;

9 Thapa: 360 Degree Feedback 31 Helps to improve customer service and inputs quality of customers Better human resource decision through Encouraging participation of all Pinpoints favoritism and biases of the supervisors. More accepted by employees than of traditional approaches. More impartial and objective Customer satisfaction focused Broadens employee scope for job role, performance and views Serves as supplement to traditional appraisal system Motivates employees especially them who undervalue themselves Encourages teamwork More credible as various people give similar feedback Furnishes strengths and weaknesses of employees Crucial for employee training and development Increment in trust and loyalty What are the basics and pre-requisites of 360 Degree feedback? It is essential that an organization should be willing and prepared for 360 Degree feedback. It is not a single day s task or spontaneous. It becomes successful only when all the stakeholders of organization, especially management and workers should be committed. Whole organization should accept it as an opportunity for performance development scheme. Not only the organization, but also the candidate (the employee) should be prepared for accepting it. Timmreck and Bracken (1997) present research on twenty-seven multi rater feedback processes from a multi-rater consortium that had indicated implementation or planned implementation of multi rater feedback for decision making. This research and others as well, has given an initial list of critical factors necessary for successful multi-rater feedback processes: Support from top management, including a long-term perspective on achieving results Visible participation of top management Validated, relevant competency (behavior, skill) model Rater training Rater accountability to provide honest feedback Rater anonymity and confidentiality Organization-wide implementation (for example, required participation) Easy-to-use feedback and report formats (that is, concise, clear, relevant) Ratee training on how to use results Ratee feedback to raters and involvement of raters in action-planning Ratee accountability for action-planning and follow-through Training of the managers of ratees on appropriate use of multi-rater

10 32 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 feedback Development resources provided by the organization How to make employees ready for 360? 360 degree feedback system is designed to appraise employee performance. The primary part of it belongs to employees thus it is essential assure their active and honest participation. Before launching the feedback system in organizational settings, if employees are not communicated and convinced well it becomes meaningless. The acceptance and committment of employees reduces their resistance to change. Employees are needed to make ready for it. Following are the essentials of analyzing the employee s preparedness for the 360 degree approach- The employee should have an intention to be better The employee should be open to accept the feedback and should respect the views of others The employee should have a competitive feeling The employee should be keen in knowing the viewpoints of others towards him The employee should always learn on the job What are the factors linked to success and failure of 360 degree feedback? 360 degree feedback is neither the Pandora box nor executes spontaneously but it is dependent on dedication, commitment and systematic management. Both management and employees when attempt to provide their honest effort while planning, implementing and reviewing, the 360 feedback provides varieties of benefits. Some of these are; Organizational climate fosters individual growth Criticisms are seen as opportunities for improvement Proper framing of feedback method by management Assurance that feedback will be kept confidential Development of feedback tool based on organizational goals and values Feedback tool includes area for comments Brief workers, evaluators and supervisors about purpose, uses of data and methods of survey prior to distribution of tool Train workers in appropriate methods to give and receive feedback Support feedback with back-up services or customized coaching Support from top management, including a long-term perspective on achieving results. Visible participation of top management. Validated, relevant competency (behavior, skill) model.

11 Thapa: 360 Degree Feedback 33 Rater training. Rater accountability to provide honest feedback. Rater anonymity and confidentiality. Organization-wide implementation (for example, required participation). Easy-to-use feedback and report formats (that is, concise, clear, relevant). Ratee training on how to use results. Ratee feedback to raters and involvement of raters in action-planning. Similarly there are some errors those lead it towards failure. Experiences show those organizations have encountered failure which have rushed into 360-degree feedback without laying the foundation for success. Some of the typical errors responsible for the failure include; Feedback tied to merit pay or promotions Comments traced to individuals causing resentment between workers Feedback not linked to organizational goals or values Use of the feedback tool as a standalone without follow-up Conclusion Poor implementation of 360-degree tool negatively affects motivation Excessive number of surveys are required of each worker with few tangible results provided to individuals The popularity of 360-degree feedback is ever growing. It has been proven as an effective mechanism in performance appraisal of employees as well as their personal development. Organizations worldwide have been adopting it as supportive tool for both the purposes. The technique has reduced conventional debate between workers and management in the matters regarding evaluating their performance and deciding their need for development, compensation and other HR decisions. Workers after application of 360 degree are more convinced about their existing performance and committed to improve their lacking in both of the skills and behavior. Organizations can apply it as strategic tool to enhance employee efficiency and productivity. Since 360 degree system replaces traditional single boss based performance evaluation which used to blame by workers being unfair, now same act is done by multi raters which reduces such tendencies and provides more reliable performance picture of every worker. The careful application of this system needs considering critical success factors. Achievement of more benefit of the feedback depends on active participation, mutual understanding and cooperation between management and workers.

12 34 THE BATUK: Journal of Interdisciplinary Studies Vol. 2 No. 1 January 2016 References Griffin, R.W. (2001). Human Resource Management. Boston: Houghton Mifflin. Alexander, D.M. (1997). How do 360 degree performance reviews affect employee attitudes, effectiveness and performance?. University of Rhode Island De Nisi. Bracken, D.W., Dalton, M.A., Jako, R.A., McCauley, C.D., & Pollman, V.A. (1997). Should 360-degree feedback be used only for developmental purposes?. Greensboro, NC: Center for Creative Leadership. Bracken, D.W., Timmereck, C.W., & Church, A.H. (2001a). The handbook of ultisource feedback. San Francisco: Jossey-Bass. Bracken, D.W., Timmreck, C.W., Fleenor, J.W., & Summers, L. (2001b). 360 degree feedback from another angle. Human Resource Management, 40 (1), Edwards, M.R., Ewen, A.J.(1996). Automating 360 degree feedback. HR Focus, 73, 3-4.No 9 Edwards, M.R., & Ewen, A. J. (1996). 360 Feedback: The powerful new model for Employee Assessment & performance improvement. New York: AMACOM American Management Association. Eichinger, R. (2004). Patterns of Rater Accuracy in 360-degree Feedback. Perspectives, 27, Fleenor, J. W., & Prince, J. M. (1997). Using 360-degree feedback in organizations: An annotated bibliography. Greensboro, NC: Center for Creative Leadership. Greguras, G.J., & Robie, C. (1998). A new look at within-source inter rater reliability of 360-degree feedback ratings. Journal of Applied Psychology, 83, Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree feedback on management skills development. Human Resource Management, 32(2 3), Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degree feedback on management skills development. Human Resource Management, 32(2 3), Heathfield, S. (2001, April). 360 degree feedback: the good, the bad and the ugly defines and examines multirater feedback. library/weekly/aa042501b.htm Kaiser, R.B., & Kaplan, R.E. (2006). Are all scales created equal? Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, May, Dallas, TX.

13 Thapa: 360 Degree Feedback 35 Kaplan, R. E., & Palus, C. J. (1994). Enhancing 360-Degree Feedback for Senior Executives. Greensboro, North Carolina: Center for Creative Leadership. Luthans F., Peterson S. (2003) Degree feedback with systematic coaching: Empirical Analysis suggests a winning combination. Human Resource Management. Vol 42, Iss 3;pg 243 Maylett, T. M., & Riboldi, J. (2007). Using 360 Feedback to Predict Performance. Training + Development, September, Maylett, Tracy (2005). The Relationship of Multi-rater Feedback To Traditional Performance Appraisal. Doctoral Dissertation, Pepperdine University, Los Angeles, California. Maylett, Tracy (2009). 360-Degree Feedback Revisited: The transition from development to appraisal. Compensation and Benefits Review, September/ October 41(5), Pollman V. A., (1997). Some faulty assumptions that support u sing multirater feedback for performance appraisal. Center for Creative Leadership. Greensboro, North Carolina. Seifert, C., Yukl, G., & McDonald, R. (2003). Effects of multisource feedback and a feedback facilitator on the influence of behavior of managers toward subordinates. Journal of Applied Psychology, 88(3), Smither, J.W., London, M., and Reilly, R.R. (2005). Does performance improve following multisource feedback? A theoretical model, meta-analysis and review of empirical findings. Personnel Psychology, 58, Timmreck, C. W., & Bracken, D. W. (1997, Spring). Multisource feedback: A study of its use in decision making. Employment Relations Today. pp Tornow, W., London, M. (1998). Maximizing the value of 360-degree feedback. San Francisco: Jossey-Bass Inc. Vinson, M. (1996, April). The pros and cons of 360-degree feedback: Making it work. Training and Development, April, Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone amok? The Academy of Management Executive, 12(2), Waldman, A. D., Atwater, L. E., & Antonioni, D. (1998). Has 360-degree feedback gone amok? The Academy of Management Executive, 12(2), Walker, A., & Smither, J.W. (1999). A five-year study of upward feedback: What managers do with their results matters. Personnel Psychology, 52(2),