360-degree Feedback: A summary evaluation

360-degree Feedback: A summary evaluation William J Fear Copyright William James Fear 2014. The author asserts their rights over this text according to copyright law. All rights reserved by the Author. Three-sixty-degree appraisal was originally proposed as a tool for employee development, or for overcoming feedback problems in organisations, depending on who you read. There is a widely shared concern about using it either for decision making or for performance appraisal (but see Antonioni, 1996, for an advocative argument). An underlying assumption, which is unjustified and not wholly supported in the literature, is that any feedback is good feedback and the provision of feedback will lead to an increase in performance. This highlights the logic of developing a tool to overcome feedback blocks in organisations. 360-degree appraisal is a process whereby feedback is provided to the focal person (the ratee), usually a manager, from: above superiors; below subordinates; and peers. It has been argued that customers must also be included to provide true 360-degree feedback. This feedback process is also known as (see Garavan, Morely and Flynn, 1997): Multi-rater feedback; Upward appraisal; Co-worker feedback; Multi-perspective ratings; 1

Full circle feedback; and old wine in new bottles, as one might expect. (It can be realistically traced back at least as far as the 1930s. Also, 360- degree feedback has been queried as a viable and, by comparison, cheap alternative to assessment centres.). In sum, 360-degree feedback is a process of providing feedback from multiple sources. The focal person then uses the feedback to improve performance. It is a developmental process and not a method of performance appraisal. Clearly, this process is relatively simple. In terms of the mechanics, 360-feedback usually relies on ratings, and the raters are most often selected by the ratee. The assumptions in relation to 360-degree feedback are that because multiple raters are used, and because they are anonymous, any distorting variance will come out in the wash. The evidence, such as it is, does not support this assumption (see Mount, Judge, Scullen, Sytsma, and Hezlett, 1998; Harris and Schaubroeck, 1988; and Brutus, Fleener, and London, 1998, for factor analyses, meta-analysis, and inter-industry comparisons respectively). Instead we find that demographics, personality, rater cognitive variables, interpersonal affect, and type of organisation all interact with ratings. We find effects of favourability, or leniency bias, and this also interacts with type of organisation (or profession). The power gradient affects ratings, as does likeability, with raters actively seeking out evidence to support their ratings. (See, for overview, Antonio and Park, 2001.) These difficulties are not insurmountable and the reported evidence does appear to suggest that, if used appropriately, 360-degree feedback can bring about intended improvements in performance (but see below). In relation to this, Moses, Hollenbeck and Sorcher (1993) suggested using other peoples expectations (OPE) instead of ratings 2

based on other peoples observations (OPO), arguing that this would allow the ratee to at least know what was expected of them. The key to 360-feedback is the assumption that if managers care about feedback and it cannot be denied, ignored, or rationalised away then they will use that feedback to diagnose weaknesses and change their behaviour to meet external standards. (see Beach, 1990; London, 1995; Carver and Scheier, 1982; Kluger and DeNisi, 1996.) This is the comparison of self and others ratings (see Yammarino and Atwater, 1997, for a comprehensive discussion). Put another way, this is the assumption that an awareness of the discrepancy between self and others ratings enhances self awareness, and enhanced self awareness leads to maximum performance as a manager (see Tornow, 1993; and McCarthy and Garavan, 1999). In relation to this we know that those with most inflated self ratings have the most to learn, but that accurate self assessors are most likely to improve performance in response to discrepant ratings (Hazucha, Hezlett, and Schneider, 1993; Nilson and Campbell, 1993). We also have to consider the impact of ratings discrepancies on the focal person. Receiving feedback of this nature can be understandably traumatic, especially if the focal person has low self esteem (see DeNisi and Kluger, 2000, in relation to this). While this is not a weakness of the 360-degree feedback process per se, it is an important consideration that needs to be managed sensitively. It is a widely held belief that feedback, any feedback, has a positive effect on performance. This is not the case. In a historical review and meta-analysis Kluger and DeNisi (1996) found a modest (less than half a standard deviation) but positive effect of feedback overall in terms of rated performance (see also Kluger and DeNisi 1998 for further discussion and consideration). However, they also report that 38 percent of the time feedback resulted in a decrease in subsequent performance. Importantly, this was a negative effect of feedback and not an effect of negative feedback. We need to be clear, negative feedback leads to improved performance as it highlights the 3

discrepancy between actual and intended performance. Positive feedback, in the context of this discussion, does not necessarily lead to improved performance. Feedback interacts in complex ways with goal hierarchies that can be broken into three levels: task, learning (motivation), and self concept (DeNisi and Kluger, 2000; see also Yammarino and Atwater). While we don t have space to explore these interactions here, the crucial aspect of this is that the effectiveness of a feedback intervention depends on the level at which the intervention focuses attention. To clarify, feedback should highlight the discrepancy between actual and intended performance on the task. Powerful interactions can occur when the feedback in interpreted in relation to the other than the intended level. For example, if feedback on task performance is linked to self-concept, and the focal person suffers from low self-esteem, even if only in the context in question, then performance is likely to suffer, as is self-concept. There seems little doubt that if the feedback is managed properly, and support provided to ensure that it is part of the developmental process, it will probably lead to improved performance; problems of measuring improvements in performance aside. In addition, there seems to be evidence for an additive effect with feedback that shows an improvement in performance leading to further improvements in performance (see DeNisi and Kluger; and Yammarino and Atwater). Admittedly, this latest statement contradicts the earlier point that negative feedback leads to improved performance; as long as the feedback hits the right level, is interpreted at the right level, is supported, and allows for development. Another finding that might seem counterintuitive is that feedback by computer is better than live feedback from another person. In terms of feedback, then, the evidence suggests that the 360- degree process is a powerful tool if used correctly. There are strong indications that it can lead to improvements in performance, and we should note that it seems to be received enthusiastically when used 4

correctly (see Walker and Smither, 1999, for a long term study). There are, equally, problems, or weaknesses, with 360-degree feedback. As with any powerful tool 360-feedback is difficult to use to its best advantage, and if not used correctly can be detrimental. This consideration should conclude thus: any feedback is not better than no feedback. We ve given consideration to 360-degree feedback as feedback, but what about its use as an appraisal tool? Certainly, 360-degree feedback is used in performance appraisal. Interestingly, the research seems to be far less conclusive in this regard. The problems of using 360-degree as an appraisal tool are the same as those for feedback. Notably, when 360-degree feedback is used in performance appraisal situational factors affect accuracy of ratings with lower ratings for performance then when used for development (Farh and Werbel, 1986; London and Beatty, 1993). There is also the concern that with upward feedback supervisors may manipulate subordinates to achieve desired ratings and, conversely, that subordinates may lack the necessary ability and/or knowledge to make valid ratings. As noted earlier, there does seem to be a strong consensus in the literature that 360-degree feedback was developed as a development tool and should be used as a development tool. This does not preclude its use as a performance appraisal tool, but it needs to remain linked to development. To finish off we will consider, briefly, the uses, benefits and problems of 360-degree feedback. The uses of 360-feedback are clear. For organisations they include: Development of individuals; Providing feedback, and input into performance appraisal; Succession planning; Facilitating change; and Reinforcing core values and strategies and related matters. 5

For individuals they include: Feedback; Increased understanding of own ability and the chance to address weaknesses; and Improved performance. Of course, we need to bear in mind the foregoing considerations. Namely, that improved performance and understanding and so on do not necessarily follow from 360-degree feedback. Rather, they can. The benefits for organisations are: Improved communication, especially 2-way communication; Engagement with employees; and Improvements to working relationships. And for individuals: Feedback is received from multiple sources, and is seen as reliable and fair; Improvements in performance; Increased motivation and enhanced purpose and career direction; Exposes and resolves conflict; and It provides the opportunity to praise or criticise anonymously. We can see from this that the uses and benefits to both organisations and individuals are very similar and relate very much to feedback, communication, and improvements in performance. At this point we can also state with some confidence that the biggest notable strength of 360-degree feedback is its contribution to improving and 6

developing interpersonal communication within the organisation. Its key weakness is the difficulty of appropriate use of a powerful tool. That having been said, the problems noted in the literature tend to focus on the use of ratings, even if indirectly. The problems of 360- degree feedback are summarised by the following: There is no shared frame of reference for raters and generalised traits are used; It is based on memory and perception; Data interpretation is reliant on the instrument designers method that is, there is no standardised and consistent method universally applied; It can be threatening and put increased pressure on managers; There are measurement problems and the value of the results may be limited; Feedback can be traumatic; It can be time consuming, expensive, and lead to survey fatigue; and Subordinates may not be able to provide valid ratings and ratees may chase the best ratings. To conclude, we have evaluated 360-degree feedback without directly contrasting its strengths and weaknesses and this is in accordance with the existing literature and better suited to pick up the nuances of the process. We considered the nature of the process, the problems with ratings, the nature of feedback and the uses, benefits, and problems with the process. So, is 360-degree feedback good, bad, or indifferent? Overall, there is wide support for the process in the literature, provided it is applied properly and appropriately and the opportunity for development is facilitated. Does it work? That depends. There is an assumption, which is not supported with any weight, that 360-degree feedback facilitates important interindividual communication within 7

organisations. Whether or not it leads to improved performance is unclear. It probably does, but the difference it makes is small. However, this may be a consequence of [inappropriate] instrument design and application and improvements in these areas could lead to bigger effects. We don t know. We do know that it can be misused and can have adverse consequences. Overall the balance seems to tip in favour of the process being good. If we want to consider that in terms of strengths and weaknesses then we could say that the strengths outweigh the weaknesses. References Antonioni, D. (1996). Designing an Effective 360-degree appraisal feedback process. Organizational Dynamics, 24-38. Antonioni, D, and Park, H. (2001). The relationship between rater affect and three sources of 360-degree feedback ratings. Journal of Management, 27, 479-495. Beach, L. R. (1990) Image theory: Decision making in Personal and Organisational contexts, John Wiley and Sons, New York, NY. Brutus, S., Fleenor, J. WJ., and London M. (1998). Does 360-degree feedback work in different industries? Journal of Management Development, 17, 3, 177-190. Brutus, S., London, M., and Matineau, J. (1999). The impact of 360- degree feedback on planning for career development. Journal of Management Development, 18, 8, 676-693. 8

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