Research Insight

One study involved 92 managers who were rated by one or more subordinates in each of four administrations of an upward feedback survey over two years. The subordinates rated themselves and their managers on 33 behavioral statements. The feedback managers received included a review of results from pervious administrations of the survey, so they could track their performance over time.

The results were impressive. According to the researchers, managers whose initial level of performance (defined as the average rating from subordinates) was low improved between administrations one and two, and sustained this improved two years later. The results suggest it’s not necessarily the specific feedback that caused the performance improvement (since low performing managers seemed to improve over time even if they didn’t receive any feedback). Instead, learning what the critical supervisory behaviors were (as result of themselves filling out the appraisal surveys), plus knowing their subordinates would be appraising them, may have been enough to prompt the improved behavior.

360-Degree Feedback

Many firms have expanded the idea of upward and peer feedback into 360-degree feedback. Here ratings are collected all round an employee, from supervisors, subordinates, peers, and internal or external customers. Employers generally use the feedback for development rather than for pay increases.

Most 360-degree feedback systems contain several coon features. Appropriate parties – peers, supervisors, subordinate and customers, for instance – complete surveys on an individual. The surveys often include items such as returns phone calls promptly, listens well or [my manager] keeps me informed. Computerized and web based systems then compile this feedback into individualized reports, just for the ratees. They then meet with their own supervisors and sometimes with their subordinates and share the information they feel is pertinent for self improvement.

Some doubt the practicality of 360-degree feedback. Employees usually do these reviews anonymously so those with an ax to grind can misuse them. A Dilbert cartoon announcing that evaluations by co-workers will help decide raises, has one character asking. If my co-workers got small raises, won’t there be more available in the budget for me?

Thus, 360-degree appraisal is the subject of considerable debate. One study found significant correlation between (1) 360 degree ratings (by peers and managers) and (2) conventional performance ratings. Another study concluded that multi source feedback leads to generally small performance improvements on subsequent ratings. However anchoring 360 degree appraisals with behavior competencies improves the ratings reliability; in one study the competency based 360 degree assessments were strongly predictive of how the managers performed in a subsequent assessment center. The consulting firm Watson Wyatt found that companies using 360 degree type feedback have lower market value (in terms of stock price) perhaps due to the methods complications.

All in all, the findings suggest that firms should carefully assess the potential costs of the program, focus any feedback very clearly on concrete gal, carefully train the people that are giving and receiving the feedback , and not rely solely on 360 degree feedback. And, the company should make sure that the feedback is productive, unbiased and development oriented.

The use of 360 degree appraisals sees mot be diminishing. Some firms, like GE, backed of from using it. Some found the paperwork overwhelming; others found that some employees colluded with peers to give each other high ratings. But others still argue that progressive executives welcome 360 degree feedback, since by laying themselves open to praise and criticism from all directions and inviting others to do the same, they guide their organizations to new capacities for continuous improvement.