360 performance appraisal

360 DEGREE PERFORMANCE APPRAISL

360 DEGREE PERFORMANCE APPRAISL

PERFORMANCE APPRAISAL INTRODUCTION People differ in their abilities and their aptitudes. There is always some difference between the quality and quantity of the same work on the same job being done by two different people. Therefore, performance management and performance appraisal is necessary to understand each employee‘s abilities, competencies and relative merit and worth for the organization. Performance appraisal rates the employees in terms of their performance.

Performance appraisals are widely used in the society. The history of performance appraisal can be dated back to the 20th century and then to the second world war when the merit rating was used for the first time. An employer evaluating their employees is a very old concept. Performance appraisals are an indispensable part of performance measurement. Performance appraisal is necessary to measure the performance of the employees and the organization to check the progress towards the desired goals and aims.

The latest mantra being followed by organizations across the world being – ―get paid according to what you contribute‖ – the focus of the organizations is turning to performance management and specifically to individual performance. Performance appraisal helps to rate the performance of the employees and evaluate their contribution towards the organizational goals. If the process of performance appraisals is formal and properly structured, it helps the employees to clearly understand their roles and responsibilities and give direction to the individual‘s performance. It helps to align the individual performances with the organizational goals and also review their performance.

Performance appraisal takes into account the past performance of the employees and focuses on the improvement of the future performance of the employees.

360 DEGREE PERFORMANCE APPRAISL

FEATURES OF PERFORMANCE APPRAISAL

1) Setting SMART Goals for Employees: Goal setting provides leaders, managers and employees with web-based tools to set SMART goals and track progress on frequent intervals.

2) Evaluate Employee Performance: Employee Appraisal ensures objective and accurate evaluation of your employee‘s performance and helps you find the strengths and weakness of the employee.

3)Coach and Train Employees to improve their performance: To continually improve performance of your organization you need to continuously training employees to update their skills and competencies.

Training Management allows you manage employee training effectively.

4) Define competitive employee compensation plans: Employee compensation plan helps you to remain competitive in your business and attract and retain talented employee.

5)Promote right employees to critical positions: Organizations success by placing right employee in right positions.

360 DEGREE PERFORMANCE APPRAISL

OBJECTIVE OF PERFORMANCE APPRAISAL Objectives of Performance appraisal: To review the performance of the employees over a given period of time.

To judge the gap between the actual and the desired performance.

To help the management in exercising organizational control.

Helps to strengthen the relationship and communication between superior – subordinates and management – employees.

To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future.

To provide feedback to the employees regarding their past performance.

Provide information to assist in the other personal decisions in the organization.

Provide clarity of the expectations and responsibilities of the functions to be performed by the employees.

To judge the effectiveness of the other human resource functions of the organization such as recruitment, selection, training and development.

To reduce the grievances of the employees.

T.Y.B.M.S

Page 4

360 DEGREE PERFORMANCE APPRAISL

PERFORMANCE APPRAISAL SYSTEMS Issues like promotions, demotions, bonuses and pay will affect the success or failure of a 360 degree performance appraisal. Keep in mind that performance appraisal systems are used to define employee goals, employee contributions and determine the employee‘s results in meeting those goals and contributions. It is a genuine review of past employee performance.

T.Y.B.M.S

Page 5

360 DEGREE PERFORMANCE APPRAISL

PERFORMANCE APPRAISAL - PUNISHMENT TOOL OR ORGANIZATIONAL CATALYST Performance Appraisal is one of the core HR activities. It is the assessment of the employee‘s job performance. It is completely based on employee‘s job description and objectives to be achieved.

Performance Appraisal (PA) has 2 basic purposes. First, PA serves an administrative purpose. It provides information for making salary, promotion and layoff decisions as well as providing documentation for justifying these decisions. Second, rather more importantly, performance appraisal serves a developmental purpose. This information can be utilized for determining training needs, career planning and succession planning.

Employees have mixed views about performance appraisals.

According to one segment, it is for the betterment of the employees and the organization. Those employees, who work efficiently and effectively, will get the agreed intrinsic as well as extrinsic benefits. It is being regarded as an excellent method of keeping everyone motivated. The better you perform, the more you get.

On the contrary, some employees suggest to their managers that companies should get rid of performance appraisals as it is a bitter process which has the ability to create emotional pressures and stress for the employees.

T.Y.B.M.S

Page 6

360 DEGREE PERFORMANCE APPRAISL

A manager‘s bias also plays its role. Furthermore, he might lack proper training for evaluating employees‘ performances. Their perception is that ―no matter how well we perform, our contributions will never be acknowledged.‖

Annual performance The annual performance appraisal might be the most important meeting you have with your employees all year. Appraisals offer an opportunity to clarify job descriptions, set goals and objectives, formulate sensible compensation decisions, and decisively address any performance challenges.

Properly handled, performance appraisals can correct personnel issues and set employees on a positive course for the coming months. Handled poorly, they have the potential to demoralize employees, provoke EEO complaints, and erode trust in management.

This session is a must for managers and human resource professionals who are frustrated with the typical ineffectiveness of performance management discussions in advancing organizational goals and promoting positive employee relations.

T.Y.B.M.S

Page 7

360 DEGREE PERFORMANCE APPRAISL

360 DEGREE PERFORMANCE APPRAISAL INTRODUCTION Unlike, the traditional top-down appraisal where a supervisor appraises the performance of their subordinate, 360 Performance Appraisal incorporates multiple perspectives by using feedback from a variety of sources.

360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal where the feedback about the employees‘ performance comes from all the sources that come in contact with the employee on his job.

360 degree respondents for an employee can be his/her peers, managers (i.e. superior), subordinates, team members, customers, suppliers/ vendors - anyone who comes into contact with the employee and can provide valuable insights and information or feedback regarding the ―on-the-job‖ performance of the employee.

360 degree appraisal has four integral components: 1. Self appraisal 2. Superiors appraisal 3. Subordinate‘s appraisal 4. Peer appraisal.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his achievements, and judge his own performance.

Superior‘s appraisal forms the traditional part of the 360 degree appraisal where the employees‘ responsibilities and actual performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like communication and motivating abilities, superior‘s ability to delegate the work, leadership qualities etc. Also known as internal customers, the correct feedback given by peers can help to find employees‘ abilities to work in a team, co-operation and sensitivity towards others.

T.Y.B.M.S

Page 8

360 DEGREE PERFORMANCE APPRAISL

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree Performance appraisal have high employee involvement and also have the strongest impact on behavior and performance. It provides a "360-degree review" of the employees‘ performance and is considered to be one of the most credible performance appraisal methods.

The aim is to find the gap between one‘s own appraisal and the perceptions of others. This will in turn enable a professional to analyze his strengths and shortcomings and accordingly improve his performance. While it is true that the system serves as an excellent process since it reduces biases, it is not always successful. It is necessary to create the right culture in the company before introducing the system. If many people are unhappy or their morale is low, the situation can turn disastrous as some staffers will become obvious targets.

360 degree appraisal is also a powerful developmental tool because when conducted at regular intervals (say yearly) it helps to keep a track of the changes others‘ perceptions about the employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to assess their leadership and managing styles. This technique is being effectively used across the globe for performance appraisals.

T.Y.B.M.S

Page 9

360 DEGREE PERFORMANCE APPRAISL

Some of the Organizations using 360 Degree Performance Appraisal are: Wipro, Infosys, Reliance Industries Maruti Udyog etc.

HCLTechnologies.

Wyeth Consumer Health (WCH)

WHAT IS 360 DEGREE PERFORMANCE APPRAISAL? 360 Degree performance Appraisal is the most comprehensive appraisal where the feedback about the employee‘s performance comes from all the sources that come in contact with the employee on his job. For e.g.: peers, colleagues‘, supervisors, subordinates, and clients etc, including the employee himself. Such appraisal can provide valuable information regarding the ―on-thejob‖ performance of the employee.

The employees receiving feedback gets rated by 360 raters. It involves appraisal by those above, below, and to the side of an individual employee, as well as self assessment in practice. The half yearly or yearly report of work schedule goes from company to their headquarter of all the workers where their performance is appraised. It contains all demotion, promotion, and other activities related to the performance.

T.Y.B.M.S

Page 10

360 DEGREE PERFORMANCE APPRAISL

360 DEGREE FEEDBACK

INTRODUCTION 360 feedbacks is simply a process for employees, management and customers to receive… advice reactions comments opinions responses criticisms views pointers …from each other about the efficiency of their professional development. Thus the term 360 degree feedback, meaning a circle of those co-workers, managers and customers around you.

T.Y.B.M.S

Page 11

360 DEGREE PERFORMANCE APPRAISL It is common for employees to be appraised by just one person, a manager or boss. What if this appraisal process can be improved by gaining feedback from people that work around the employee as well? This would give a fairer and more accurate view of an employee.

360-degree feedback occurs when feedback is obtained from sources all around an employee.

These sources may include: management; co-workers; clients; self assessment.

The system can include feedback from all of these groups, and from multiple people from each of the groups. If you do not want to include all the groups in the appraisal process, our system will automatically adjust for this. A common example might be that employee (a) will be appraised by two managers, six coworkers, zero clients and will perform a self assessment.

WHAT IS 360-DEGREE FEEDBACK?

It is a process whereby an individual is rated on their performance by people who know something about their work. This can include direct reports, peers, managers, customers or clients; in fact anybody who is credible to the individual and is familiar with their work can be included in the feedback process. The individual usually completes a self-assessment exercise on their performance, which is also used in the process.

T.Y.B.M.S

Page 12

360 DEGREE PERFORMANCE APPRAISL

360-DEGREE FEEDBACK DEFINITION -ACCORDING TO: TERRI LINMAN ―360-degree feedback is an evaluation method that incorporates feedback from the worker, his/her peers, superiors, subordinates, and customers. 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. With 360-degree feedback, the worker is central to the evaluation process and the ultimate goal is to improve individual performance within the organization. Under ideal circumstances, 360-degree feedback is used as an assessment for personal development rather than evaluation‖.

T.Y.B.M.S

Page 13

360 DEGREE PERFORMANCE APPRAISL

360 DEGREE FEEDBACK SYSTEM A 360 degree feedback system is designed to develop and discover and employee‘s level of skill, how capable and knowledgeable employee is and look for ways to improve how employee does their job.

A performance evaluation appraisal and a 360 degree feedback have different functions. Research shows that 360 feedbacks when used incorrectly cause poor performance. It breeds employee mistrust and as stated before, increases the organizations risk of legal hot water.

Employee compensation decisions have historically been associated with performance appraisals. In my organization (Local Government) there is a culture of skepticism of management at best.

360 degree appraisals involve evaluating supervisors and managers as well employees. This could be a positive for anyone who works for a local government. However, because of the secrecy involved in who does the rating‌secrecy, government.

When 360 reviews are merged with compensation decisions (360 degree performance appraisal), employees will begin to doubt the advantages of 360 degree feedback. When workers perceive that people around them are deciding their financial rewards and promotional opportunities, mistrust may set in.

Some employee and manager raters may have trouble separating personal bias and dislikes from an honest assessment of a coworker. Multiple source raters are not very good at giving unbiased feedback. For performance appraisal purposes, co-workers are bad at figuring out 360 feedbacks that influences promotions and the size of the paychecks.

T.Y.B.M.S

Page 14

360 DEGREE PERFORMANCE APPRAISL

SOME DIFFERENCES BETWEEN A 360 DEGREE FEEDBACK AND A PERFORMANCE APPRAISAL An effective performance appraisal is basically done between the employee and however she reports to. The employee does not come to a performance appraisal to find out how much she met co-worker, subordinate or customer expectations.

When the manager calls her into the office for a performance appraisal meeting the focus is on the actual performance of her job between the last review and the current one. There are different expectations in a 360 degree feedback. 360 degree evaluations involve how those around you perceive your level of‌ skill practice (the way you apply yourself to the task) competency(know-how) behavior (actions or deeds) Each of these areas is then measured to determine where improvement is needed. Thus a 360 degree evaluation is used for ongoing personal and professional development. A traditional staff performance appraisal highlights a set of tasks performed satisfactorily in a specific period of time.

There are other differences between a performance appraisal and 360 degree feedback.

Typical performance appraisal methods involve the following‌ pay increases or decreases merit raises promotions demotions separations or transfers guidelines to calculate effective progress in training and decisions

T.Y.B.M.S

Page 15

360 DEGREE PERFORMANCE APPRAISL A 360 degree feedback system by design should not deal with employee compensation.

Compensation decisions are one of the areas of controversy involving the merger of 360 degree feedback and performance appraisal in evaluating job reviews.

The need for growth in team and personal levels of performance have been the driving force toward blending appraisal of performance and a 360 degree feedback system.

A standard procedure of 360 appraisal involves providing a survey for employees to rate each other and managers. These surveys are typically of a confidential nature. This gives employees the confidence to give comments without fear of retaliation. However there is research that points to dangers in 360 degree evaluations.

These 360 degree feedback surveys have managers and employees who are selected as raters. What does rater mean? They are fellow employees or managers who are selected to evaluate us. This is viewed as a more fair process because the appraisals of employee performance are conducted by multiple sources versus one manager who may be biased.

Research shows mixing 360 degree feedback and job performance appraisals can expose a company to more employee lawsuits. This is because those rating an employee must be careful not to violate the Civil Rights Act or Equal Employment Opportunity Commission (EEOC) guidelines. The info gathered from all raters is then given to the employee by someone designated by management.

T.Y.B.M.S

Page 16

360 DEGREE PERFORMANCE APPRAISL

NEED OF 360-DEGREE FEEDBACK IN ORGANIZATIONS Business is towards surplus generation. Without surplus no organization can grow. Here the effort to grow the business and the surplus should come from employee part. The performance of the employees is at work here matters in business development and organizational development. The performance of the employees should then align with the strategic decisions that integrate the business goals in an increasingly competitive environment. It is the responsibility of the Human Resource Management to integrate the culture of the organization with all available resources to the optimum out put. The 360 0 Appraisal helps the HR Department to have better understanding of the competitive advantage and disadvantages of the current manpower resources and tune them towards performance excellence and productivity.

PREREQUISITES * Top Management Support * Confidence of employees on the appraisal methodology * Objectives need to be measurable with performance requirements clearly stated. * A detailed plan of implementation * Collaboration between superior and subordinates * some prior experimentation and positive experiences Clear organizational philosophy and policy objectives USES FOR 360 DEGREE FEEDBACK INCLUDE: Performance Appraisal o Recognition of performance. o Providing feedback on individual performance. o Providing a basis for self-evaluation.

Assessing Employee Development: o Diagnosing training and career development needs. o Providing a basis for promotion, dismissal, job enrichment, job enlargement, job transfer, probation, etc. o Monetary and other rewards.

T.Y.B.M.S

Page 17

360 DEGREE PERFORMANCE APPRAISL

Organizational Climate Study: o Organizational environment improvement needs o Changes in the Managerial approaches, leadership, etc Customer Satisfaction Study o Employees attitudinal change o Customer satisfaction improvements

T.Y.B.M.S

Page 18

360 DEGREE PERFORMANCE APPRAISL

HOW IT IS CONDUCTED. (1.) Develop questionnaire: A questionnaire used for 360 Performance Appraisal typically contains items that are rated on a 5 point scale. These items may be developed to measure different dimensions of job performance (e.g., communication, teamwork, leadership, initiative, judgment). Questionnaires also typically include one or more open-ended questions to solicit written feedback.

Questionnaires typically include from 50 to 100 items. When estimating the amount of time to complete the questionnaire they should estimate about 1 minute per questionnaire item.

If using a printed questionnaire form, they should consider using forms that can be scanned into a computer.

(2.) Ensure confidentiality of participants Steps must be taken to ensure the confidentiality of the feedback results. For example, feedback ratings from several subordinates may be combined (averaged) to mask the identity of an individual subordinate. The confidentiality helps ensure that the results are genuine.

(3.) Provide training/orientation often the feedback process involves use of one or more questionnaires, confidential information, and involvement from many different areas of an organization. Therefore, training and orientation to the feedback process is needed to facilitate a smooth feedback process. During this training/orientation, employees should be informed of what 360 Performance Appraisal is and why it is being implemented at the organization. They may want to provide samples of the questionnaire items and/or feedback results.

(4.) Administer the feedback questionnaire Distribute questionnaire forms (if using printed copies) with instructions. May want to prepare answers to common questions if other employees will be assisting in the administration. If possible, post the questions and answers to their web site for easy access.

It is important to monitor the progress through the system in order to contact employees who need to complete forms.

(5.) Analyze the data Basic data analysis would include averages of ratings.

More complicated analyses may include item-analysis and/or factor-analysis.

Types of analyses include: Performance Dimension Summary; SummaryT.Y.B.M.S

Page 19

360 DEGREE PERFORMANCE APPRAISL Performance vs. Expected; Individual Item Ratings; Item Ratings-Performance vs. Expected (formed); Highest- or Lowest-Rated Items (shows individual's strengths and weaknesses); Group & Organizational Ranking, and Recommendations for Development.

They may want to analyze the data by organizational division or department to assess group and organizational strengths and weaknesses. This can be used to support or promote training and organizational development.

(6.) Develop and Distribute Results Feedback results should be shared with the employee. It should not be mandatory that the employee share the results with their supervisor. However, they may want to make this an optional part of the performance review of the employee.

Most results for an employee will include a comparison of their ratings to the ratings of their supervisor and average of the ratings from others (peers, customers...). The comparisons may be in the form of numbers or simple bar charts.

They may want to provide individual review sessions or group workshops conducted by a facilitator to help individuals review and understand the results and develop appropriate goals and objectives.

Dimensions Responses are collected for items that fall under a specific dimension of job performance. A single questionnaire may contain dozens of questions that measure responses on one or more dimensions.

Example of dimensions are shown below. • Problem Solving Items under this dimension measure how well a person can understand information and options, give appropriate considerations to information, make correct decisions, analyze and interpret information, and react to changing situations. • Planning and Organizing Items under this dimension measure a person's ability to develop plans and objectives, develop long-term solutions, set business objectives adhere to schedules.

T.Y.B.M.S

Page 20

360 DEGREE PERFORMANCE APPRAISL

• Communication Items under this dimension measure the ability to present information formally and informally in both written and orally. Also measures the ability to communicate with customers, staff, peers and supervisors.

• Supervisory Skills Measures the individual's skill level in planning, organizing and overseeing the work of subordinates. Also measures a person's ability to manage work flow efficiently.

• Administrative Skills Measures an individual's ability to implement and monitor actions to ensure compliance with policies and regulations. Also helps identify the ability to distribute information, allocate staff and maintain records or documents.

• Business Control Measure the skill in, and concern for, controlling expenses, reducing costs, setting performance standards and reviewing budgets.

• Manager Potential Index A measure of the composite score of the scales reflecting an individual\'s overall ability to successfully perform management tasks.

T.Y.B.M.S

Page 21

360 DEGREE PERFORMANCE APPRAISL

HOW 360-DEGREE FEEDBACK SYSTEM ADDS VALUE? 360 degree feedback enables an organization to focus on developmental efforts, at the individual and group level, in the present business environment where the success of the company depends on continuous revolution, which is possible through organizational development. 360-degree feedback facilitates the alignment of individual capabilities and behaviors with organizational strategies. It adds value to the organization indifferent ways:o o o o o o o o o o o o o

T.Y.B.M.S

360-degree feedback provides a better understanding of individuals performance at work 360-degree feedback provides a multifaceted view about the employees from different sources 360-degree feedback provides a better understanding of employed developmental needs 360-degree feedback provides increased the understanding about one's role expectations.

360-degree feedback provides increased the understanding of competence and competency in various roles 360-degree feedback extends better morale to those who perform and contribute well to the organization 360-degree feedback reduces training costs by identifying common development needs.

360-degree feedback increases the team's ability to contribute to the organizations goals 360-degree feedback helps everyone to work for a common standard and institutionalize performance management.

360-degree feedback ensure better interpersonal relationship and group cohesiveness It promotes self-directed learning and provides a road map for employee's development planning.

It promotes better Communication within departments.

360-degree feedback Increases the team's ability to contribute to the organizations goals develop better bottom line through boosting the capability of the organization to meet its objectives.

Page 22

360 DEGREE PERFORMANCE APPRAISL

360 DEGREE FEEDBACK BENEFITS Employees should be aware of what 360 degree feedback benefits could mean for them. The benefits centre on improving managerial performance which has been demonstrated to have a substantial impact on productivity and profitability. Evaluations typically achieve 90% agreement rates that the results are useful.

The benefits apply at several levels: Self-insight and learning. 360-degree feedback provides the opportunity to see ourselves as others see us. This is the first step to help identify strengths in one's management style that can be built on and areas of weakness that can be redressed.

Focuses career development Discussions around feedback, strengths and development areas are also useful for sharpening ideas about the future and potential career directions.

Hard data. 360-feedback data provides quantifiable data on a range of leadership and personal capabilities, enabling comparisons to be made, both within and between managers.

Motivational. A programme of 360-degree feedback can have a positive motivational effect on managers. The managers feel they are being listened to as individuals and that they are receiving support in their development and dealing with problems. Team members can similarly experience positive motivation if they too feel they are being listened to, and positive changes that affect their working lives follow.

Culture change Introducing feedback can subtly change the culture. An atmosphere of open and honest feedback means decision making can be more rigorous. Unsatisfactory behaviour can be identified and addressed rather than swept under the carpet.

Competency approach. The use of competencies to define the managerial behaviours valued in an organization helps integrate recruitment, leadership development and performance appraisal into a coherent framework.

Broader perspective. Performance management becomes more rounded, taking a broader set of perspectives than just the manager.

T.Y.B.M.S

Page 23

360 DEGREE PERFORMANCE APPRAISL

THE 360 DEGREE PROCESS (1.) Self-assessment

Self-assessment encourages the individual to take responsibility for his or her own development and is a useful starting point in the 360-degree feedback process. Consideration needs to be given to the purpose of this information and how it is used as well as who has access to this data and how long is it held for.

(2.) The raters Identifying the most appropriate people to rate the performance of the individual is a key part of the process. Ideally the recipient will have full involvement in identifying who they think is in the best position to comment on their performance. The raters must be credible to the recipient for them to act on the resulting feedback.

Number of raters The assessment has to be based on a large enough sample to ensure that it is valid. If too small, there is a danger that one rater‘s view will have a major impact on the overall results. 7 to 12 respondents are usually sufficient in terms of reliability.

(3.) The questionnaire The design of the assessment, reporting and feedback process should suit the purpose of the exercise. It needs to describe the behaviours, which relate to actual job performance. It should relate to existing measurement systems within their area, such as competencies. It also needs to be in line with City‘s culture and values.

T.Y.B.M.S

Page 24

360 DEGREE PERFORMANCE APPRAISL

The questionnaire needs to be relevant to the raters and their day-to-day involvement with the individual. A well-designed questionnaire should offer respondents the opportunity to indicate where they have not had the opportunity to observe behaviour, or where the behaviour is not relevant to the job, so as not to force them to guess. Ideally the questionnaire should take between 15 and 30 minutes to complete.

Qualitative and quantitative data The most effective questionnaire design is one that encompasses both quantitative as well as qualitative elements. The quantitative elements provide the structure and the qualitative questions provide the context.

(4.) Feedback strategy It is important to consider what feedback is communicated and how and when this takes place.

Feedback report Feedback usually consists of a report. The design of the report should be kept simple and ideally designed to help the individual priorities their relative strengths and development areas Given that an individual is receiving sensitive information about how their colleagues, direct reports and manager view their performance, sensitivity is essential. Someone must be available to help interpret the results with that person. .

Trained facilitators As 360-degree feedback is being used as part of the appraisal process, feedback is communicated face to face. The people giving the feedback (appraisers) must have had the relevant training to give them the skills to support this process.

T.Y.B.M.S

Page 25

360 DEGREE PERFORMANCE APPRAISL

When feedback is communicated Ideally the individual receives feedback as soon as possible after that feedback has been collated. It is important to ensure that people receive it when there is support available to interpret the results e.g. as part of a supportive appraisal process.

T.Y.B.M.S

Page 26

360 DEGREE PERFORMANCE APPRAISL

360 Feedback- For Appraisal Or Employee Development?

In terms of communication management and performance feedback in the workplace, the 360 degree feedback methodology is becoming an increasingly common way of developing employees, appraising their performance or in some companies; a combination of the two.

The concept behind 360 degree feedback, including its pros and cons; stating that it can be defined as a ―contrived method of providing a flow of feedback to employees from all directions‖.

However a key point standpoint is the discussion of conflicting views on whether 360 degree feedback should be used primarily for employee development or performance appraisal. The purpose of 360 degree feedback arguably creates a huge impact on the overall effectiveness of the feedback to initiate positive change in employee performance as it has the potential to, for example, influence what motivates the employee and what they hope to gain from the feedback process itself.

T.Y.B.M.S

Page 27

360 DEGREE PERFORMANCE APPRAISL

For instance, provision of feedback for development purposes will ensure the employee is seeking accurate feedback from their manager and/or other raters in order to improve their performance. This means they will be more open and receptive to the dialogue about their performance. However, when the feedback is evaluative in nature, provided for a performance appraisal for example, the employee desires to appear competent and attractive in order to be scored as highly as possible, particularly if this rating is linked to a financial reward or bonus. This then significantly reduces their willingness to be receptive to the feedback provided and make the necessary changes to improve performance.

Moreover, when 360-degree feedback is used for purposes other than development such as performance appraisal, the effectiveness (or perceived accuracy) of the feedback received, arguably diminishes. For instance O‘Reilly (1994) asserts that when 360 degree performance feedback is provided by raters for the purposes of development, the feedback is ―remarkably similar‖. However when this feedback is gathered and used for more formal evaluative purposes, the scores and feedback are different as friends pump up each others scores and mark competitors as mediocre.

34 per cent of respondents in their study would rate their manager differently if the feedback was used for a performance appraisal as opposed to developmental purposes and both raters and those being rated are less fearful and more likely to be honest if they know results will be used for personal development purposes. In the same way it may encourage gamesmanship and ‗behind-the-scenes‘ deals.

I found this article really interesting- but at the same time- it all makes so much sense. It will really make good business sense to consider first WHY you are doing 360 degree feedbackis it for developmental or evaluative purposes- and what is the outcome you need.

T.Y.B.M.S

Page 28

360 DEGREE PERFORMANCE APPRAISL

ADVANTAGES OF 360 DEGREE APPRAISALS o o o o o o o o o

Provides a more comprehensive view of employee performance.

Increases credibility of performance appraisal.

Feedback from peers enhances employee self-development.

Increases accountability of employees to their customers.

The combination of opinions can approximate to an ‗accurate‘ view Comments expressed by several colleagues tend to carry weight Some skills are best judged by peers and staff, not by manager alone Feedback may be motivating for people who undervalue themselves The wider involvement help to engender a more honest organizational culture

DISADVANTAGES OF 360 DEGREE APPRAISALS o o o o o o

Time consuming and more administratively complex.

Extensive giving and receiving feedback can be intimidating to some employees.

Requires training and significant change effort to work effectively.

Results can be difficult to interpret Feedback can be damaging unless handled carefully and sensitively Can generate an environment of suspicion if not managed openly and honestly

The 360-degree appraisal significantly differs from the traditional supervisor-subordinate performance evaluation. Rather than having a single person play judge, a 360-degree appraisal acts more like a jury.

The people who actually deal with the employee each day create a pool of information and perspectives on which the supervisor may act. This group of individuals is made up of both internal and external customers.

T.Y.B.M.S

Page 29

360 DEGREE PERFORMANCE APPRAISL

Using 360-degree appraisals provides a broader view of the employee‘s performance. The most obvious benefit of the 360-degree appraisal is its ability to corral a range of customer feedback. Because each customer offers a new, unique view, it produces a more complete picture of an employee‘s performance. Unlike with supervisors, employees can‘t hide as easily in 360-degree appraisals because peers know their behaviors best and insist on giving more valid ratings. In addition to providing broader perspectives, the 360-degree appraisal facilitates greater employee self-development. It enables an employee to compare his or her own perceptions with the perception of others on the employee‘s skills, styles, and performance.

T.Y.B.M.S

Page 30

360 DEGREE PERFORMANCE APPRAISL

RISK OF 360 DEGREE PERFORMANCE APPRAISAL Appraisal of performance is not the same as an assessment of 360 feedbacks.

Here are some of the risks of 360 degree feedback appraisals.

Discrimination from Raters They can distort the peer performance appraisal information to help or harm the employee being rated.

Mistrust of the 360 degree performance appraisal system If a business or organization already has a culture of suspicion and mistrust of management by the employees, a 360 degree evaluation feedback will not work.

Employee perception of rating Employees receiving negative performance appraisal comments will focus blame on the co-workers and supervisors who are the raters. Raters are normally selected anonymously so the employee doesn‘t know exactly who is evaluating them and did not give them a good rating of performance and appraisal.

T.Y.B.M.S

Page 31

360 DEGREE PERFORMANCE APPRAISL

THE PROBLEM WITH 360 FEEDBACK This is a good challenge to using 360 Degree Feedback as a means of communication in an organization. I would respond as follows: Face-to-face communication, with immediate and relevant feedback is of course the best way to manage individuals and teams. 360 Degree Feedback should never be used as a substitute for this, or as a way of avoiding difficult conversations.

360 Degree Feedback is part of a wider set of activities that helps people to understand their own skills and how they can grow as managers or leaders in their organization. That‘s why generic 360s are less useful that those that are customized and aligned with the organization‘s goals.

Even in organizations with good face-to-face feedback, we find that individuals who receive 360 Degree feedback are often surprised at the perceptions of others about them, and that this can lead to an increased awareness of their day to day behaviours and their impact on other people.

And in an ideal world, of course I should tell my boss when I‘m not happy that she chews me out in front of the rest of the team…and she should accept that feedback directly from me and without any reprecussions, but we know that‘s not always the case. And maybe my boss needs to understand that a number of other people might feel that way? 360 is a great way of getting that message across. Used correctly and in the right situations, 360 Degree Feedback is a very powerful tool for development; please don‘t throw the 360 Degree Feedback baby out with the bathwater !TRACK: THE RIGHT TRAINING, FOR THE RIGHT PEOPLE, AT THE RIGHT TIME

T.Y.B.M.S

Page 32

360 DEGREE PERFORMANCE APPRAISL

DOES 360-DEGREE FEEDBACK NEGATIVELY AFFECT COMPANY PERFORMANCE? STUDIES SHOW THAT 360DEGREE FEEDBACK MAY DO MORE HARM THAN GOOD. WHAT'S THE PROBLEM? PERFORMANCE MANAGEMENT - STATISTICAL DATA INCLUDED "If we practiced medicine like we practice management--based on hunch, intuition and ideology--we would have much more malpractice and a lot of mortality and morbidity."

Those are tough words from Dr. Jeffrey C. Pfeiffer, professor of organizational behavior at Stanford University and a leader in management thinking, but they are on the mark. Too many organizations base their human resources investment decisions on tradition, fads or competitors' practices, instead of on sound financial measures.

A perfect example of this phenomenon may be 360-degree feedback. Adopted by a growing number of organizations, 360-degree feedback is widely accepted as an effective performance management tool.

However, new research shows that 360-degree feedback programs may hurt more than they help. Watson Wyatt's 2001 Human Capital Index (HCI), an ongoing study of the linkages between specific HR practices and shareholder value at 750 large, publicly traded companies, found that 360-degree feedback programs were associated with a 10.6 percent decrease in shareholder value.

That doesn't necessarily mean 360-degree feedback programs should be abandoned. But it does mean organizations should take a second look at their performance management programs to see if they are accomplishing what they are supposed to.

Popularity of 360-Degree Feedback 360-degree feedback is a performance appraisal approach uses input from an employee's supervisors, colleagues, subordinates--and, sometimes, even suppliers and customers. Most 360-degree feedback programs focus on the manager level and above.

T.Y.B.M.S

Page 33

360 DEGREE PERFORMANCE APPRAISL The use of 360-degree feedback has grown dramatically in recent years.

According to HR consulting firm William M. Mercer, 40 percent of companies used 360-degree feedback in 1995; b 2000, this figure jumped to 65 percent.

The premise behind 360-degree feedback is logical: The people who work most closely with an employee see that person's behavior in settings and circumstances that a supervisor may not. And, in theory, the more complete the insight into an employee's performance, the more likely he will understand what needs to be improved and how.

The theory is very promising. The reality, on the other hand, is another matter.

Watson Wyatt's 2001 HCI report revealed that companies using 360-degree feedback have lower market value. According to the study, companies that use peer review have a market value that is 4.9 percent lower than similarly situated companies that don't use peer review. Likewise, companies that allow employees to evaluate their managers are valued 5.7 percent lower than similar firms that don't.

Taken together, these practices are associated with a 10.6 percent decline in shareholder value.

Voices of Doubt The HCI study is not the only indicator that 360-degree feedback programs may be failing to match their promise. Researchers and formerly strong advocates of 360-degree feedback have begun to raise questions. Jai Ghorpade, a professor of management at San Diego State University, wrote in the Academy of Management Executive that, "while it delivers valuable feedback, the 360degree concept has serious problems relating to privacy, validity and effectiveness."

Ghorpade also reported that out of more than 600 feedback studies, one-third found improvements in performance, one-third reported decreases in performance and the rest reported no impact at all.

John Sullivan, professor of human resource management at San Francisco State University, says "there is no data showing that [360-degree feedback] actually improves productivity, increases retention, decreases grievances or is superior to forced ranking and standard performance appraisal systems. It sounds good, but there is no proof it works."

T.Y.B.M.S

Page 34

360 DEGREE PERFORMANCE APPRAISL Roots of the Problem Why is 360-degree feedback failing to live up to its potential? For starters, giving effective appraisals is a difficult task. Unless everyone participating in a 360-degree program is trained in the art of giving and receiving feedback, the process can lead to uncertainty and conflict among team members.

Another issue is that there may be a gap between an organization's business objectives and what 360-degree feedback programs measure. Typical 360degree feedback programs assess competencies that are not directly related to business results or are so broad that they aren't relevant to the average employee.

The time and cost associated with 360-degree feedback also are stumbling blocks. By trying to capture every nuance of a worker's performance, many 360-degree feed-back programs have become so complex that they require a much greater investment in time and money than they can return.

Another common problem: Reviewers and those being reviewed fail to follow up after feedback. When there are no consequences for poor performance-which often is the case with 360-degree reviews--performance won't change.

Mend It, Don't End It Despite these drawbacks, there are good reasons not to give up on 360-degree feedback.

The process still holds the potential to deepen employees' understanding of their own performance. And, it may be able to help companies create value by better aligning job performance with business strategy.

The question is this: Can 360-degree feedback be implemented in such a way that it achieves these benefits without negatively affecting the bottom line? Based on our analysis--and conversations with clients-- we believe the following steps may help companies transform 360-degree feedback into a value creator, not destroyer. * Implement 360-degree feedback for the right reasons. "The first thing you need to ask is why you're doing it," says Paul Rudely, a New York-based executive coach. If you can't articulate a strong business case for a 360-degree feedback program, it should not be introduced.

T.Y.B.M.S

Page 35

360 DEGREE PERFORMANCE APPRAISL Jeff Seretan, head of human resources for Barclay's Global Investors, based in San Francisco, agrees. "You should not implement it unless you can show that it is solving a problem or adding value," he says.

Barclay's uses 360-degree feedback to provide senior executives with input on their management styles. "Our executives had minimal input into their leadership styles, so our goal was to address these information gaps," Seretan explains. * Assess the costs of the program. Employers must "assess the real burden they are placing on the organization by doing 360-degree feedback," Seretan says.

"If you don't do it in a way that is targeted and strategic, you run the risk of value destruction. * Focus on business goals and strategy. Feedback should provide employees with insight into the skills they must develop to help the organization meet its goals. * Do not rely solely on 360-degree feedback. Employees must receive regular, timely feedback about their day-today performance. "360-degree feedback is just one part of our approach," Seretan says.

Rudely likes to use 360-degree feedback as a baseline for a more in-depth look at an individual's performance profile. "While I've yet to see a 360 that was inaccurate, often they can stand to be fleshed out a bit," he says.

He recalls one 360-degree feedback assessment that made an employee "look like Mother Theresa." The woman was very talented, he says, "but nobody walks on water like that. I conducted a series of personal interviews with the woman's raters to follow-up. After the interviews, I had a much better view of her strengths and weaknesses."

Additional interviews won't always be necessary, but companies should consider using them in situations where they can help clarify the results of 360 feedback. Ultimately, the thing to remember is that 360 feedbacks is just one part of an overall performance management system. * Get support at all levels of the organization. Make sure executives play a key, visible role. And, give line employees a voice in designing and implementing the program to ensure relevance and ownership. A 360-degree feedback program is doomed if HR is its only champion.

T.Y.B.M.S

Page 36

360 DEGREE PERFORMANCE APPRAISL * Train people in giving and receiving feedback. Companies that implement 360-degree feedback without first checking and developing managers' feedback skills risk serious damage to teamwork and morale. Providing constructive feedback takes instruction, training and practice.

While training individuals to give and receive feedback may temporarily increase the expense associated with 360-degree feedback programs, the gains will outweigh the higher costs as the feedback delivered to participants becomes more focused, targeting the behaviors most closely associated with value creation and destruction. Ultimately, the goal should be to create a culture in which individuals feel comfortable giving and receiving feedback--both positive and negative--on a real--time basis, rather than waiting for an annual review. * Create an "action plan" for each employee based on the feedback. "Knowing what to do and not doing it doesn't get you very far," Pfeiffer says.

Rudely recommends that individuals sit down with their managers and their subordinates and review scores. "They should present their scores and then ask, 'Which ones do you think are the most critical to being as effective as possible, and what tactics are necessary to get there?"'

Companies should identify and enforce rewards and consequences for individuals related to their success in following their action plans. "If the program is just another add-or and not part of a scorecard, you're kidding yourself," Rumely says.

Monitor implementation, ask for ideas for improvement and make adjustments.

Companies don't always get 360-degree feedback exactly right on the first try.

By monitoring results, asking for feedback on the process and implementing changes based on the answers, companies may be able to put 360-degree feedback programs back on track.

It also helps to continually benchmark results against the objective articulated at the outset. "For us, the test is not whether we have a program in place, it's whether we got the desired result," Seretan says. * Recognize that 360-degree feedback is not a panacea. Just because an individual receives insight into his behavior doesn't mean he can--or will-change it. Traditional performance management systems have struggled with T.Y.B.M.S

Page 37

360 DEGREE PERFORMANCE APPRAISL this axiom for years, and it is naive to think that 360-degree feedback programs will be significantly different.

Take Another Look The findings about 360-degree feedback programs are eye-opening. The fact that they are associated with a decline in shareholder value should persuade HR managers to revisit their existing or planned 360-degree feedback programs.

The existence of such data also should force companies to ask themselves what they hope to gain from 360 reviews--or, for that matter, from any HR initiative they undertake. What is the potential return on investment (ROT)? How do ROI projections compare to actual performance? And, if expectations haven't been met, what can be done to improve the effectiveness of these programs?

Implementing a successful 360-degree feedback program is akin to managing your own investment portfolio: You can come out ahead, but it takes work.

Feedback Varies with Your Point of View

By Kenneth M. Nowack Multi-rater feedback can raise more questions: How is an employee to react, for example when his manager gives him negative ratings while feedback from his direct reports an peers is situation. Research suggests than disagreement between rate groups is common-and that the resulting confusion creates challenges for employee development.

The strength of 360-degrees feedback is that it reflects him varying perspectives of different rate groups. That's also part of the problem. What one group views as effective behavior, another group may see as problematic.

And each rater group brings natural biases to the table. For example studies conducted by Organizational Performance Dimensions find that supervisor feedback tends to be based no bottom line results (are tasks completed on time T.Y.B.M.S

Page 38

360 DEGREE PERFORMANCE APPRAISL and well?) technical competence and whether an employee's behavior draws complains or clients.

By contrast direct reports base their reviews on factors such as willingness to involve the direct report in decisions interest in a direct reports professional development and trustworthiness Peers who lack perspective on their colleagues' day-to-day performance tend to focus on leadership potential. Their remarks often reflect opinions or whether the participant has the "rights stuff" to motivate and create a compelling vision for others to follow.

None of these perspectives is wrong and all of these insights can be valuable in creating a 360-degrees view of performance. However it's important that the person being reviewed-and his supervisors-understand how the filters used by different groups affect how they rate performance.

Kenneth M. Nowack is a licensed psychologist and director of Organizational Performance Dimensions, a Santa Monica Calif: based company specializing in 360-degree-feedback.

Focus on Why and How Jai Ghorpade In evaluating the effect of 360-degree feedback--on any HR practice--on firm performance we must ask why companies about it. For example in the 1930s many troubled companies adopted Joe Scanion's group incentive plan. As a result a snapshot of companies using the Scanion Plan at that time would have shown that the plan was associated with poor performing companies.

Therefore, I suggest caution in interpreting the Watson Wyatt study. We nee to know more about companies motivation for adopting 360-degree feedback as well as their financial condition before and after adoption. Perhaps the researchers can ferret out this information.

Assuming there is some truth to the Watson Wyatt report. I would like to focus on a potential explanation provided by Plau and Key for why 360-degree feedback is not living up to its advanced billing. The authors state that there may be a gap between an organizations business objectives and what 360degree feedback programs measure. I strongly emphasized this point in an T.Y.B.M.S

Page 39

360 DEGREE PERFORMANCE APPRAISL article they cite, which appeared in the January 2000. Academy of Management Executive.

But I believe the problem goes beyond congruence with company objectives.

Most companies using 360-degree feedback tent to employ generic off-the shelf instruments that are of interest to psychologists but may not have much relevance to the organizational context in which they are being used. It is a question of the relevance of the behaviors and traits on the feedback instruments to specific interpersonal and cultural problems a specific company laces are a specific time.

Assuring context relevance is not easy and calls for a very different type of competency on the part of the HR professionals and other who are helping companies to use 360-degree feedback.

T.Y.B.M.S

Page 40

360 DEGREE PERFORMANCE APPRAISL

THE DANGERS OF USING 360 DEGREE FEEDBACK FOR PERFORMANCE APPRAISAL- DAVID LASSITER

In a time of low unemployment and transient loyalty, knowledgeable managers are keenly aware of the need to motivate, develop, and retain quality people. Research has clearly indicated that employee satisfaction is a key ingredient to loyalty and retention and is heavily influenced by feedback on performance. Managers increasingly, and mistakenly, look to 360-degree assessment as a quick and easy solution to the feedback dilemma.

Trend: Inappropriate use of 360 degree feedback can unravel years of environment building effort and huge investments of bottom line dollars. It is not, however, the "silver bullet". There is a rising demand in organizations for improved performance and results. American business during the 1970's and '80's was in serious trouble. In the 1990's, this situation provided the energy for finding new approaches and processes to boost performance. In the new century, organizations in all sectors are challenged to operate even more responsively and efficiently. Raising individual and team performance levels is central to this process and 360 feedbacks have been increasingly used as part of the solution. Unfortunately, there is an advancing drift toward using 360 feedbacks for performance appraisal. Organizations need to be careful here.

Using 360 for appraisal may be an intriguing idea, but it's not the appropriate use of this powerful new technology. Used for appraisal purposes, It can put the organization at unnecessary risk and has a negative impact on motivation, performance, and the entire work environment.

Tools With Different Purposes At its best, performance appraisal is an evaluative process used to determine results. Its' purpose is to measure and evaluate contribution to the organization in order to provide feedback, and fairly distribute rewards.

Performance appraisal allows employees to more clearly see the results of their efforts, the relationship between their job and the organization's performance, and be rewarded for their particular contribution.

360 feedbacks is a developmental tool. It is designed to encourage employees to grow and develop by providing feedback on their proficiency in the skills, competencies, behaviors, and practices related to the conduct of their T.Y.B.M.S

Page 41

360 DEGREE PERFORMANCE APPRAISL jobs. By design, it is good at identifying, measuring, and improving the skills and competencies needed to perform successfully. It is especially good for the hard-to-quantify interpersonal areas (often labeled the 'soft skills') of behaviors and practices. Examples of this include listening, informing, resolving conflict, coaching, teamwork, and leadership. Performance appraisal, on the other hand, is effective for measuring outcomes and results, what people are actually hired for and paid to produce. It is designed to clarify and document the goals, outcomes, milestones, time frames, and measurements to be used. Performance appraisal and employee development are separate and distinct processes with different purposes and different measurement tools. They can and do complement each other. They are related, but they are distinct.

Problems With The Linkage It is too often assumed that since multi-source is better than single source, automated is faster than manual, and evaluating performance (results) is the same as measuring proficiencies (skills, competencies, etc.), then 360 feedback is simply a more efficient and effective tool for conducting appraisals.

Assumptions like these can get you in trouble. For developmental purposes, multi-source feedback does have more validity and leveraging ability than single source. It is broader and brings in multiple and more balanced perspectives. But inexperienced multi-source raters are generally not as adept at providing balanced and objective feedback as the single source supervisors they may be replacing. They can have enormous problems separating honest observation from personal differences and biases. For appraisal purposes, coworkers are insufficiently qualified to give evaluative feedback that affects pay and promotion.

Because 360 feedbacks are usually automated or web-based, it has what marketing people call "sizzle". But is it appropriate to performance appraisal because of its speed and ease? What is it that makes appraisal or development particularly effective? Research indicates that it is the quality of the conversation between the manager and the employee that is important.

Being able to explore and discuss aspects of one's work with clarity and without the usual time pressures is highly valued by most employees. It is the quality of the interaction, the essential performance conversation that provides motivation and builds trust and loyalty.

Performance appraisal in most organizations is used to determine merit increases and bonus amounts. However, if 360 feedbacks are linked to compensation decisions, it loses its power and benefit as a developmental tool.

When employees recognize that their financial rewards are based on multiT.Y.B.M.S

Page 42

360 DEGREE PERFORMANCE APPRAISL source feedback ratings, they quickly see how the new game is played.

Realizing what is required to achieve a good appraisal, employees can manipulate the process to ensure the desired outcome. The 'rate' can be helped or hurt. Putting two and two together, employees realize that "if you scratch my back, I'll scratch yours." Suspicions that were formerly directed at performance appraisal are now focused on 360 feedback. The "new" system becomes tainted.

Trust and honesty begin to break down in favor of getting a good review. As a result, actual skill proficiencies can decline which, in turn, leads to a weakened ability to compete or deliver, and a performance environment of mediocrity.

This can result in defensiveness, denial, conflict, accusations, and loss of trust.

It puts the relationships within the work group in jeopardy and can lead to a decline in productivity and performance.

Finally, organizations using 360 feedbacks as a performance appraisal tool are exposing themselves to increased liability. 360 feedbacks is not a tested or validated mechanism for performance appraisal. An organization needs to be prudent and consistent with the standard and proven performance appraisal approaches.

Potential Dangers  Skill levels stay relatively flat or even decline because the "360 appraisal" is not taken seriously.

The numbers needed for a "good" appraisal can be informally fixed by silent agreement among raters. Maximizing the size of the increase or bonus overshadows the desire to elevate performance.  Individual development plans become window dressing. People may go through the motions to create them but expend little effort in implementation.

When not held accountable for this, performance levels off.  If employees don't get a "good" appraisal, blame is placed on co-workers causing a rise in the level of mistrust and apprehension. The work environment becomes politicized, candor and honesty are compromised, trust and integrity are damaged, risks are avoided, motivation diminishes, morale drops, performance declines, and turnover rises.

T.Y.B.M.S

Page 43

360 DEGREE PERFORMANCE APPRAISL The Bottom Line Executives and managers considering the use of a 360-feedback tool for performance appraisal need to be aware of the inherent differences between them. The bottom line: Keep developmental feedback separate from appraisal and compensation decisions. Using 360 feedbacks for the wrong reason can result in decreased trust, loyalty, and performance, and increased risk. Large investments of time, money, and credibility will be lost.

T.Y.B.M.S

Page 44

360 DEGREE PERFORMANCE APPRAISL

How To Avoid The Dangers Of Using 360 Feedback In Performance Management - By Dennis E. Coates

This early form of multi-source (360) feedback was practically unknown in business organizations thirty years ago. 360 did not become popular until the late 1980s, and then mostly as an executive development tool. Today, it has been introduced into most Fortune 1000 companies, and its use is spreading. It is now affordable enough to use with all employees, and it's also flexible enough to use in a variety of applications, such as team development, customer feedback and organization climate surveys.

Senior managers are intensely interested in this application, because performance appraisal has been a perennially frustrating area of human resource management. On the one hand, managers need ways to let people know how they are doing and to document individual achievements and problems. On the other hand, few organizations have set up appraisal systems that do this without creating discontent, distrust, loss of productivity and law suits.

The new 360 feedback technology is viewed by many as an intriguing solution to the problems with traditional performance appraisal. With ratings coming from many sources, evaluations can have greater validity. With on-line input systems, people can give ratings and comments quickly and conveniently. The desire to use 360 technologies for performance management is strong, even though a pattern of real-world successes and best practices has not been established.

Most managers don't understand the risks of using 360 feedbacks as a platform for performance management. Furthermore, they aren't aware that this concept is a major controversy among HR practitioners. . 360 evolved over two decades as a developmental feedback process, not as a performance appraisal process.

Experts agree that computerizing an appraisal system will not correct its inherent problems. While multi-source judgments are usually superior to single-source judgments, experience has shown that linking competence data to pay and personnel decisions introduces unacceptable biases into ratings, thereby rendering the assessment system invalid.

Still, many organizations are boldly going into uncharted territory, encouraged by authors who suggest that with the right technology and know-how, they can T.Y.B.M.S

Page 45

360 DEGREE PERFORMANCE APPRAISL work around the issues. Computer programs that facilitate 360-based appraisal have appeared positioned to capitalize on an expressed need in the market. At the same time, most experts and organizations are backing away from this application.

Why? Are the dangers real? Is 360-supported performance management too good to be true? Can it be achieved with the right know-how? In the end, will the judgment of bold executives prove to be superior to the cautiousness of human resource professionals?

Using 360 feedbacks in the context of performance management involves significant risks that no prudent manager should underestimate. It's as if a dark, mysterious territory separates managers from the promised land of high-tech appraisal. But approaching this territory is like visiting a great city. The payoffs are there, but part of the journey is knowing where not to go and what not to do. Guides promise to lead the way, but a prudent traveler should make some preliminary inquiries. What's involved in this path? What are the options? What are the risks? What are the costs? How to minimize risks and obtain the maximum benefit when using individual 360 feedback in the context of performance management. The prudent path has three guideposts: (1) Link competence feedback to development decisions, (2) Link results feedback to pay and other personnel decisions, and (3) Maintain confidentiality.

Guidepost 1: Link competence feedback to development: Using 360 successfully in performance management requires a clear understanding of what is meant by "performance."

The word performance refers to results what gets accomplished. Have individuals, teams and organizations achieved their goals? Are standards being met? Are projects completed on time? Are products and services delighting customers? Have business goals been achieved?

The word performance also means something else: competence how well people do their work. Are people knowledgeable and skilled? How effectively do they use their skills? How well do employees interact with each other?

How do people treat their customers? Are procedures effective? How is the work getting done?

T.Y.B.M.S

Page 46

360 DEGREE PERFORMANCE APPRAISL Managing performance means managing both results and competence. Both aspects can be measured, but they should be measured differently and separately.

Measuring competence as the first step to self-improvement is the best use of 360 feedbacks. In this role, there are no concerns about using the results to put someone's career or compensation in jeopardy.

It's important to keep in mind that 360 feedbacks is not the best tool for measuring competence that is already easily quantified/measured. This includes most technical areas. For example, why would you ask for several people's opinions about someone's typing ability, when all you have to do is conduct a five-minute performance test?

However, many key workplace skills and activities are exceedingly difficult to quantify and measure. These encompass mostly the interpersonal dimension of work: communication, team interaction, leadership, customer service, consulting, sales, negotiation, presentation, instruction and facilitation. Because multi-source feedback uses scaled ratings from a variety of sources on researched areas of performance, its able to compile remarkably objective performance data, and modern 360 administration software programs make doing so a relatively simple, cost-effective procedure.

Guidepost 2: Link results feedback to pay and other personnel decisions.

There's nothing wrong with linking feedback to personnel and pay decisions, provided that the feedback is about results. People should be held accountable for results and rewarded for achieving them. But in a desire to "pay for performance," organizations sometimes mistakenly focus on the competence aspect, rather than the results aspect of performance. They make this error because of a failure to appreciate the distinction between competence and results, and because 360 feedback makes it easier to gather competence data than results data.

The magnitude of the error has to do with the fact that it's enormously expensive to administer compensation programs. If the rewards don't have the desired impact on results, this huge investment is largely misdirected.

However, executives have learned that rewarding only business results can have unintended negative consequences.

T.Y.B.M.S

Page 47

360 DEGREE PERFORMANCE APPRAISL

Rewarding results is a simple concept, but the challenge is to set the right goals, which is the responsibility of senior managers. Leaders must be wise enough to define outcomes that actually help an organization achieve its vision. Some organizations overemphasize financial objectives, not appreciating that if they don't also focus on employees and customers, the desired financial results will eventually falter.

The key is to know which outcomes will contribute most to the organization's success, measure them and reward their achievement. It's better to focus on major results rather than on a comprehensive list. And it's important to specify end outcomes, not in-process milestones. Furthermore, desired outcomes usually involve a team effort. Therefore, team goals and team rewards are often more appropriate than individual ones.

Most business goals are easily quantified, and effective methods for measurement already exist. In this case, 360 assessment systems will not be needed; it wouldn't make sense to ask for opinions about on-time deliveries, improved quality, reduced waste, safety, sales, new accounts, market share, project phases completed, profit, return on investment, etc., because effective systems already exist to compile and track this information.

However, some key results are hard to quantify. For example, how would you measure whether a leader was taking care that creates desired business outcomes? How do your customers feel about the way you treat them? Can be find out by using customized customer satisfaction surveys. How do team members feel about working in their group? You can find out using team climate surveys. Some 360 software programs are flexible enough to administer customized climate surveys, although it's important to keep these surveys separate from individual development assessments. Using the results of a baseline survey of carefully chosen leadership outcomes (such as levels of trust, loyalty, commitment, cooperation, professional satisfaction, development, etc.), specific results goals tied to leadership, communication, relationships and team development can be agreed upon.

T.Y.B.M.S

Page 48

360 DEGREE PERFORMANCE APPRAISL To illustrate, the following items may be included in a team climate survey: - The work of our group helps fulfill the organization's vision and values.

- The activities of my unit are well planned.

- The people who work around me show concern for our customers.

- My colleagues encourage each other when work is challenging.

- I feel empowered to do my best work.

- Adequate resources are available to achieve my goals.

- I work in a safe environment.

- I trust my boss.

- I have the freedom of action I need to do my job.

Wise leaders understand that in a busy workplace, people focus on specific results only if there is a significant benefit for doing so. People may have the "know-how," but they also need the "want-to."

Unlike praise, salary increases and bonuses have the power to help employees care for elderly parents or put their children through college. Successful organizations have learned to define what they need from people, empower them and hold them responsible for results. When these payoffs are achieved, the people responsible are rewarded financially.

Guidepost 3: Maintain confidentiality.

Confidentiality safeguards and the perception of confidentiality are essential to the validity of the information gathered. The most important way to protect confidentiality is to limit the feedback that managers see. Coworkers may want to give a person honest feedback, because they know that if the individual doesn't face up to the truth, changes in behavior are unlikely. On the other hand, coworkers don't want their ratings and comments to be seen by managers who make personnel and pay decisions. They don't want to be responsible for drastic career consequences. In short, they may want an individual to have specific developmental feedback but only the individual and only for development.

T.Y.B.M.S

Page 49

360 DEGREE PERFORMANCE APPRAISL Assurances of confidentiality are based on trust, and this trust must be earned.

People may believe their managers when they are told that 360 inormation will be safeguarded and used for development only. But if they discover that they were misled, trust will be lost immediately and in most cases can never be restored. This consequence would render a 360 system useless as a development tool.

Eg:1 One division of a large communications company began using 360 feedbacks for team development. When faced with the need to "downsize," managers concluded that the 360 performance data would help them decide who to keep and who to let go. When employees discovered what was happening, they raised such a furor that the company had to abandon the use of 360 altogether.

Eg:2 A regional bank experimented with using 360 feedbacks for management development. But the organizational climate was characterized by low trust and internal politics, and many people feared that the data would be used for personnel and pay decisions. As a result, several participants found ways to avoid or sabotage the process. With the pilot program in disarray and the expected benefits unachieved, those who opposed the program used their influence to eliminate it.

T.Y.B.M.S

Page 50

360 DEGREE PERFORMANCE APPRAISL

T.Y.B.M.S

Page 51

360 DEGREE PERFORMANCE APPRAISL

ARGUMENTS AGAINST 360 DEGREE PERFORMANCE APPRAISAL

Despite the fact that 360 degree appraisals are being widely used throughout the world for appraising the performance of the employees at all levels, many HR experts and professionals argument against using the technique of 360 degree appraisals. The main arguments are:  360 performance rating system is not a validated or corroborated technique for Performance appraisal.  With the increase in the number of raters from one to five (commonly), it becomes difficult to separate, calculate and eliminate personal biasness and differences.  It is often time consuming and difficult to analyze the information gathered.

The results can be manipulated by the employees towards their desired ratings with the help of the raters.

The 360 degree appraisal mechanism can have a adversely effect the motivation and the performance of the employees.

360 degree feedback – as a process- requires commitment of top management and the HR, resources (time, financial resources etc), planned implementation and follow-up.

360 degree feedback can be adversely affected by the customers‘ perception of the organization and their incomplete knowledge about the process and the clarity o f the process.

Often, the process suffers because of the lack of knowledge on the part of the participants or the raters.

T.Y.B.M.S

Page 52

360 DEGREE PERFORMANCE APPRAISL

360-DEGREE PERFORMANCE APPRAISALS: MORE VALUE, OR JUST MORE TO IGNORE? Although it seems like performance evaluations should be a logical and productive part of an employee‘s development, they are often not anything more than ignored.

Employees often consider the process biased, with unsupported ratings that do not reflect the work they actually do. The appraisal either just pats them on the back, or criticizes them with no workable suggestions for improvement. Their review has become just another distraction during the annual (or less frequent) evaluation process. On the other hand, managers for the most part aren‘t equipped to give productive feedback; often they are afraid to provide negative feedback because of legal threats or they do not want to adversely affect someone‘s already small bonus; they are forced to spend hours filling out detailed forms and looking up figures or trying to remember specifics to evaluate their direct reports.

There is a way to do performance evaluations more effectively, a way to save the process from becoming disregarded. Multi-rater or ―360-degree‖ appraisals can provide an accurate and acceptable way to evaluate performance while saving managers time and effort.

360- Degree appraisals improve on any evaluation done by one person by combining ratings from many people who see different parts of an employee‘s performance. For example, direct reports probably have the best understanding of someone‘s delegating skills, while managers probably see someone‘s resultsfocus most clearly. To get a complete image of performance, then, data is gathered from others with various relationships to the employee. It often provides an eye-opening comparison that can serve as a good starting point for development. Gathering input from all of these points-of-view provides a fuller picture of someone‘s performance. In simple terms, 360-degree appraisals give a ―3-dimensional‖ performance report, whereas traditional performance appraisals only give a ―1- dimensional‖ report.

Traditional performance appraisals often focus on goal attainment: how close did someone come to their sales goal, or did someone meet the minimum customer service rating. Most likely, there are only a couple of people in the organization who have the data to answer these types of questions. Because of this, goal-based appraisals limit the amount of input that is available for a T.Y.B.M.S

Page 53

360 DEGREE PERFORMANCE APPRAISL performance appraisal. 360-degree appraisals broaden the amount of usable input to target perceptions of an employee‘s effectiveness. This approach takes advantage of the various relationships represented in the group of raters. So, while typically only an employee‘s boss knows whether her/his cost-cutting goals were met for the most recent quarter, many more people will have perceptions of that employee‘s financial skills, diligence, fiscal responsibility, etc–all the things necessary to reach those goals. Also, by concentrating on competencies rather than goals, the data readily lends itself to personal development.  These features of 360-degree appraisals offer several advantages that help prevent it from just becoming ‗more to ignore‘: Gathering input from multiple sources ensures that individual ratings can be anonymous. Each rater, then, can be encouraged to be open and honest since their feedback cannot be singled out from the groups.

Multiple sources of data also mean that ratings reflect multiple perspectives instead of the single top-down view afforded by traditional appraisals. Combined with the added anonymity, these ratings should give a fuller, more accurate picture of an employee‘s performance.

Since the data describes perceptions of effectiveness, using feedback for personal development is very easy. Instead of showing someone that they made their goals or not, or providing feedback in personality terms (which, more often than not, feels like a personal attack), an employee is shown how others perceive his/her behavior.

Behaviors and perceptions are much easier to change than personality. And, unlike met or unmet goals, behaviors are specific and directly actionable.

Managers only have to complete one form per employee, usually taking about 15 minutes each. There are no figures to research, no goals to look up from last year, no distribution of overall performance to worry about, no endless comparisons between employees. Compared with other performance appraisal approaches, managers are saving time and employees are getting more useful performance feedback.

T.Y.B.M.S

Page 54

360 DEGREE PERFORMANCE APPRAISL

THINKING TWICE ABOUT 360 DEGREE PERFORMANCE APPRAISAL ROBERT H. KENT, PH.D., CMC The basic concept in 360 Performance Appraisal of soliciting performance feedback not only from our supervisor but also from our customers, employees, peers and all whom we interrelate with in the course of doing our job, makes obvious sense.

But organizations should have concerns about the 360 feedback concept in the context of a performance appraisal. Many organizations have jumped on this bandwagon without sufficient consideration. In looking at the 360 feedback performance review process, please consider the following: One -Feedback should be solicited continually: Performance "appraisal" is better called performance "review" since it is the closing stage of a performance management process which begins with the clarification of performance direction and expectations. A Performance Review is a review or comparison of actual performance during the review period, with the past direction, and an opportunity to set future direction (reviews are also used for formal documentation and for use in employee development, promotion and compensation decisions). A Performance Review is never the occasion for the employee to discover how well he's performed or to find out what was expected of him during the review period.

The employee should be aware of that (his individual performance related to the performance expectations) continually throughout the review period.

A Performance Review is principally between the employee and whomever the employee is responsible and accountable to. Realistically, in most organizations this is the "boss." At the review it would be insightful, and for some jobs essential, to review how the employee met client and/or peer expectations.

But, the degree to which an employee meets client, supplier, peer or subordinate expectations is not what an employee comes to a Performance Review to discover. It's too late to learn that information at the end of the review period.

That feedback should be solicited continually by the employee throughout the review period, and then the results of this feedback activity reviewed at Performance Review time.

T.Y.B.M.S

Page 55

360 DEGREE PERFORMANCE APPRAISL If knowing how others perceive you is important for the performance of your job, then measuring that and taking appropriate action on that feedback should be part of your job and included in your job's performance requirements.

It seems irresponsible to abdicate that to a third party, like an HR department or a survey company to do for you. Do effective salespeople rely on someone else to tell them, at year's end, whether their customers were pleased with the service? And if relationships are so horrid that management can't get honest feedback directly from its employees, then the real problem won't be solved by implementing a 360 Appraisal process.

Two - A Company Culture that Uses Secret Reports?

A common approach to 360 Appraisal is to administer confidential surveys, especially so people can rate their peers and supervisor. Anonymity is ensured and employees can comment in confidence about the performance of another employee or the boss. Aggregate data is then given to the employee in question and used as input to the appraisal and eventual rating of that employee.

Notwithstanding the substantial research evidence warning of the dangers associated with peer evaluations and their low validity, basic concern about this process can be summed up with these questions. Do you really want to have a company with a culture that promotes the use of secret reports to assess and judge its employees? How can your organization pretend to be open, honest and forthright when it uses secrecy and anonymity to measure the value of employees? Is this the way you want your business to run? Supervisors are also frustrated not knowing the actual source of employee concerns so that they can attend to the problem effectively. When we set up a system which assumes it must protect against deceit and retribution, it can become self fulfilling. And as with suggestion boxes, the anonymous survey unfortunately symbolizes that not only do employees take a risk if they raise problems or concerns directly with the supervisor; but also that it's not the supervisor's job to solicit such information.

Essentially, any employee feedback process which requires secrecy risks damaging healthy working relationships, especially between employees and their supervisors.

Four - You Don't Need 360 to Include Feedback If you really want your employees to get performance feedback from the circle of people they work with, including their customers, peers and subordinates, try T.Y.B.M.S

Page 56

360 DEGREE PERFORMANCE APPRAISL the following simple process: n make "soliciting performance feedback from significant others" a part of all employee jobs and therefore a performance requirement; N determines what sort of feedback is required, and if possible develop tools to capture this information; n teach employees how to use the tools (or questions) to get feedback from their subordinates, customers, peers, etc.; n teach employees how to give performance feedback to their supervisors, peers or suppliers, etc. n teach employees how to make use of the feedback they receive, and, for example how to follow-up on their subordinates and customer concerns; n require employees to regularly review (perhaps monthly) the results of getting feedback from others, with their own supervisor, so that the process becomes a priority and so that employees are held accountable for doing so.

One final caution. Paying for performance results is a good idea, but think twice before rewarding goal achievement with salary increases: (1) It's amazingly expensive. The salary differential is awarded not just once, but every year afterward, as long as the person is employed. In addition, if salary level is linked to retirement pay, the extra compensation will be expended for an undetermined number of years during retirement. (2) The incentive doesn't have immediate impact; the full amount of the reward is distributed through dozens upon dozens of future paychecks. (3) The incentive is only temporarily effective. The motivation of a promised salary disappears immediately after it is awarded.

Once a salary is increased, it is perceived as a revision of the employment contract: fair compensation for defined levels of employment - not as a reason to continue exceptional levels of performance. Salary increases should be based on an established track record of achievement, when a history of accomplishment indicates that the value of the employee in the career market place has increased.

T.Y.B.M.S

Page 57

360 DEGREE PERFORMANCE APPRAISL

IMPROVING PERFORMANCE WITH FEEDBACK REWARDS, AND POSITIVE REINFORCEMENT Opening thought: We need to work smarter, not harder.

Feedback: objective information about individual or collective performance how am I doing? How does this compare to others?

Serves 2 functions: 1) instructional 2) motivational Three sources of feedback • Others: are peers, supervisors, lower-level employees and outsiders.

• Task: the task itself is a source of feedback as to how well or not one does something.

• Self: however, there is often a self-serving bias that is used more by those with high esteem for themselves than low. Feedback must meet certain criteria to attain desired outcomes: 1) Desire For Feedback • depends on self-reliance • self-assessment ability • preference for external information Note: -recipients must be open to feedback -low self-esteem, self-efficacy recipients do not often seek feedback -high need achievers and self-monitors desire feedback 2) Perception Of Feedback (positive or negative) Feedback can be either positive or negative and people tend to process positive feedback much better than negative.

• negative can have more positive outcomes because are motivated to improve • negative must be presented carefully to avoid creating insecurity and defensiveness • can damage self-efficacy

T.Y.B.M.S

Page 58

360 DEGREE PERFORMANCE APPRAISL 3) Cognitive Evaluation Of Feedback • accuracy, credibility of source, fairness of system, performance-reward expectancies, reasonableness of standards • if do not meet these criteria will be rejected or downplayed • personal experiences dictates how these factors are weighed • often has a profound and lasting effect on behavior 4) Behavioral Outcomes Direction, effort, and persistence, and perhaps resistance --Resistance is one outcome of feedback and one that needs to be managed. If the employee sees the efforts as manipulative, it will lead to resistance as well other negative actions. Nontraditional Upward Feedback and 360-Degree Feedback Tradition has been top down feedback especially in a hierarchical structure. Newer organizational structures are trying new approaches (such as upward feedback and 360-degree feedback, meaning that a person can be evaluated from the top, the side, outside the organization, from those below in position, etc.

T.Y.B.M.S

Page 59

360 DEGREE PERFORMANCE APPRAISL

360 ASSESSMENTS 360 feedback tools are also known as‌ multi-rater feedback multi-source assessment multi-source feedback full circle group performance review Whatever the name, the intention of the feedback should help identify the weaknesses and strengths of the workforce. It should also contribute a plan of action for the professional development of each individual.

Properly applied 360 feedbacks can help employees improve performance and skills in the workplace. It can target precise information about areas employees need to keep up to date. It also aids in identifying the specific knowledge, essential functions and characteristics that are critical to the individual‘s job.

A good feedback program will generate trustworthy and clear suggestions of how employees and managers can improve by providing a solid plan of action.

T.Y.B.M.S

Page 60

360 DEGREE PERFORMANCE APPRAISL

360 APPRAISALS | HUMAN RESOURCE MANAGEMENT 360-Appraisals, also know as ―multi-rater feedback‖ or ―peer appraisals,‖ can create a comprehensive view of an employee‘s performance.

HRsmart‘s 360-Appraisal Solution allows managers to extend beyond employee peers by gathering feedback from clients, vendors or others with whom they frequently interact.

HRsmart‘s 360-Appraisal Solution provides an easy method for gathering critical data. This strategic tool can help managers:

Gauge employee performance. Managers typically only see a piece of the picture, but what they don‘t see can be even more telling. When feedback is gathered from peers or outside contacts, a person‘s true value can become more apparent. Perhaps a customer service manager goes above and beyond every time they receive a call, or vendors receive all of the information they need on the first inquiry.

Identify leaders. 360-Appraisals can help managers more effectively pinpoint group leaders. Peer reviews are a great way to determine who had leadership ability within a group by helping you identify employees who motivate others, set good examples and can be trusted by peers to do their part—traits that are often overlooked or hard to identify in team or group settings.

Increase employee awareness. 360 appraisals provide insight into competencies and skills held by employees and can help employees better understand how the behaviors and attitudes they exhibit impacts those around T.Y.B.M.S

Page 61

360 DEGREE PERFORMANCE APPRAISL them. Anonymous feedback also encourages more open feedback and honestly, particularly when direct peers and managers are involved and Human Resource Management.

Create and manage 360 assessments. This easy-to-use system allows appraisal owners to easily generate assessments, then quickly edit, view and print the results. Data can be captured in an employee‘s annual performance assessment with the option to include it in the overall rating.

HRsmart‘s 360-Appraisal solution is a core component of the Employee Performance Management solution; however, it can be purchased as a standalone application. Contact a sales representative for more information.

T.Y.B.M.S

Page 62

360 DEGREE PERFORMANCE APPRAISL

GUIDELINES FOR USING 360 FEEDBACK AND PERFORMANCE APPRAISAL Here is a set of guidelines for when to use 360 feedback and performance appraisal that can help organization stay squarely on the road of increased performance and success: Use performance appraisal to: - Set clear, specific goals - Establish measurements to determine outcomes and results - Evaluate the degree to which outcomes and results were achieved - Determine, based on performance, what increase or bonus is due Use 360 feedbacks to: -. Identify, the skills, competencies, behaviors, and practices needed to successfully achieve goals, outcomes, and results - Measure proficiencies in skills, competencies, behaviors and practices - Assess where improvement is needed to achieve desired results - Create targeted development plans that increase capabilities and performance The best guidelines are the ones most commonly suggested by experts: 1. Ensure that performance goals conform to EEO guidelines: - Related to specific corporate goals - Linked to the person's responsibilities - Achievable - Observable - Measurable 2. Reward team development as well as business results 3. Empower people to achieve the goals you set 4. Reward the people who do the work: - If it was a team effort, reward the team - If it was an individual effort, reward the individual 5. Keep the goal-setting, tracking and reward system simple: - Reward outstanding effort, not routine performance - Track and reward outcomes, not process steps

T.Y.B.M.S

Page 63

360 DEGREE PERFORMANCE APPRAISL

FACTORS LINKED TO SUCCESS Organizations that experience success with the 360-degree feedback methods have many environmental attributes present. 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

FACTORS LINKED TO FAILURE Many organizations have rushed into 360-degree feedback without laying the foundation for success. Typical errors 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 stand alone without follow-up Poor implementation of 360-degree tool negatively affects motivation Excessive numbers of surveys are required of each worker with few tangible results provided to individuals

"There is no data it actually improves productivity, increases retention, decreases grievances or that it is superior to forced ranking and standard Performance Appraisal systems. It sounds good but there is no proof it works other than a lot of companies have tried it."

T.Y.B.M.S

Page 64

360 DEGREE PERFORMANCE APPRAISL Report On

FLIP SIDE OF 360 DEGREE FEED BACK- WHAT MAKES THE PROCESS DIFFICULT

BY N.R. ARAVAMUDHAN

In a highly competitive market, organizations are facing an unprecedented pressure to raise the bar of performance and continue to deliver to enable it leapfrog the competition. Today, a beleaguered organization will have to slug it out in the market sweepstakes to live up to the heightened expectations of its key stakeholders. Organizations are looking at ways and means to operate more effectively and efficiently. American companies, after having bloodied their hands in 70's and 80's when the US economy slid in to nadir, were always the first off the block to come up with new approaches and methods to improve performance. One such innovative assessment tool was 360-degree feedback. Debuted in US companies in 90's, 360-degree appraisal has become current flavor of the season not only in US, but also in India. Widely touted as a great development tool, 360-degree feedback is increasingly finding favour with HR managers in Indian corporate landscape. Though 360-degree approach brings slew of advantages in the wake of its implementation, it has its fair share of naysayers who pan it mercilessly as a process that leaves a trial of blood both in the organization. 360 degree, if not implemented properly can have a calamitous consequence for companies. Many experts argue that the right culture should prevail in the organization before introducing 360-degree approach; 360 degree involves collecting feed back about an individual from multiple sources.

The source, among others includes, an individual's superior, peers, internal and external customers, client reports, suppliers. Self-assessment, conducted by the individual will also be included in the exercise. To put it succinctly, the underlying objective is to find the gap between one's own appraisal and the perception of other constituents in the 360 degree feed back. There is no gain saying the fact that it's an excellent process. But the nub of the issue is that it is not always successful. There is always a mad glamour among the companies to hitch itself on to any new management fad that manages to generate quite a buzz. The fact that a competitor is doing it is good enough reason for others to follow the suit. It all boils down to one vital imperative- "How you do it is more important and critical than actually implementing 360 degree feed back". If 360 degree were to be implemented in a haphazard manner, the company is setting itself up for a disastrous situation. If people are not happy about the process, then morale will be hit hardest. Willy –Nilly, Companies may open a veritable can of worms, T.Y.B.M.S

Page 65

360 DEGREE PERFORMANCE APPRAISL making the situation muddier and murkier. Some staff will become soft target. Companies will have to assess its state of readiness vis-Ă -vis 360-degree system before taking a headlong plunge. In the light of these facts, the question that begs an answer is what makes 360-degree appraisal difficult? Some common deficiencies in the 360-degree approach that renders it less reliable and attractive are using the feedback for performance appraisal.

360 degree feedback has a different use: Performance appraisal is a evaluative process used to determine the out comes or the end result.

The result gets measured after determining a clear, specific goals and measuring the actual performance against them. Efforts, attitude, behavior, teamwork are the few performance metrics factored in performance evaluation. Experts feel that this cannot be a real barometer of job performance. 360-degree feedback is a developmental tool. It is a modeled to help employees develop by providing feedback on their expertise in the remit of skills, Competencies and behaviors. As the employees grow and nurture their skill sets and competencies, companies will be able to turbo-charge its performance levels. So the purpose of 360 degree and performance appraisal are different. If the organization tries to link both, then it will be sitting on powder keg.

Architecture of 360-degree tool is polar opposite to performance evaluation 360 feedback is a good process to zero in on and measure the skills, competencies and practices required to do a job. In fact 360 degree feedback works wonderfully well in measuring soft skills such as emotional quotients listening skills, interpersonal skills, coaching, and leadership.360 degree can also be adopted to identify the training needs. It can also be used to assess the team cohesiveness and customer satisfaction. On the contrary, performance appraisal is an evaluative process, good enough to set the standards of performance and measure the progress made against it. So performance appraisal and development tools are different from each other. Any attempt to dovetail 360-degree feedback into performance appraisal will have negative implications for the company as a whole. An eminently avoidable situation.

Linking 360 degree feedback to promotion and salary decision is risk- fraught Performance appraisal is used to decide upon salary hike and promotions. 360 degree is a development tool. If 360 degree feed back is tied to pay hikes and promotion decisions, the process will have the stamp of failure written all over it. If the 360-degree is linked to financial rewards, employees can see through the larger game plan and may begin to subvert or circumvent the system to their advantages. Some employees may get excellent ratings. Few employees may find themselves swamped by poor ratings. Trust and honesty gets short shrift.

Proficiencies and competencies of the employees will spiral downwards.

T.Y.B.M.S

Page 66

360 DEGREE PERFORMANCE APPRAISL Lack of training could spell a trouble Giving effective feedback is a tough proposition unless the company trains all the constituents involved in 360 degree feed back to receive and provide feedback. The process could plunge into uncertainty; intractable conflicts among the members could crop up. To provide a constructive feedback, people need training. Benefits will out strip the cost of training as the feedback delivered to participants becomes more targeted. Feedback will help employees identify a behavior that add or destroys value.

Cynicism abounds Like a match fixing in the cricket, there can be a "fixing" in companies also, albeit of a different kind. Raters can collude with each others to muster enough numbers to get good ratings. Employees may treat the whole exercise with disdain, as they know that the system is tainted and doctored.

Politicking may rear its ugly head.

If an individual don't get a good appraisal, the whole blame game is played out. An aggrieved individual may accuse the co-worker of deliberately giving a low rating and may demand his / her scalp. Mud slinging and muckraking will become every ones favorite Pastime in the company.

Time and cost are the constraints Time and cost associated with 360-degree feedback is a real dampener. In a bid to capture all the facets of employee's performance, the 360degree system may become unmanageable, gobbling up more time and high cost.

360 degree feedback can be counter-productive if there is no right culture in the organization.

The superiors blanch the possibility of sub-ordinates evaluating their performance. The fact that the sub-ordinates take a call on his/her performance is a frightening proposition for the bosses.

Employees may not come forward to provide feedback about bosses for the fear of reprisal. If the boss were to have less than five sub-ordinates in the rating pool, it's easier for him to track down the source of negative feedback, and launch a massive witch-hunt against the target.

Even though the sub-ordinate evaluates the bosses in anonymity they may still give favorable ratings to the superior, in order to avoid ruffling the feathers. This only obscures the picture further. Sub-ordinate feed back can help the bosses gain insight into their own strengths and weaknesses. The manager can never become responsive to the aspirations of his/her subordinate.

T.Y.B.M.S

Page 67

360 DEGREE PERFORMANCE APPRAISL

CASE STUDY: WYETH CONSUMER HEALTHCARE - AN ALL-ROUND APPRAISAL SUCCESS Wyeth is one of the world‘s leading pharmaceutical and healthcare products companies. They are research- driven, with a major focus on developing innovative new medicines that really make a difference to people‘s lives and address significant areas of unmet medical need.

Appraisals are getting harder! People work flexibly in projects across the organization - everyone is busy - appraisers see less of their people. So, when appraisal comes around, managers are inevitably less well-informed than 10 years ago. A particular problem for appraisers seems to be how results were achieved; the person's relationships, approach and values. What was achieved can be relatively easy to judge - results are usually much more visible.

Adding 360-degree feedback to its performance management process gives Wyeth Consumer Healthcare insight into how staff achieve as well as what they achieve.

The challenge Wyeth Consumer Healthcare (WCH) wanted to improve its performance management process but found judging some aspects of it presented a real challenge. "Besides specific achievements, the review also records ratings of support for the company's values of quality, integrity, respect for people, leadership and collaboration," says Don Sibley, the household medicine manufacturer's improvement manager, who has since moved on. "But, unlike performance objectives, these are not tangible but embedded in relationships and attitudes."

The programme The company decided 360-degree feedback would strengthen the review process by providing insights into how employees achieved, rather than just

T.Y.B.M.S

Page 68

360 DEGREE PERFORMANCE APPRAISL what they achieved. Over a six-month period, WCH worked with provider Simply360 to develop a process for all 62 staff Some managers were skeptical, so to create champions for the process, a pilot scheme focusing on five senior and middle managers and opinion leaders was developed. "It was important that executives showed commitment to it by using 360-degree feedback as part of their own performance management review," says Sibley. "If executives were excluded, the process would have lost credibility."

In the summer of 2007, the programme was extended throughout the company.

"We addressed the issues of honesty and anonymity at short workshops," explains Sibley. "Some were concerned people would not give the critical feedback that might lower appraisal ratings, or that individuals might seek out those who gave them critical feedback. At the workshops, people were able to express those concerns, and get them resolved by reaching an understanding."

Questionnaires had to be pertinent for each level of staff and clarity was essential. Employees negotiate with their manager who their reviewers will be and are advised to select as broad a range as possible from people they work with on a regular basis. They are also advised to consider choosing someone with whom their relationship could be improved. The reviewers complete a short online questionnaire and the results form part of the report discussed at the review, along with their own views and those of their manager.

The results Anecdotal evidence suggests the majority of managers and employees feel the 360-degree feedback has enhanced the review process and made it easier to identify personal development needs. According to Sibley, the feedback has changed the nature of performance reviews. "Reviews are no longer based on one or two individuals' perceptions," he says. "They have become much more open, honest discussions and, inevitably, some 360-degree reports have challenged managers' views about their team. The relationship between appraiser and appraised has become more equal."

THE HR VIEW Don Sibley was improvement manager at the time the process was developed.

He believes the 360-degree feedback really helped to open up a dialogue between manager and employee, by focusing on strengths that an employee T.Y.B.M.S

Page 69

360 DEGREE PERFORMANCE APPRAISL may have shown that may not have been quantifiable and therefore could have been missed by their manager. "However, the programme has to be supported carefully and has to focus on people processes, not IT," he stresses. "About 90% of the project is about people discussing how they will use the information, asking for feedback, sharing reports and planning their personal development with others. At WCH that means training at all levels so people can feel confident their concerns are addressed. This ensures the process is transparent and readily understood. Sophisticated tools would be difficult to understand.

Similarly, the administration process to manage the project needed thinking through and planning. We had to allow time to make things very, very simple," he says."

THE EMPLOYEE VIEW James Watson is group brand manager, marketing. "I was aware of the concept of 360-degree feedback but had not experienced it before," he says and admits he found the prospect a bit nerve-racking initially. "Besides your own review and that of your manager, you agree on three or four other people within the company, " he explains. "You're advised to go for a broad range. It is tempting to go for people you know you get on with who can be guaranteed to say positive things, but it is often more productive to pick people whose reactions you're not so sure of or who you feel are not so impressed. Last year, I benefited from feedback from the sales division that highlighted that I needed to get out into the field more often, as well as suggesting ways I could make their life easier. Coming at it from the other angle as a manager myself, and reading other people's views on my team, has given me a much wider understanding of how staff are delivering for others and where issues of confidence lie."

What's WCH's secret? Don Sibley, their Training and Development Manager, highlights three things‌ Good 360 Feedback designs. In particular, clear questions that provides pertinent, unambiguous feedback. And, a simple, visual feedback report that everyone finds helpful. Don is confident that poor design creates both ambiguities that fuel arguments and complexity that obstructs productive discussions.

Intelligent implementation. WCH worked hard at developing their 360 Feedback process, and then introduced it carefully. Senior managers helped shape the questionnaire, and then piloted 360 Feedback by getting feedback themselves. Taking things step-by-step enabled several T.Y.B.M.S

Page 70

360 DEGREE PERFORMANCE APPRAISL improvements - WCH discovered what worked for them. But, perhaps more importantly, it created understanding and ownership of 360 Feedback across the business before was used in appraisal.

Clear personal objectives. If personal objectives are clear, then appraisal is straightforward, the appraise did or didn't deliver. Clear objectives remove doubt and debate from appraisal rating decisions, and crucially they remove 360 Feedback results from those key decisions. Don says clear objectives make the role of 360 Feedback straightforward - it's about understanding performance not determining appraisal ratings. It's not about determining appraisal ratings or pay.

360 Feedback in appraisal has been a huge success for them. An anonymous survey of appraisers and appraises found‌ Most people said 360 Feedback made it easier to discuss performance both in terms of the company's values and the job.

68% of people described their 360 Feedback as "a fair assessment of my performance".

Almost everyone (87%) said they gave honest feedback to others.

80% of appraises and appraisers felt 360 Feedback had enhanced their annual appraisal.

T.Y.B.M.S

Page 71

360 DEGREE PERFORMANCE APPRAISL

CASE STUDY- MARUTI UDYOG

It would seem that there is no corporate human resources policy that has not had its share of controversies for being biased. With an increasing number of qualitative factors that affect employees at the workplace, democratizing the performance appraisal process to make it as fair as possible has been the dream of every HR manager.

And now qualitative factors are not just at play in the services sector, but also in manufacturing. With cubicles giving way to open offices, the top-down approach to employee performance appraisal is also on its way out.

One company that has set itself on course to further democratizing and opening up its employee evaluation process is car market leader Maruti Udyog.

The company has introduced a unique 360-degree feedback system, starting with its senior leadership. The new system has been co-developed with Ernst & Young and has been put in place recently.

Under the 360-degree feedback system, the employee is rated not just by his superiors, but also by his peers and subordinates.

"We are starting the 360-degree feedback process with employees in the top management such as chief general managers and general managers, whose performance will now be assessed based on feedback from their peers and junior management employees within the same department. Till last year, their performance was being appraised only by the Directors and the Managing Director," says Maruti's Chief General Manager (HR), Mr S.Y. Siddiqui.

Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies that are expected in a general manager. Based on that, it has prepared a questionnaire to which peers and subordinates can respond online.

T.Y.B.M.S

Page 72

360 DEGREE PERFORMANCE APPRAISL Although acknowledged as an effective tool for leadership development in the West, Indian companies have been shy of introducing such a feedback system for fear of disturbing traditional hierarchical structures.

HR consultants feel that the critical issues in implementing such a system include assuring respondents that their feedback will remain confidential and convincing the person receiving the feedback that this is a development tool and not an appraisal tool. Maruti has handled this by getting E&Y and other consultants to make detailed presentations to the senior management personnel before the process got under way. The company has a committee of general managers, called Human Resource Inter Divisional Committee (HRIDC), which is consulted on all major HR issues.

The initiative has been unveiled with an e-mail by Maruti's Managing Director, Mr Jagdish Khattar, asking people to support the online questionnaire process.

The 360-degree feedback system will also include a self-appraisal by the general manager. At the end of the process, he can compare his self-appraisal with the assessment of his subordinates and peers.

One of the benefits that Maruti is hoping to get out of the 360-degree feedback process is the sense of empowerment and importance felt by subordinates, when they are asked to offer their feedback about their superiors. Maruti currently has over 4,000 employees on its rolls.

T.Y.B.M.S

Page 73

360 DEGREE PERFORMANCE APPRAISL

APPRAISAL QUESTIONNAIRE OF 360 DEGREE SYSTEM Appraisal questionnaire of 360 degree system I/ Company info: 1. Name of the Company……………….

2. Address: 3. Tel: 4. Website: 5. Person Interviewed….

6. Position……………

II/ Appraisal info: 1) What benefits are you looking to gain from using 360 feedback?

2) How is it better than?

• MBO • Assessment Centre‘s • Balanced Scorecard • Traditional Methods of performance appraisal?

3) What are the advantages and disadvantages of 360 degree process towards the individual, team and organization?

4) Which type of 360 degree systems do you use?

• Paper-based either electronic paper or the real thing • Third party e-mail based system • Personal/telephone based • Off the shelf‘ can be purchased and run it in-house.

5) Can you explain the 360 degree process carried out in your company?

6) What is the role of the HR manager in this whole process?

7) Any training required in conducting this process?

If Yes, what kind of training and for who?

T.Y.B.M.S

Page 74

360 DEGREE PERFORMANCE APPRAISL 9) What briefing do you have in place for the participants and observers?

10) How capable are your managers of debriefing the 360 profiles with their people?

11) How many observers for one individual?

12) Who administers this process?

13) How are the questionnaires distributed?

14) On what basis are the questionnaires made (competency or result)?

What competencies do you measure?

15) How many different questionnaires will be required for different levels of management or is it uniform for all employees?

16) Is there any scoring system and which tool do you use to scale the scores?

17) What are the difficulties faced during the process and how do you overcome them?

18) Who appoints or chooses the raters, observers, etc.?

19) How much access do people have to internet and e-mail?

20) How well is the company IT system able to support this initiative of conducting a 360 degree through the internet?

21) What kind of information is targeted through the 360 degree appraisal?

22) What security is needed for individuals and for corporate compliance?

23) Who sees the individual 360 profiles?

24) What benefits have your managers gained from using a 360 feedback process?

25) How much are you using any organizational data from the 360 processes?

26) Who provides the internal administration of the system?

T.Y.B.M.S

Page 75

360 DEGREE PERFORMANCE APPRAISL 27) What mix of narrative and numerical data is required in the profiles?

28) What does the 360 degree report contain?

29) How do you manage the feedback process after the profiles have been completed?

30) How much follow-up is carried out after the 360 profiles are received?

31) What is the agreed level of confidentiality for the 360 profiles?

T.Y.B.M.S

Page 76

360 DEGREE PERFORMANCE APPRAISL

CONCLUSION The popularity of 360-degree feedback is undeniable. Yet, the perceived benefits will help the personal development of workers only in the right organizational climate. When this method is utilized in the wrong environment, the results can be detrimental. With close consideration and evaluation of the environment, the decision to employ this tool, or another, should be made carefully.

360 feedbacks can be safely linked to appraisal in a performance management system by doing the following: 1. Use individual 360 feedbacks to measure the hard-to-quantify aspects of competence.

2. Link measurements of competence to appropriate development activities. Hold people accountable for their development.

3. Use satisfaction surveys to measure the hard-to-quantify results.

4. Link the measurement of results to appropriate rewards. Hold people accountable for results.

5. Separate both processes; coordinate them in time so that they support each other.

Many of the more conventional performance appraisal methods have often proved unpopular with those being appraised and evaluators alike, 360 is gaining popularity with many managers and employees.

It offers a new way of addressing the performance issue.

When used with consideration and discipline, feedback recipients will feel that they're being treated fairly.

In addition, supervisors will feel the relief of no longer carrying the full burden of assessing subordinate performance.

The combined effect of these outcomes should result in increased motivation, which in turn improves performance.

T.Y.B.M.S

Page 77

360 DEGREE PERFORMANCE APPRAISL In light of this approach, the typical rationalizations that encourage linking individual 360 feedbacks to pay and personnel decisions are remarkably unconvincing.

"If 360 feedbacks aren‘t linked to pay, what would motivate anyone to take it seriously?" Most people want to remain competitive in the workplace, and they know that feedback gives them an edge. Feedback is important to people who want to: (1) See themselves as professionals, (2) Upgrade their skills, (3) Find out what their coworkers already know about their weaknesses, (4) Resolve problems they may be causing, and (5) Contribute to the team mission and its success.

"A multi-source appraisal is more effective than a single-source appraisal."

That's true. But single-source (boss) feedback is only one of the problems that plague performance appraisal. Using multi-source feedback as a platform for appraisal is like putting a new horn and side mirrors on a junk car. It's safer to drive, but the car still needs major repairs.

From a cost viewpoint this may sound like a reasonable idea, but as I have emphasized repeatedly, there are huge risks. The solution is to take the prudent path.

"We can start with the development-only approach, get them used to 360, then 'ease it in' to using it for performance appraisal." No matter how gradually you familiarize people with the process, if you connect a 360 appraisal to compensation and personnel decisions, employees will know that their evaluations can affect a person's career and will find it insurmountably difficult to give honest feedback and accurate ratings. When this happens, 360 feedbacks will no longer be useful for development. And since supervisors have been challenged to give fair appraisals for decades and have not met the challenge satisfactorily, how can anyone expect coworkers to be more objective?

T.Y.B.M.S

Page 78

360 DEGREE PERFORMANCE APPRAISL Trust is at the core of using 360 to enhance productivity. Trust determines how much an individual is willing to contribute for an employer. Using 360 confidentially for developmental purposes builds trust; using it to trigger pay and other personnel decisions puts trust at risk. Why would an organization consciously choose to jeopardize trust for the sake of convenience or efficiency?

In the end, leaders are responsible for "managing" performance both competence and results. Performance appraisal and 360 feedbacks are tools that help leaders fulfill this responsibility powerful tool, when used with care and good judgment.

T.Y.B.M.S

Page 79

360 DEGREE PERFORMANCE APPRAISL

Bibliography: www.google.com www.citehr.com www.indiamba.com www.simply360.co.uk/casestudies/performance-m.... www.managementparadise.com www.findarticles.com HR Magazine

T.Y.B.M.S

Page 80