Dear Grejesh, We have often come across the concept of '360 degree' ; sometimes of its relevance and practise and other times its effectiveness, implementation and disadvantages. Let me share with you the benefits and disadvantages since you are in need of the same : - > BENEFITS Organizations that are happy with the 360 degree component of their performance management systems identify these positive features of the process. These features will manifest themselves in well-managed, well-integrated 360 degree processes. Improved Feedback From More Sources: Provides well-rounded feedback from peers, reporting staff, co-workers, and supervisors. This can be a definite improvement over feedback from a single individual. 360 feedback can also save managers’ time in that they can spend less energy providing feedback as more people participate in the process. Co-worker perception is important and the process helps people understand how other employees view their work.
Team Development: Helps team members learn to work more effectively together. (Teams know more about how team members are performing than their supervisor.) Multirater feedback makes team members more accountable to each other as they share the knowledge that they will provide input on each members’ performance. A well-planned process can improve communication and team development.
Personal and Organizational Performance Development: 360 degree feedback is one of the best methods for understanding personal and organizational developmental needs.
Responsibility for Career Development: For many reasons, organizations are no longer responsible for developing the careers of their employees, if they ever were. Multirater feedback can provide excellent information to an individual about what she needs to do to enhance her career. Additionally, many employees feel 360 degree feedback is more accurate, more reflective of their performance, and more validating than prior feedback from the supervisor alone. This makes the information more useful for both career and personal development.
Reduced Discrimination Risk: When feedback comes from a number of individuals in various job functions, discrimination because of race, age, gender, and so on, is reduced. The “horns and halo” effect, in which a supervisor rates performance based on her most recent interactions with the employee, is also minimized.
Improved Customer Service: Especially in feedback processes that involve the internal or external customer, each person receives valuable feedback about the quality of his product or services. This feedback should enable the individual to improve the quality, reliability, promptness, and comprehensiveness of these products and services. Training Needs Assessment: Multirater feedback provides comprehensive information about organization training needs and thus allows planning for classes, cross-functional responsibilities, and cross-training. - > DISADVANTAGES For every good point I just made about 360 degree feedback systems, detractors and people who have had bad experiences with such systems, can offer the down side. The down side is important because it gives you a roadmap of the things to avoid when you implement a 360 degree evaluation process. Following are potential problems with 360 degree feedback processes and a recommended solution for each.
Exceptional Expectations for the Process: 360 degree feedback is not the same as a performance management system. It is merely a part of the feedback and development that such a system offers within an organization. Additionally, proponents may lead participants to expect too much from this feedback system in their efforts to obtain organizational support for implementation. Make sure the 360 feedback is integrated into a complete performance management system.
Design Process Downfalls: Often, a 360 process arrives as a recommendation from the HR department or is shepherded in by an executive who learned about the process at a seminar or in a book. Just as an organization implements any planned change, the implementation of 360 feedback should follow effective change management guidelines. A cross-section of the people who will have to live with and utilize the process should explore and develop the process for your organization.
Failure to Connect the Process: For a 360 feedback process to work, it must be connected with the overall strategic aims of your organization. If you have identified competencies or have comprehensive job descriptions, give people feedback on their performance of the expected competencies and job duties. The system will fail if it is an add-on rather than a supporter of your organization’s fundamental direction and requirements. It must function as a measure of your accomplishment of your organization’s big and long term picture.
Insufficient Training and Process Understanding: Employees who will participate in a 360 process need training about the process, how to provide constructive feedback, how to interpret results, and more. Failure to provide the appropriate amount of training and information can sink a process quickly.
Insufficient Information: Since 360 degree feedback processes are currently usually anonymous, people receiving feedback have no recourse if they want to further understand the feedback. They have no one to ask for clarification of unclear comments or more information about particular ratings and their basis. For this reason and for the points listed in the several bullet points following this one, developing 360 process coaches is important. Supervisors, HR staff people, interested managers and others are taught to assist people to understand their feedback. They are trained to help people develop action plans based upon the feedback.
Focus on Negatives and Weaknesses: At least one recent book, First Break All the Rules: What Great Managers Do Differently, advises that great managers focus on employee strengths, not weaknesses. The authors said, "People don't change that much, Don't waste time trying to put in what was left out. Try to draw out what was left in. That is hard enough."
Rater Inexperience and Ineffectiveness: In addition to the insufficient training organizations provide both people receiving feedback and people providing feedback, there are numerous ways raters go wrong. They may inflate ratings to make an employee look good. They may deflate ratings to make an individual look bad. They may informally band together to make the system artificially inflate everyone’s performance. Checks and balances must prevent these pitfalls.
Paperwork/Computer Data Entry Overload: Need I say much more here? Traditional evaluations required two people and one form. Multirater feedback ups the sheer number of people participating in the process and the consequent organization time invested.
I imagine you can think of a variety of additional plusses and minuses about 360 degree feedback processes. As with any performance feedback process, it can provide you with a profoundly supportive, organization affirming method for promoting employee growth and development. Or, in the worst cases, it saps morale, destroys motivation, enables disenfranchised employees to go for the jugular or plot and scheme revenge scenarios. It can increase positive, powerful problem solving for customers or set people off on journeys to identify the guilty, the feedback provider who rated their performance less than perfect.
Which scenario will your organization choose? It’s all in the details. Think profoundly before you move forward; learn from the mistakes of others; assess your organization’s readiness. Apply effective change management strategies to planning and implementation. Do the right things right and you will add a powerful tool to your performance management and enhancement toolkit! Hope that suffices your need and requirement of the hour  Regards, CHRM
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