by Dr. Atiq ur Rehman, Asif Ahmed and Dr. Syed Masroor Shah
What are the merits and demerits of 360 degree performance appraisal method? What are the necessary conditions for its success? This article attempts to answer these questions.
What is the process of 360 degree method?
Two streams of performance measurements run parallel, however, with a varying degree of frequency: one carried out by supervisor (more frequent, regular and periodic assessment); and second by all other concerned (administered only once or twice a year). HR Department prepares separate forms for the two streams of performance measurement. Data of performance rating from both streams reaches the HR Department, with strict confidentiality. The department prepares a report based on the two data streams. The supervisor and the employee are required to maintain incidental diaries. The supervisor provides formal constructive feedback. Formal review sessions are also conducted by the supervisor as and when felt necessary.
CEO constitutes three to four talent councils (depending upon the size of the organization): one for management positions, one for the mid level positions and one for rest of the hierarchy. Talent councils review scores of all employees. Supervisors are asked to defend the ratings given by them. In case of considerable variation between the rating given by supervisor and that given by rest of the organization, the case is selected for detailed scrutiny. A talent council can overrule a rating and may give a new performance rating to an individual whose performance rating is under review.
Green view of 360 degree method
Positives of the 360 degree performance appraisal are:
- It promotes transparency and fairness in performance ratings. Supervisors will have less room for manipulating performance scores of their supervisees. In one organization, when a talent council was holding a session, it spotted a stark difference between rating of an employee given by his supervisor and that given by his colleagues and other members of the organization. It asked the supervisor to justify his ratings, which he could not. Eventually, the talent council revised his performance score upwardly.
- It improves objective measurement and reporting of performance. The supervisors have to collect credible evidence to give and defend their ratings. Raters also learn, over a period of time, how to be objective in assessing performance of an individual.
- It offers more opportunities for improvement (individual development). It provides anonymous positive and constructive feedback to the employees. Individuals mirror themselves in the performance reports and get opportunity to find areas for improvement.
- Performance measurement can bring a positive change in the organization culture. Initially, application of this technique is likely to produce frictions in the organization. However, soon such frictions tend to diminish as everyone learns.
Dark side of the story
The 360 degree performance appraisal does have some negatives too, which include:
- Organization politics may prevail especially in case of a highly polarized culture and in small organizations
- A culture of blame game may sprout, giving a boost to internal rivalries.
- It is cumbersome and too much time consuming.
Prerequisites for the success
Following are the prerequisites for the success of the 360 degree performance appraisal:
- Organization must have formal measurable and performance driven KRAs (with clearly phased targets) for each individual
- Cultural transformation is necessary before introducing this method. There is need to promote positive and learning culture in the organization. Frequent and regular training sessions on the application and benefits of the method are recommended especially in the initial years of its introduction.
- Supervisors must maintain incidental diary to record positive and negative performance incidents so as to provide evidence to their performance assessments.
- Supervisors must hold performance review sessions with the individuals.
- All system must be automated and integrated, leaving a little room for manipulation. For example, HRTrack can be a good option for automating and integrating HR processes.