What Is A 360 Degree Appraisal? (Definition, Pros And Cons)

By Indeed Editorial Team

Published 8 August 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A 360 degree performance appraisal provides a comprehensive view of an employee's performance. It helps organisations in gaining useful insights into team dynamics, organisational leadership and corporate culture. Adopting this assessment strategy can help professionals foster collaboration in a workplace, for professional growth. In this article, we discuss what a 360 degree appraisal is and explore the advantages and disadvantages of collecting feedback from multiple sources.

What Is A 360 Degree Appraisal?

A 360 degree appraisal, 360 degree feedback, or multi-rater feedback is when employers analyse the performance of employees using as many sources as possible, as opposed to one-on-one input from an immediate supervisor. Once gathering feedback is complete, employers analyse it to identify an employee's core abilities, areas for improvement and key strengths for producing a comprehensive performance evaluation. If the 360 degree performance assessment is well-designed, it can improve team performance, promote self-awareness and foster open communication.

Related: What Is A Performance Appraisal? (Definition And Types)

Advantages Of 360 Degree Performance Appraisals

Applying the 360 degree feedback approach has various benefits, including increasing employee engagement, creating a transparent feedback mechanism and increasing overall effectiveness of a business operation. The following are some benefits of employing this assessment method:

Provides a complete assessment

The information that a 360 degree appraisal generates is broader in scope and has the potential to be more accurate since the input comes from diverse sources. This mechanism can identify recurrent information points and trends in feedback. A deeper understanding of an employee's behaviour, work and connections emerges as the number of responders rises. Clients, customers, colleagues and other sources of feedback provide information that may not be available otherwise. When feedback comes from a variety of sources, rather than just one, professionals may be more inclined to consider it for improvement.

Related: What Is Human Resource Development? A Complete Guide

Facilitates teamwork

A team can gather the knowledge and drive required to make adjustments and improvements when they can recognise their individual and collective strengths and weaknesses. Employees may become more efficient individually and collaborate better with their team members when they are aware of the qualities they can cultivate and improve upon. This leads to a productive and efficient work environment for teamwork.

Related: 10 Powerful Tips For Successful Teamwork

Shares perceptions

Observing how other people view you at work can be a valuable experience. Participants in 360-degree feedback may have the option to anonymously express their opinions about their colleagues. Focusing on a development mentality and providing the chance to advance both personally and professionally can help participants accept feedback without taking offence.

Related: How To Provide Constructive Criticism In The Workplace

Garners more feedback

A 360 degree assessment approach addresses many problems that arise from infrequent feedback. Employees may have the opportunity to obtain feedback from multiple sources more often in a multi-rater system. Professionals may also feel that because the feedback is coming from a variety of sources, it is more accurate and fair.

Related: 20 Examples Of Feedback In The Workplace (With Examples)

Allows for anonymity

In a 360 degree assessment approach, professionals may provide and receive feedback anonymously. There are certain benefits to anonymous feedback, such as making it easier for employees to communicate their opinions honestly, particularly with critical or constructive comments. Anonymity also has the potential to increase the number of responders.

Promotes self-awareness

While employing 360 degree feedback mechanisms, employees may become more self-aware of their strengths and weaknesses. They may become inspired to strive towards self-improvement, learn new skills and develop existing ones because of this awareness. Self-awareness can also help employees bridge the gap between their own perceptions of themselves and those of others.

Related: What Is Self-Awareness? (And How To Become More Self-Aware)

Identifies skill gaps

Skills gaps can affect specific employees and a firm as a whole. A 360 degree performance review identifies personal and organisational training gaps. Well-rounded feedback gives management an accurate overview of individual, departmental and organisational competencies and helps identify specific training requirements for which management can put training programmes in place.

Related: What Is Skills Gap Analysis? (Definition And Types)

Increases productivity and relationships

360 degree feedback may improve teamwork between managers and employees and raise morale. Feedback can help teams achieve common objectives by fostering trust, boosting communication and improving overall performance. Employees may become capable of matching their objectives with those of the company and developing a deeper understanding of the competencies necessary for success.

Gives insight into work

Accurately understanding an employee's role inside a firm is one of the major purposes of a 360 degree assessment process. It helps employees to see beyond their regular responsibilities and achievements, and understand how their work affects an organisation's operations. Managers can gain a deeper understanding of how an employee interacts with a team and gain access to more nuanced feedback about their performance.

Promotes transparency

Enhanced transparency resulting from 360-degree feedback may help employees develop trust among employees. Transparency and trust are two factors that can improve decision-making and performance, all of which have the potential to raise income. When utilised purposefully, 360 degree feedback can help companies come up with new ideas, enhance business processes, make sound decisions and uncover hidden possibilities.

Disadvantages Of 360 Degree Performance Appraisals

While there are many advantages to using a 360 degree feedback method, there can be some potential drawbacks, leading to conflicts and deteriorating morale. Some of them include:

It is time-consuming

It can take significant time to complete a 360 degree performance appraisal. It takes time for sources to participate by answering questions thoughtfully and for supervisors or HR employees to read through material and analyse it with insight. The improved quality and increased quantity of feedback often comes at the cost of lost time. Weighing feedback from multiple sources and compiling it into one performance review document with customised software can expedite the process. It can also be helpful to determine whether the quality of feedback is worth the time you invest in collecting it.

It may not always be positive

Supervisors may have the temptation to use 360 degree feedback to focus on the negative aspects of employee performance rather than developing and encouraging the positive aspects. The result of too much negativity might be resentment, anxiety or disinterest. It is vital for managers to be aware of this possibility and focus on balancing negative and positive feedback, educating employees about constructive criticism and transforming unfavourable remarks into helpful, actionable suggestions.

It may not account for dishonesty and inaccuracy

Employees may not give honest criticism if there is a lack of trust between them. Instead, they may say what they believe their listeners want to hear. Feedback that is not truthful is likely also inaccurate, which is not very helpful for evaluations. Members of an enormous team might not know each other well enough to provide an appropriate judgement, while members of a small team may be reluctant to be overly critical. By establishing clear rules and being open and honest about expectations, you can avoid this predicament.

It can also foster distrust

It is crucial to follow through on communicating what managers learn from a performance appraisal and indicate how they plan to address feedback. If participants feel that the feedback mechanism is just a redundant exercise, they may not be able to contribute to tangible growth or positive change. Their trust in leadership may also deplete and overall engagement may deteriorate. Leadership can prevent this from happening by following through with an action plan based on feedback.

Anonymity can be counter-productive

While some employees may feel more at ease and express their thoughts more freely, the opposite scenario can also occur. Some employees may feel no need to take the process seriously and some may take advantage of the anonymity to be too harsh, negative or to focus on flaws. It is also not unusual for employees to treat anonymous constructive criticism with scepticism and question the motivations behind it.

Execution can falter at multiple stages

Organisations may implement and use the 360 degree assessment approach incorrectly. It is crucial to use the assessment technique in an appropriate way, which includes effectively and positively presenting the approach to maximise the value of the feedback. This is especially crucial when switching from one type of performance feedback to another or when the process can have a direct impact on employees' salaries or designations.

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