Can 360 degree feedback be used to replace traditional performance appraisal systems?
Traditional performance appraisal, where the employees are reviewed only by their managers, is often preferred for purposes of advancement and pay increases. 360 feedback (perceptual data about employee performance from multiple sources) can also be made available to managers to offer a more complete picture of an employee’s impact on the organization. When organizations base performance appraisals exclusively on 360 feedback, the pressure for raters to "do no harm" to their colleagues may cause them to "pull punches", or soften their feedback. So, if there is a problem and employees are left with unclear or neutral feedback about it, improvement is unlikely and the organization’s investment is, to some degree, wasted. Therefore, most consultants encourage their clients to use performance appraisal for job evals and 360 feedback for employee development.
Bonnie Williamson
Star 360 feedback
Almost all of the reputable references on the use of 360 degree feedback caution against its use as a replacement for traditonal performance appraisal schemes. Despite these cautions, companies still do this kind of replacement, and use 360 feedback as a basis for making personnel decisions — hiring, retention, merit pay and so forth. It’s a bad idea. First, 360 degree feedback requires a culture of trust and cooperation if it is to have a hope of working. When mutli-rater feedback replaces the use of traditional performance appraisals as a basis for decision-making, it moves the focus from improving performance, to “winning the performance game”. it skews the results because there is a lot on the line — even an employee’s future with a firm. Second, it is management’s responsibility to provide feedback and information to employees about their performance, particularly if that information is to be used for personnel decisions. This responsibility cannot be delegated or abrogated with
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