360 degree feedback is a practice where employees get feedback from those around them, such as peers, subordinates, supervisors and even customers. Its intention is to help improve the company’s performance, yet in today’s ever-shifting business environment it has become antiquated and companies should seek out new strategies for employee development.
The major issue with 360 feedback is that it can be biased; employees may feel they have to give positive reviews to their managers or superiors in order to please them. This can produce results that are unreliable, making it ineffective for HRs trying to better workplace culture and performance. Additionally, it takes up much of the organization’s time and resources for all members of the group to complete the process regularly, which often does not generate enough useful data to make up for its price tag. Moreover, needing opinions from so many sources makes it a struggle for individuals receiving the reviews to efficiently analyze them via traditional means.
Overall, 360 feedback still has its merits but companies should exercise caution when using this method due to its potential risks like skewed results and hefty costs. More modern solutions including AI systems, online surveys, quick actionable reports and automated insights should be utilized when looking for effective ways of obtaining employee performance insights instead of depending on traditional methods like 360 feedback.
For the past ten years, my research has focused on the theory behind, and practice of, 360-degree feedback. Most recently, I studied its implementation at 17 companies varying in size—from startups of a few dozen people to Fortune 500 firms—and industry—from high-tech manufacturing to professional services firms. I was looking for answers to several questions. Under what circumstances does peer appraisal improve performance? Why does peer appraisal work well in some cases and fail miserably in others? And finally, how can executives fashion peer appraisal programs to be less anxiety provoking and more productive for the organization?
My research produced a discomforting conclusion: peer appraisal is difficult because it has to be. Four inescapable paradoxes are embedded in the process:
- The Paradox of Roles: You cannot be both a peer and a judge.
- The Paradox of Group Performance: Focusing on individuals puts the entire group at risk.
- The Measurement Paradox: The easier feedback is to gather, the harder it is to apply.
- The Paradox of Rewards: When peer appraisal counts the most, it helps the least.
The novelty and ambiguity of peer appraisal, on the other hand, give rise to its paradoxes. Fortunately, managers can, with some forward thinking and a deeper understanding of their dynamics, ease the discomfort.