Reviewing an employee’s performance is an essential aspect of any successful performance management process. Without a question, a 360-degree review is an effective methodology to collect inputs from various stakeholders at different organizational levels and to steer employees’ performance in the right direction.

While the 360-degree review is a developmental tool rather than a rating mechanism, many companies combine it with other assessment techniques to enhance company-wide development.

However, what is a 360-review process and what type of challenges and advantages can they bring to your organization? Here’s a detailed look at everything you would like to know about the 360-degree review.

Understanding the 360-degree feedback mechanism

A 360-degree performance appraisal, sometimes referred to as a 360-degree review, multi-rater feedback, or 360-degree management review, happens when an employer analyzes an employee’s performance through different sources such as colleagues, customers, and managers, rather than just one-on-one input from a manager directly.

Once all inputs have been obtained from various sources, it is utilized to determine an employee’s strengths, shortcomings, and talents, and may be used to create a comprehensive performance assessment report. If the 360-degree performance assessment is well-designed, it may help to improve a team’s performance, employee awareness, and communication among employees. 

However, there are significant disadvantages to the 360-degree review system as well if it is not effectively implemented. We shall cover the disadvantages of the 360-degree review system too, and suggest a solution to overcome them.

Also Read: 360 Degree Feedback: Best Practice Guidelines

A look at the pros of the 360-degree review mechanism

The 360-degree assessments can be an exceptionally efficient performance management tool. 

Provides more precise, thorough, and extensive feedback.

In a typical evaluation, the employee receives input from a single source — their immediate supervisor. However, the 360-degree review focuses on the collection of inputs from various sources, providing employees with a far larger, more diversified, and, in many circumstances, more accurate variety of perspectives on their work.

This form of feedback is often better than the performance evaluation of a supervisor, who only observes how an employee performs in certain situations.

Fosters a favorable work atmosphere

A 360-degree review helps employees and teams to understand their strengths and limitations. Whenever a team is able to recognize all of their unique capabilities and challenges, they possess the required skills and understanding to make necessary changes for advancements.

When employees understand the responsibilities clearly, aligned with a company’s objectives, they may become more effective as individuals and as teammates, resulting in a more productive and happy work environment. Thus, a 360-degree review aids in the improvement of employees’ performance and fosters strong working relationships and a favorable work environment.

Scope for development

Another significant benefit of the 360-degree review is its effectiveness in identifying an employee’s growth needs.

The collective viewpoints offered by colleagues and managers may present fair facets and provide more clarity on the shortcomings of an employee. The company may then take the required steps to close the gaps by creating training programs that promote individual development and address the skill gaps.

For an instance, during a ‘360-degree review‘, an employee may receive reviews from his immediate team leader and multiple peers on his performance and time management skills. The employee may then collaborate with his manager to establish objectives. Post this, they can create an action plan to enhance his performance, according to the available working hours to enhance time management skills.

Helps to determine training needs

The 360-degree performance review helps to identify employees’ training gaps. To elaborate, the feedback enables management to get a holistic knowledge of employees’ skill competence and, accordingly, spot specific areas where training is needed.

Offers motivation and improves performance 

360-degree feedback has been shown to improve employee performance, and team communication and collaboration. 

When utilized properly, feedback may help to create trust, enhance communication, boost overall performance, and motivate teams to work together to accomplish common objectives. Additionally, it may assist employees in aligning their objectives with those of the business and providing a better picture of the abilities necessary for success.

Understand how others perceive you

Observing how people view you in the job may be a positive experience. The 360-degree review enables colleagues to anonymously share their feelings about their peers, which is not something that occurs often in a workplace.

If you can handle constructive feedback without being offended, you would like to know how others perceive you. To deal with criticism effectively, you need to cultivate a growth attitude and see it as a chance to bring in the required improvements.

Anonymous feedback

360 feedback is often anonymous and a reason for many employees to freely voice their opinion about other employees. Thus, this can be considered as one of the benefits of 360 feedback, since certain employees may feel more at ease providing feedback. This is particularly true for both positive and negative feedback.

If certain members of your team are afraid to offer negative feedback about a colleague, 360 feedback may provide a secure platform for them to bring their concerns to the attention of their manager.

Promotes transparency

Increased transparency, resulting from 360-degree feedback, may give rise to the development of trust among employees. 

An open and trustworthy environment may improve managerial decision-making skills; enhance employees’ performance and establish a firm knowledge foundation. Thus, 360-degree feedback can be used to develop a higher degree of trust among employees and create a transparent work environment, which may help to improve employees’ performance throughout the organization.

Also Read: 360 Degree Feedback:10 Questions To Consider

Cons of the 360-degree review mechanism:

While there are several benefits to adopting 360-degree feedback, there are also concerns related to it. The following are some drawbacks of using the 360-degree performance assessment evaluation approach.

Time-consuming process

A 360-degree performance assessment might take considerable time to conduct due to a large number of participants. 

Employees need time to respond prudently to the questions, and supervisors or Human Resources professionals need time to sort through the information and assess it. Often, the quality and quantity of feedback come at the expense of extra time. 

Evaluating the feedback and putting it into a single performance review document using specialized tools, such as that offered by ‘Engagedly 360-degree performance review,’ may speed up the process.

Ambiguous assessment

If there is a lack of trust among employees, they might refrain from expressing their true opinions. If the feedback is not candid, it is also likely to be erroneous, which is ineffective. 

A small team, on the best of terms, may be fearful of being overly critical, whereas a big team may lack the necessary familiarity to provide an informed judgment. 

Prevent this issue by establishing clear boundaries and communicating expectations transparently via 360-degree feedback.

May affect leadership

It is critical to communicate to managers what they learned from the 360-degree review and how they intend to handle the feedback. 

If participants believe that the 360-degree feedback process was a waste of time or a pointless exercise, no concrete progress or constructive change will occur; confidence in leadership will erode, and engagement will likely decline. 

Leadership may avoid this by implementing an action plan based on the feedback outcomes.

No way to monitor anonymous input

While anonymous feedback is beneficial in terms of encouraging employees to voice their ideas, it can occasionally be a double-edged knife. 

If a serious problem arises within a 360-degree feedback loop, you will be unable to identify the person who provided the negative or constructive input. This makes it more difficult for the management to properly address and resolve the disagreement.

Ineffective execution

Often, companies introduce and use the 360-degree assessment approach ineffectively. It is critical to approach the assessment process correctly, which includes appropriately and positively presenting the method and optimizing the relevance of the feedback. 

This is particularly critical when transitioning from one kind of performance feedback to the other and especially when the change may influence employees’ salaries or positions.

Also Read: 360 Degree Feedback: A Guide To Get It Right

How a 360-degree review software can address the 360 review shortcomings?

The 360-degree review process comes with its own set of advantages and disadvantages. If you’re unsure whether to deploy 360 feedback within your team, the solution is to use Engagedly’s 360-degree performance review software.

Engagedly streamlines the 360-degree review process by enabling stakeholders at all levels of the business — including management, managers, colleagues, and direct reports — to provide real-time input.

Additionally, Engagedly conforms to your organization’s performance management strategy, easing the review process regardless of whether you conduct evaluations annually, mid-year, quarterly, or regularly.


Want to know how Engagedly can help you mange your remote employees better? Request us for a demo.

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