Why Should Companies use 360-Degree Performance Appraisal?
Employee engagement and performance in a company are essential to a successful organization with an eye to moving forward with holistic growth. And this growth relies on employees staying with the company as they see their contribution recognized and appreciated. Grooming employees into leadership positions is only a part of their growth. Upskilling, working on complex projects, linear or lateral growth within the company are ways in which an employee becomes a high performer. An effective performance appraisal system requires a fair and objective analysis of individual employees and their performance.
A robust appraisal system ensures that
- The management understands the strengths and weaknesses of all employees.
- Guides decision-making when setting compensation and salary, promotions, etc.
- Assesses employees’ growth and development in terms of their skillset, roles, and responsibilities
- Serves as a shared platform to engage and motivate employees
- Aligns the company’s goals with employee goals
Typically, companies incorporate the performance appraisal process to ensure that employees perform as expected. While there are several different appraisal methods and best practices a company can follow, employee feedback is pivotal to growth. And with effective feedback, you get a capable and eager workforce. But, for the feedback process to be effective, you need accuracy and validity of the information, i.e., getting relevant information from credible sources and validating them by gathering information from multiple sources. Information regarding an employee’s performance must be unbiased and factual for it to be credible. Therefore, companies must focus on bringing in a 360-degree feedback system into their appraisal process.
Classification of Feedback
Feedback can be classified in four ways: the feedback’s source, tone of feedback, quality of feedback, and feedback delivery.
The source of the feedback can be peer-to-peer, manager-to-direct report feedback, and client feedback. The 360-degree feedback is ideal as it gives feedback from all angles and is more objective.
The tone of feedback is crucial as it sets the tone for the one-on-one meeting between the manager and the employee. The tone can be either formal or informal. The older annual reviews were more traditional, but the modern and frequent reviews of the performance appraisal system in a company are more relaxed. Casual feedback does not negate the value of the input but includes a process where employees enjoy greater freedom and comfort when engaging with their managers or employers.
Quality of the feedback includes giving continuous and frequent feedback, whether positive or constructive. Note that negative feedback is not motivating, while feedback given constructively helps employees recognize their areas of improvement and start on the path to training and development. Feedback delivery can be an arduous task where most of HR’s activities conclude during the performance appraisal process. Modern performance appraisal systems make it easier with tools and technology doing the spadework. However, 360-degree feedback is key to a successful performance review as it is more frequent and comprehensive.
Why do companies rely on 360-Degree Feedback?
There are enough reasons why the 360-Degree feedback method of performance appraisal is being adopted in modern workspaces.
- The 360-degree performance appraisal system opens up employee development possibilities as it offers anonymous direct and indirect feedback. It makes it easier for employees to accept feedback that highlights their areas of improvement. Employees are open to changing their attitudes and the way they work without feeling demotivated.
- It is a holistic form of evaluation. Since the feedback data is collected from multiple sources, different business units and departments, and employee levels, there is greater scope for accuracy.
- It inculcates a level of self-awareness in employees. As employees receive feedback from many sources regarding their performance, they have an opportunity to look within and understand how they can improve their skills and attitude to fit into their workplace.
- The 360-degree feedback process improves productivity and enhances professionalism. It also creates a growth culture and offers a work environment that fosters upskilling or learning a new skill set.
- It brings transparency within the company and establishes loyalty and trust. The 360-degree feedback removes the old fear of the boss or manager and encourages employees to seek support if and when they need it. This results in creating a positive work environment, greater productivity, and improved ROI across all business units.
To Conclude
The 360-Degree feedback method offers advantages that help companies nurture their talent pool and ensure leaders are made with mentorship, training, and development in the current digital era. When implemented correctly, the 360-degree feedback is effective. Moreover, it is part of the automated and intelligent employee appraisals solution that keeps the company on track to meet its goals.
