360 degree feedback involves employees receiving performance ratings from their coworkers, bosses, peers, and subordinates. While it provides a more well-rounded assessment and can improve team development, there are also potential downsides. Managers may not act on the feedback or be properly trained. The process can be time-consuming and expensive, with inconsistent participation. Anonymity may reduce honesty and not guarantee unbiased responses. Determining who to include can also be complicated. Maintaining confidentiality and anonymity is important for open and honest feedback.

1. One of the most important ways that employees can develop is to receive ratings of their
performance from their co-workers – bosses, peers, subordinates and others. Known as 360 degree
feedback, this activity is now widely used by human resource professionals and in leadership
development programmes.
Organisations use 360-Degree Feedback for the following reasons:
Making general personnel decisions such as promotions, terminations, pay increases, probationary
status;
Identifying training and development needs, pinpointing employee skills and competencies that
are currently inadequate but for which programs can be developed and
Serving as a criterion against which selection and development programs are validated1.
Other applications include supervisory training, management development, assessment centres, style
and leadership awareness, career development, needs assessment, training and OD evaluation,
employee coaching and personnel selection.
Organizations that are happy with the 360 degree component of their performance management
systems identify these positive features of the process. These are as follows:
Improved Feedback From More Sources: Provides well-rounded feedback from peers, reporting
staff, coworkers, and supervisors. This can be a definite improvement over feedback from a single
individual. 360 feedback can also save managers’ time in that they can spend less energy providing
feedback as more people participate in the process. Coworker perception is important and the
process helps people understand how other employees view their work.
Team Development: Helps team members learn to work more effectively together. (Teams know
more about how team members are performing than their supervisor.) Multirater feedback makes
team members more accountable to each other as they share the knowledge that they will provide
input on each members’ performance. A well-planned process can improve communication and
team development.
Personal and Organizational Performance Development: 360 degree feedback is one of the best
methods for understanding personal and organizational developmental needs.
Responsibility for Career Development: For many reasons, organizations are no longer
responsible for developing the careers of their employees, if they ever were. Multirater feedback
can provide excellent information to an individual about what she needs to do to enhance her
career.
Additionally, many employees feel 360 degree feedback is more accurate, more reflective of their
performance, and more validating than prior feedback from the supervisor alone. This makes the
information more useful for both career and personal development.
Reduced Discrimination Risk: When feedback comes from a number of individuals in various job
functions, discrimination because of race, age, gender, and so on, is reduced. The "horns and halo"
effect, in which a supervisor rates performance based on her most recent interactions with the
employee, is also minimized.
Improved Customer Service: Especially in feedback processes that involve the internal or external
customer, each person receives valuable feedback about the quality of his product or services. This

2. feedback should enable the individual to improve the quality, reliability, promptness, and
comprehensiveness of these products and services.
Training Needs Assessment: 360 degree feedback provides comprehensive information about
organization training needs and thus allows planning for classes, cross-functional responsibilities,
and cross-training.
For every good point Jotish just made about 360 degree feedback systems, detractors and people who
have had bad experiences with such systems, can offer the down side.
I) Manager issues
1. There is little evidence that managers actually listen or act differently – the process has no
value if the managers don’t act differently as a result of the data. Merely receiving feedback may
not be enough to change management behavior. And most processes do not require managers to
put together formal action plans after receiving their survey results. When they do, there is no HR
follow-up months later. Some managers may simply not be able or willing to change. In addition,
if employees see that the survey doesn’t change anything, employees may feel frustrated and even
deceived by the ―sham‖ process.
2. Managers and employees are not trained – managers are often not trained on how to
interpret and use the 360° feedback. There may be insufficient resources to provide managers with
action steps, tools, and advice on how to improve after they receive negative information. This
may frustrate managers, and it certainly will not increase productivity. In addition, employees are
not trained in how to evaluate a manager’s action or on how to give honest and accurate
feedback.
II) Issues Related to the Survey Process
1. It is time-consuming and expensive — most HR departments don’t calculate the cost of the
employees’ and managers’ time responding to the results. Often managers and employees learn to
hate the time commitment. When you include the time costs and the lost productivity, the ROI
of the process may be low or even negative. A survey that includes only a statistically
representative sample of employees would be much cheaper and almost as accurate.
2. Inconsistent participation -- 360° surveys suffer the same inconsistent participation problems as
all employee surveys. It is also possible that excited, disgruntled employees or not-very-busy
employees with idle time will disproportionately go out of their way to fill them out. Personal
motives impact results.
III) Problems Related to Anonymity
1. Anonymity may actually reduce overall honesty – almost all 360° surveys are anonymous, in
order to encourage employees to be frank. If your organization has values of openness and

3. honesty, an anonymous process runs counter to those values. In addition to sending the wrong
message, an overreliance on anonymity may cause workers to ―forget‖ how to give direct negative
face-to-face feedback.
2. Anonymity does not automatically result in unbiased employee answers – employees who fear
their manager may be afraid to give honest ratings because they fear retaliation on the entire
team. Some employees may even believe that a manager can identify which individual employees
said negative things.
IV) Issues Related to Program Administration
1. Employee data is collected too often/or not often enough – the survey is traditionally done once
a year but if employee scores don’t change rapidly, a survey every two years may be more cost-
effective. And if employee survey results can rapidly change, 360° scores should be reported
instantly in real time, using an employee-sampling technique and an electronic survey. Any
process that doesn’t use the latest available technology must automatically be considered a
dinosaur.
2. Determining who should be included in the survey is complicated – the process of selecting who
to survey can by itself be time-consuming and expensive. The broader you make the survey, the
more likely it will be filled out by individuals who barely know the person being assessed.
Including too few will mean that some stakeholders will not be represented. If you allow the
managers to self-select, they may only pick people they believe will rate them positively.
We would like to conclude by saying that 360 degree reviews are not ideal for every workplace, and
some precautions should be taken before a company adopts this strategy. Confidentiality, for
example, is key to a successful 360 review process. Subordinates will only provide meaningful
information about superiors if they feel safe from retaliation, and peer reviews will only have value if
the review structure aligns with the culture. Peers should be asked for blunt honesty in a non-
confidential setting only if the established culture is socially open and supports this kind of dialogue.
Because the objective of administering 360 surveys is to solicit open and honest feedback,
maintaining the confidentiality and anonymity of respondents should be of the utmost importance.
There are a handful of ways to help protect confidentiality and anonymity to respondents. Online
360 survey tools, such as emPerform’s eSurvey, can help to protect anonymity by generating results
without respondent information. For companies looking to guarantee absolute confidentiality for
both the raters and individuals being rated, it is often advised to trust the process to a professional
third party service.