"In the 1960s, a breakthrough in sharing the assessment results came from the Peace Corps when the psychologists who were working with the volunteers used surveys that were geared to expand the volunteer's self-knowledge, under the assumption that expanding self-knowledge would help a volunteer better deal with culture change. This was the first time that this type of assessment was done for the primary benefit of the person being assessed" (2003, p. 73). Therefore, the original intent of the 360-degree feedback method was to provide the individual being evaluated with the type of feedback they needed to formulate an informed opinion concerning what others thought of them and how this information could be used to good effect in the workplace rather than for selection or salary increase purposes. The original focus of the 360-degree feedback approach continues to characterize most of its applications today as well. For instance, Weiss and Kolberg conclude that, "Today, 360-degree feedback has become increasingly popular for managers at all levels of organizations and has become a core tool of professional development" (2003, p. 73).
Indeed, the use of 360-degree feedback is now regarded as an essential element in any leadership development initiative, and its use within organizations is increasing significantly to the extent that it has been described as being one of the most important human resource interventions of the last decade (Storey 2004). This point is also made by Wimer (2004) who advises, "During the past decade, 360-degree feedback has become one of the most popular human resource interventions. The power behind this process is that it's a sometimes rare opportunity for employees to receive honest feedback about how they're perceived by their peers" (37). Although the 360-degree feedback approach is frequently used with executives, it is not restricted to management and the insights gained through such individual evaluations can help virtually anyone become more effective in the workplace. For instance, Wimer notes that in recent years, "Most organizations use it for multisource feedback as part of their management development or performance appraisal processes, or on an ad hoc basis with individuals. The idea is that if employees are armed with better self-awareness, they can make important changes in their work behavior" (Wimer 2004, p. 37).
While the 360-degree feedback approach can be effective in this expanded role, some authorities insist that its use with executives is one of the method's most important functions. According to Green (2002), "Multi-rater or 360-degree feedback is essential for overcoming leader blind spots and enhancing their overall emotional intelligence" (p. 8). In addition, Green reports that the 360-degree feedback approach can also be used to assess the performance of leadership teams. An important point to note is that the weaknesses that are identified through the 360-degree feedback approach are termed "improvement areas" while an individual's strengths are behavioral based and that all survey information from the multiple sources used is collected anonymously (Green 2002).
In some ways, the 360-degree feedback approach relies on the same techniques that are used in other performance appraisal methods such as results-oriented methods (which are discussed further in chapter two below) by making comparisons between what is desired and what is observed. In this regard, Green reports that, "Typically, multi-feedback raters identify leader strengths and developmental gaps by comparing survey statements of what is expected or desired in the leader role, versus their actual perceived behavior in their role. Collectively, the summary feedback is used to identify which behaviors a leader needs to enhance job performance, and which current behaviors should continue as is" (p. 8). It is reasonable to suggest, though, that even the most thoughtful and sensitive feedback will fail to evoke the type of behavioral changes desired unless the entire process is carefully managed and follow up procedures are in place. For instance, Green emphasizes that, "Successful 360-degree feedback is not automatic. The process must be properly positioned, implemented, and followed-up over time" (2002, p. 9). Notwithstanding the increasing attention being paid to the use of multisource evaluation methods such as the 360-degree feedback approach, there remains a paucity of research concerning how effective the technique is in aligning performance with achieving organizational goals (Green 2002), making this study particularly relevant and timely.
Overview of Research
The study used a five-chapter format to achieve the below-stated aims and objectives and to answer the study's guiding research questions. Chapter one of the study introduced the topics under consideration, the background of the research, this overview, the study's aims and objectives, the scope of the study, definitions of key terms used and the study's guiding research questions.
Aims and Objectives
The aims and objectives of the study were to generally assess the effectiveness of the 360 degree appraisal feedback system and to compare and contrast its effectiveness with conventional appraisal systems.
Scope of the Study
The focus of this research will be on the effectiveness of the 360 degree feedback system as it is used in Company XXX.
Terms of Reference
For the purposes of this study, this term generally refers to the periodic evaluation of employee performance.
This term refers to "a strategic and integrated approach of increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors" (Armstrong & Baron 1998, 38).
360 degree feedback
This term refers to a performance appraisal method that collects performance ratings from peers, subordinates, supervisors, and sometimes customers (London 2003).
Key Research Questions
To achieve the above-stated aims and objectives, the study was guided by several research questions as follows:
1. What types of performance appraisal methods are commonly used in organizations today?
2. Should 360 degree feedback be used for performance appraisal or salary increases?
3. How confidential is the process?
4. Is 360-degree feedback given anonymously or face-to-face?
5. Is there a consensus among performance management experts and managers concerning the efficacy of 360-degree feedback?
Discussion of Relevant Literature
This chapter provides a review of the relevant literature concerning the importance of performance appraisals generally, and a discussion of multisource or 360 degree feedback as an appraisal technique. An analysis of the need for confidentiality and the selection of appropriate raters for the 360 degree feedback approach are followed by a brief summary of this chapter. A description of the study's methodology immediately follows in chapter three.
Importance of Performance Appraisals
Employees want and need to know how they are doing on the job so they can build on their strengths and address identified weaknesses, but the performance appraisal process is fraught with opportunities for miscommunication, disappointment, disillusionment and poor morale if it is not handled carefully. As a result, the performance appraisal process is one of the most important methods any type of organization, large or small, can use to better align employee efforts with overarching organizational goals. For instance, Sims (2002) emphasizes that, "Strategically, it is hard to imagine a more important organizational system than performance appraisal" (p. 80). As noted above, truly effective performance appraisal systems provide employees with the timely feedback they need to determine when their performance is aligned with the corporate vision and goals; however, even more importantly, effective performance appraisal systems also provide these firms with the information they require in order to gauge their progress towards achieving organizational goals. For instance, Sims adds that, "Within this context, the evaluation of performance is a control mechanism that provides not only feedback to individuals but also an organizational assessment of how things are progressing" (p. 80).
Because performance information is so important to an organization's survival, it is not surprising that a number of techniques have been developed over the years for this purpose. As a result, there are a number of performance appraisal methods besides the 360- degree feedback that are available, including the following:
1. Trait methods: This approach to performance evaluation is based on the use of graphic rating scales which are considered by many organizations as being an inexpensive performance appraisal method because the same rating scale can be used for virtually all positions within an organization.
2. Behavioral Methods. This approach to evaluating employee performance also uses rating scales; however, the method relies on a consensus among supervisors and organizational experts within the company concerning what behaviors can be regarded as being superior, good, average, and poor performance for a particular position. Generally, raters assign a number on a graphic scale to indicate the employee's level of performance.
3. Results-Oriented Methods. This is a straightforward performance appraisal method that uses quantifiable benchmarks and target objectives and then compares how well employees achieved these goals over a designated period of time. This approach is also known as management-by-objective, and this approach is widely regarded as being a…