Performance Appraisal and 360-Degree Feedback in Healthcare

Introduction to Performance Appraisal

At my last organization, the performance appraisal process was driven primarily by the need to align individual performance with the strategic objectives of the organization. Chandra and Frank (2004) do not identify this as a major stated reason for conducting performance appraisals, yet it is quite common in the business world. Healthcare organizations are, in this country, businesses. They all have strategic missions, and within those missions the different tasks that support the mission and its related objectives are broken down and assigned. That is a fundamental role of any human resource department: to understand what jobs need to be done and to find the right people to do them.

My performance appraisals were generally well-aligned with this perspective. It was not explicitly stated as such, but the appraisal covered a number of significant issues, all relating directly to my job. The job description served as the basis for setting objectives for the half-year period, and I was then evaluated against those objectives. The organization sets performance measures for each position and uses them as the basis for its evaluations. Because the job descriptions themselves are directly tied to the organization's strategic objectives, my performance evaluation was, in effect, linked to those objectives — measuring precisely the ways in which I was expected to contribute to overall strategic performance through my specific role.

Strategic Alignment and Appraisal Objectives

This alignment strikes me as a considerable advantage, for several reasons. The performance objectives on which the appraisal was based were realistic, measurable, and achievable — the key attributes of any effective objective. With hard work, I was able to meet them. My sense that this was an advantage is not rooted simply in having received a positive appraisal, but more in the fact that I knew what to expect, I understood my contribution to the organization's overall strategic performance, and I knew what was required of me. That is the hallmark of a well-run organization and a well-conceived appraisal system.

Chandra and Frank (2004) make the point that performance appraisals are used by healthcare organizations to correct employee performance and stimulate improvement. Had I not been successful, the appraisal would have served as clear evidence of that failure. Even so, the performance appraisal is essentially a means of communicating that expectations have not been met — it is not, by itself, a pathway to correcting behavior. It may be the first step on that pathway, but training is the mechanism by which employees who have fallen short of expectations are actually developed and improved.

Understanding 360-Degree Feedback

A 360-degree evaluation is one in which an employee receives feedback not only from a supervisor but from a range of colleagues and coworkers. I have never personally experienced this type of evaluation in any role I have held.

It is not clear to me that this model offers genuine advantages. In theory, knowing that peers will contribute to one's evaluation is supposed to encourage better collective behavior — orienting employees not only toward individual performance but toward ensuring that individual results do not come at the expense of team outcomes. But this raises a question: is the 360-degree model not simply a crutch for managers who do not know their workers or their workplaces? If a manager is unaware of selfish or counterproductive behavior on the part of an employee, is that manager truly fulfilling their role?

Conclusion: Objectivity as the Standard

360-degree feedback may have some utility in the context of career planning, given that advancement in most organizations carries a political element. This is especially true for leadership positions, where subjective soft skills are genuinely valued. It can be useful for an organization to identify which employees are regarded as informal leaders by their peers, because that is where the leadership pipeline begins. In terms of assessing leadership potential — as distinct from management performance — 360-degree feedback is probably superior to a purely objective appraisal system, particularly in organizations like my own, where the formal appraisal process does not include even an informal discussion about career pathways.

Beyond that narrow application, however, the limitations of 360-degree feedback are substantial. Research on subjective evaluation methods consistently highlights the risks of introducing unstructured, non-expert judgment into high-stakes HR decisions. An objective, data-driven appraisal system — grounded in clearly defined job descriptions tied to organizational strategy and communicated transparently to employees — remains the most defensible and effective approach to performance evaluation.

References

Beehr, T., Ivanitskaya, L., Hansen, C., Erofeev, D., & Gudanowski, D. (2001). Evaluation of 360 degree feedback ratings: Relationships with each other and with performance and selection procedures. Journal of Organizational Behavior, 22(7), 775–788.

Chandra, A., & Frank, Z. (2004). Utilization of performance appraisal systems in health care organizations and improvement strategies for supervisors. The Health Care Manager, 23(1), 25–30.

Jackson, E. (2012). The 7 reasons why 360 degree feedback programs fail. Forbes. Retrieved March 13, 2015, from http://www.forbes.com/sites/ericjackson/2012/08/17/the-7-reasons-why-360-degree-feedback-programs-fail/