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.

To promote career planning is something Chandra and Frank (2004) also mention as a purpose of performance appraisal, yet this did not feature in my own experience. It could have. At the very least, a performance evaluation provides a venue for supervisors to speak directly with their employees — a genuine opportunity for a conversation about career paths. If such a conversation was possible at the conclusion of the appraisal, it did not happen. That discussion would not have been part of the formal appraisal itself, which was based almost entirely on numeric, measurable performance, but an informal conversation about career options informed by the appraisal results is, in my view, one area where the organization could meaningfully improve the process.

Understanding 360-Degree Feedback

There are significant conceptual disadvantages to the 360-degree feedback model. First, it resembles a Prisoner's Dilemma. Colleagues may choose to avoid negative comments in order to preserve relationships, making the feedback less than honest; or, as in the classic Dilemma, they may collectively turn on one another. A more fundamental problem is that feedback is being provided by people who are not trained in evaluation and who may not understand the employee's job specifications. This opens the process to an enormous amount of subjective information, inaccurate assessments, and irrelevant noise. The resulting evaluation may have little to do with the employee's actual performance against the objectives set out in their job description (Jackson, 2012). Conceptually, 360-degree feedback is nearly the antithesis of a well-designed appraisal system. At its very best, it replicates what a professional feedback system would already deliver — without offering any additional upside — while introducing substantial new risks to the process.

There are no meaningful advantages to 360-degree feedback compared with feedback from a competent, trained supervisor. One might argue that 360 feedback is preferable to an incompetent supervisor who does not know their employees well enough to evaluate them effectively — but justifying 360 feedback by comparing it to a poor manager is simply lowering the bar for an already fundamentally flawed mechanism.

Conclusion: Objectivity as the Standard

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/