360 Degree-Performance Appraisals: Prospects and Pitfalls


Prof. Dileep Kumar M.


Performance appraisal is the process of assessing an employee's performance based on a set of standards. Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development. For any organization to achieve its goals and to sustain its growth in the present competitive world, the performance of each and every individual employee plays a major role. The performance of the employees should assess continuously to make their contribution to higher extend.  The process of measurement of the performance of employees at work is termed as performance appraisal. Performance appraisal has long been regarded as one of the most critical areas of human resource management. The Human Resource Department relies on evaluation results in determining the soundness of much developmental decision, which have direct impact on the business surplus.

What is 360-degree feedback?

360-degree feedback is a full circle system of obtaining information from peers, subordinates, and internal and external customers, about the employee's performance. 360-degree assessment is based on the assessment of an individual's management styles, competencies and behaviour by colleagues horizontally and vertically by involving his boss, peers and direct reports in the organization.

360-degree feedback

Is a multi source assessment, which includes

* Self,
* Supervisor
* Internal Customers/peers/Staffs
* External Customers

Need of 360-degree feedback in organisations

Business is towards surplus generation. Without surplus no organisation can grow. Here the effort to grow the business and the surplus should come from employee part.  The performance of the employees is at work here matters in business development and organisational development. The performance of the employees should then align with the strategic decisions that integrate the business goals in an increasingly competitive environment. It is the responsibility of the Human Resource Management to integrate the culture of the organisation with all available resources to the optimum out put. The 3600 Appraisal helps the HR Department to have better understanding of the competitive advantage and disadvantages of the current manpower resources and tune them towards performance excellence and productivity.  


      * Top Management Support
      * Confidence of employees on the appraisal methodology
      * Objectives need to be measurable with performance requirements clearly stated.
      * A detailed plan of implementation
      * Collaboration between superior and subordinates
      * Some prior experimentation and positive experiences Clear organisational philosophy and policy objectives

Uses for 360 Degree Feedback include:

  • Performance Appraisal
    • o Recognition of performance.
      o Providing feedback on individual performance.
      o Providing a basis for self-evaluation.

  • Assessing Employee Development:
    • o Diagnosing training and career development needs.
      o Providing a basis for promotion, dismissal, job enrichment, job enlargement, job transfer, probation, etc.
      o Monetary and other rewards.

  • Organizational Climate Study:
    • o Organisational environment improvement needs
      o Changes in the Managerial approaches, leadership, etc

  • Customer Satisfaction Study
    • o Employees attitudinal change
      o Customer satisfaction improvements   

How 360-degree feedback system adds value?

360 degree feedback enables an organization to focus on developmental efforts, at the individual and group level, in the present business environment where the success of the company depends on continuous revolution, which is possible through organizational development. 360-degree feedback facilitates the alignment of individual capabilities and behaviors with organizational strategies. It adds value to the organization indifferent ways:-

    • 360-degree feedback provides a better understanding of individuals performance at work
    • 360-degree feedback provides a multifaceted view about the employees from different sources
    • 360-degree feedback provides a better understanding of employed developmental needs
    • 360-degree feedback provides increased the understanding about one's role expectations.
    • 360-degree feedback provides increased the understanding of competence and competency in various roles
    • 360-degree feedback extends better morale to those who perform and contribute well to the organisation
    • 360-degree feedback reduces training costs by identifying common development needs.
    • 360-degree feedback increases the team's ability to contribute to the organizations goals
    • 360-degree feedback helps everyone to work for a common standard and institutionalize performance management.
    • 360-degree feedback ensure better interpersonal relationship and group cohesiveness
    • It promotes self-directed learning and provides a road map for employee's development planning.
    • It promotes better Communication within departments.
    • 360-degree feedback Increases the team's ability to contribute to the organizations goals develop better bottom line through boosting the capability of the organization to meet its objectives.

    Steps may be taken to gauge the readiness of an organization for 360-degree feedback:

    • Identification of the problem.
    • Analysis of the organizational context for finding a solution to the problem.
    • Allocation of resources for the purpose in terms of time and finances.
    • A detailed plan of implementation.
    • Follow up

    Pitfalls of 360-degree feedback

    • A detailed plan of action, which ensure the transparent and clear implementation of appraisal with employee accountability.
    • Effective follow-up is the prime requirement of 360-degree feedback. Failure in follow-up may cause more harm than good.
    • The 360-degree feedback is time consuming and cost consuming assessment process. Without having adequate resource to implement the process, it will end up nowhere and develop financial burden to organisation. 
    • The trust and confidence on the employees who undergo this feedback assessment process is a determinant factor in its outcome. Many consider this appraisal as tool for downsizing.
    • The process involves a lot of paper work.
    • There are high chances of subjectivity from the management and employee part in the feed back assessment.
    • Many times the confidentiality of the appraisal cannot ensure from the HR department.
    • Since the assessment is based on qualitative data many times it cannot ensure unambiguous, clear, specific, and observable and quantifiable formats.


    360-degree feedback is sometimes referred to as multi-rater appraisals, multi-source feedback or 360 degree profiling. It is essentially a process, which enables a person to receive feedback from a number of people around them (see diagram). The purpose of the feedback is usually varied from organisation to organisation. 360-degree feedback not only acts as tool for organisational development but also to help an individual determine areas they need to develop. The success of the appraisal depends on the transparency and clear objectives of its need and its clear cut intimation to the employees even at the bottom level of the organisation.


    1. Aswathappa. (1995), 'Human Resource and Personnel Management', New Delhi.

    2. Niehoff, B.P. Enz, C.A. and Grover,R.A. (1990) " The Impact of Top management Actions of Employee Attitude and perceptions," Group and Organisations Studies,15,(3) P; 337-352.

    3. Macgregor, D. (1972), "An Uneasy Look at Performance Appraisal   Business", Harvard Review, September/October, pp. 133-138.

    4. Meyer, H.H., Emmanuel, K. and French, R.P.J. (1966), "Split Roles in Performance Appraisal" Harvard Business Review, Vol. 44, No. 3, May,/June, p. 106.

    5. Richarde, E. Kopelman. (1986), 'Objective Feed Back, In Edvin A Locke, Generalizing From Laboratory To Field Setting', Lexington Books, Lexington, Mass. P: 119-145.

Prof. Dileep Kumar M.

Source: E-mail May 17, 2006


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