The Pros and Cons of 360 Reviews

360 feedback (or multi-rater feedback) is one of the fastest-growing and most controversial performance management instruments used today.

When done right, 360s can promote increased self-awareness for individual employees, transparency in team communication, and increased performance within a company.

However, there also exists a host of variables and questionable components to the 360-degree feedback process that have made many organizations question the validity and reliability of the performance tool.

We’ve compiled some opinions that should help to inform your decision if you're considering the addition of 360 feedback to your process.

Arguments Against 360 Reviews

Inexperienced Raters

Many businesses have found that one of the greatest variables and risks to using 360-feedback in performance review systems is the reoccurring issue of inexperienced or subjective raters.

In 2015, Major Gregory G. Lee of the U.S. Army published an article criticizing the reliability and validity of 360-degree feedback programs within the Army due to the blatant subjectivity and unchecked toxic leadership within the multi-rater feedback system. When the leaders, managers, executives, and employees involved in a 360 review are untrained or inexperienced in the practice of giving constructive feedback, not only does the purpose of the system becomes lost, but the feedback itself can cause damage to the organization.

Unreliable Data

Often, especially in large companies, 360 survey participants that are responsible for providing feedback can be on completely different pages when it comes to evaluating the performance, behavior, and competency of the individual being reviewed. 360 surveys were denounced in a 2011 issue of Harvard Business Review for having universally bad data, mostly due to the drastically different standards and expectations of those involved.

In a 360 review system that involves manager, coworker, customer, and even self-assessment feedback, it’s easy to see how data can potentially become skewed. Even well-intended coaching and insightful feedback still comes from individual sets of competency standards, questions, and performance criteria that often differs from evaluator to evaluator. Because complete objectivity in reviews is nearly impossible to achieve, the data gathered in a multirater review is often made unreliable as a result.

Vague Questions

Not only is unreliable data a potential mishap in performance reviews, but many companies often set themselves up for weak feedback systems by creating vague, non-specific questionnaires that make it hard to assess an employee’s actual behavior and performance.

Questionnaires that consist of nothing more than personality profiles make it nearly impossible to translate a review into specific and measurable actions, while overly complex questions can fail to connect the ratee’s performance with the overall values, goals, and strategic aims of the organization.

Focusing on Weaknesses Instead of Strengths

Due to the nature of 360 evaluations, managers and executives are often forced to examine an employee’s weaknesses more closely than their strengths. Many participants in 360 feedback systems have found the process to be more negative and punishing than rewarding due to management’s tendency to seek out and pinpoint an employee’s skill gaps.

Not only that, but many of these questionnaires involve written feedback that is sent out to participants after the review takes place. Written comments can serve to reinforce the emphasis on weaknesses in 360 feedback survey results -- participants are left to briefly skim the list of strengths, and potentially hyper-fixate on their shortcomings and improvement suggestions.

Even with these issues, however, multi-rater assessments are still used by over 90% of Fortune 500 companies. So, what is it about 360 reviews that works?

Arguments for 360 Reviews

Increased Communication and Transparency

Many Fortune 500 companies have discovered, often by a trial-and-error basis, that 360 reviews are the most effective performance review tool for a large organization. Writer and Northwestern University student Nicole Thompson conducted research and found that 360-feedback systems were responsible for increased communication, and as a result, increased productivity and efficiency among teams.

As feedback results are delivered and discussed among team members, communication channels remain open and honest, leading to relationships of trust and transparency. This open communication in a 360 system encourages coworkers and team members to actively seek out constructive feedback from peers, management, and executives, resulting in performance increase and goal achievement.

Increased Self-Awareness

Not only are there benefits to utilizing 360 reviews within a team environment, but the assessment tool can also promote increased self-awareness and a clearer understanding of goals and expectations for individual employees.

With the more open and communicative environment that 360 feedback brings, employees feel as though their opinions are actively sought and heard, and their performances are being directly observed, recognized, and rewarded. Individual employees are able to get a clearer understanding of how their actions and opinions directly affect the company.

Similarly, the ability for an employee to offer constructive feedback to those in management can encourage morale among lower-level employees, allowing them to believe that their words matter and giving them a sense of empowerment.

Progression of Organizational Goals

360 feedback processes that involve the customer are known to be especially valuable in improving the quality, reliability, and promptness of a business’s overall products and services.

In a 2012 issue of the Harvard Business Review, Jack Zenger and Joseph Folkman explain that organizations that do 360 reviews well -- in other words, relying on empirical research to determine leadership competencies, properly and constructively explaining the results of feedback, and tailoring the process to each individual’s job type and position -- see an increase in employee engagement, customer satisfaction, and higher sales.

High-quality 360 feedback ultimately correlates with an organization’s success, revealing and eliminating blind spots while driving accelerated growth for both teams and the overall company.

The question is: are 360 reviews beneficial to every organization? Here are some things to consider before taking steps toward implementing 360 feedback at your company.

Things to Consider Before Adding 360s

Not all leadership development and 360 solutions are created equal. It’s fairly obvious that there are certain conditions that must be met in order to ensure an effective and functioning multi-rater performance assessment system. As you make your decision, it is important to keep in mind that the use of 360-degree feedback tools is not always effective for certain organizations and specific job types.

The companies that make use of 360 reviews have discovered that the multi-rater system enables more accurate, fairer, and less biased feedback, in contrast with traditional or top-down assessments. However, it’s worth noting that many of these companies combine 360 feedback with traditional performance appraisals in order to ensure that all review participants receive the clear direction and developmental feedback that they need to flourish.

No matter what, your biggest concern should be to ensure that 360 reviews are going to work for your company. Customize your 360-degree feedback system according to the needs of your organization, and it just might be the successful tool you need to bolster performance in your business.