Research is shining new light on the best ways to help employees improve their performance and grow personally and professionally. In an article that appeared in the Harvard Business Review last April, Deloitte, a company of 65,000 employees, described how they are completely redesigning their performance management system and among other things scrapping their 360s. In a public survey, they found that 58% of executives “believe that their current performance management approach drives neither employee engagement nor high performance.” In a new report entitled Reengineering Performance Management, Dr. David Rock, Beth Jones & Camille Inge of the NeuroLeadership Institute note that between 50 and 70 large companies have abolished ratings-centric performance management (PM) just in the past few years.
We are reaching yet a new turning point in the way companies work with their people to stay competitive in the marketplace and retain the best and brightest. Considering that the people who know best about the impact of a supervisor’s behavior on employee performance are most often their direct reports, 360 feedback emerged in the 90’s as a valuable new development tool to help organizations shift away from traditional downward-only feedback. That was a big turning point at the time. Surveys were showing that 90% of employees and managers alike disapproved of their performance appraisal systems which were mostly based on a once-a-year review with your boss.
The next shift was to ongoing “Performance Management” acknowledging that helping employees improve required numerous check-ins throughout the year. Still new research on strength-based leadership, in my opinion, led the way towards a third shift to “Talent Development” where a much greater emphasis is placed on developing an employee’s strengths and potential for growth rather than their faults.
Where does 360 fit into a new system based on real-time, robust conversations led by leaders skilled at helping employees grow?
There have always been two schools of thought on 360. At Team New England, we stand firmly in the one that sees 360 feedback as a development tool only. We use 360 extensively in our leadership development programs because so many leaders find the information extremely valuable. The other school of thought is that 360s can also be a useful part of performance appraisal – a system on which decisions around promotions, raises, and even terminations are made.
Surprising to some, studies have shown that assessing a person’s skills based on a numerical rating system reveals more about the rater than the ratee! In a study involving 4,492 managers conducted by Michael Mount, Steven Scullen, and Maynard Goff in the Journal of Applied Psychology (Jan 2000), 62% of the variance in the ratings could be accounted for by individual raters’ peculiarities of perception where actual performance accounted for only 21% of the variance. For this reason, we have always encouraged clients to keep the number of rated items to a minimum and place a much greater emphasis on narrative comments about what a leader does well and how they can improve. Having read and helped leaders process thousands of written comments from colleagues, it is clear that more than 95% of the comments are honest, accurate feedback based on the respondent’s perception of the leader.
Clearly, online 360s will remain a valuable developmental tool for gathering feedback.
A well-designed 360 helps a leader identify where they need to grow and better understand the impact of their leadership style and behaviors on others.
Here are my suggestions for using 360 effectively:
Keep it short and to the point
Include 4-5 relevant open-ended questions designed to help the leader grow based on their strengths and skills, on the positive impact they have on the rater, and on new areas for personal growth. Include up to 10-15 rated items based on your organization’s core leadership competencies. 360s with more than 25 rated items and little opportunity for heart-felt comments can waste valuable employee time and money.
Assess impact on the rater
Always provide an opportunity for narrative comments on any item with a rating scale. Phrase these items in such a way as to illuminate the leader’s impact on the rater rather than assess the performance of the ratee. For example:
“Listens in a genuine way that encourages me to talk, share opinions, and develop my ideas.”
“Encourages me to think creatively and suggest innovative ideas to improve our team performance.”
Build in one-on-one coaching sessions
The most important benefit of 360 assessments has always been the “aha” moments that generate new insights and set the stage for behavioral change. Simply reading the results will not guarantee that a leader will act on this new information. That’s why anyone receiving a 360 report should engage in a sit down meeting with his/her manager and/or an internal or external coach to help them begin the process of fully understanding the report and thinking through their next steps towards becoming a more effective leader.