360-Degree Feedback System for Performance Management – Concept and Components
Introduction
Appraisals have existed for more than a century now. In 1914, FW Taylor introduced this as a formal procedure to evaluate employee performance to help improve the same over time. However, since then, it has evolved and is still developing.
Efforts have been put in to estimate performance in a fair and unbiased manner. Many techniques have evolved to provide overall performance feedback without neglecting certain areas or emphasizing others. One such employee performance appraisal technique is 360-degree feedback.
What is 360-Degree Appraisal in Performance Management?
The 360 degrees make an entire circle. The word itself means that this is an all-encompassing method of performance appraisal.
In the 360-degree feedback technique, all key people who interact with the employees give their feedback. Thus HR gets overall feedback. It helps to furnish a better and clearer picture of employee performance in different areas of interaction.
Eg: A peer may have a great experience, but subordinates may not have good feedback to share. It helps HR to know that the employee needs to work on the relationship with their juniors and reporters. Some counseling and training for the same can help improve the same.
5 Components of 360-Degree Feedback in Performance Appraisal
The components of this appraisal system refer to the 5 key roles that provide feedback for a single employee.
- Self Appraisal
- Senior or Superior Appraisal
- Junior or Subordinate Appraisal
- Peer Appraisal
- Client Appraisal
1. Self Appraisal
Performance can only improve if the person is willing to put in effort towards the same. And that will happen once the person is aware of the areas of improvement. While the direct line managers will provide feedback to them and let them know about the scope for improvement, it is crucial to discover what is their own perception of self and their performance.
Self-appraisal is the method through which the employee gives feedback on their own performance. An appraisal form with questions and ratings related to different skills and areas of performance is given to the employee. Here, the employee rates itself typically on a scale of 5 or 10. Based on the same, overall performance is measured, and a final score is arrived at.
2. Senior or Superior Appraisal
Superiors can include direct managers as well as peer managers and super bosses. A fair performance review is taken from all key managers who directly deal with the employees frequently.
Managerial feedback is one of the most important components of employee feedback and appraisal because they have assigned tasks to the employees and know the expected outcomes. They can give the closest feedback on task completion and quality of performance.
3. Junior or Subordinate Appraisal
As a manager, an employee needs to get the work done by his team. A manager’s performance, to a great extent, depends on the ability to ensure that the team collectively meets the desired goals and contributes to achieving organizational objectives.
Hence, feedback from the subordinates helps in improving communication and management skills, which is much needed for team management. As a result, it also builds a healthy relationship between the manager and their subordinates. Not to forget, the same manager reviews its team employee performance too. So, it is a two-way communication and review process.
4. Peer Appraisal
It is one of the least important out of all the above. However, it is necessary to ensure smooth interdependence among various teams. In any business, many verticals are dependent on each other to accomplish the broader objective of the company.
Eg: the sales team depends on the leads generated by the marketing team. The finance team interacts with the marketing team on marketing and promotion budgets and with the sales team for revenues. The technical team interacts with the entire staff for their responsibility.
When employees associate with peers, a healthy relationship is pivotal for the success of the company. Hence, interpersonal skills play a key role. 360-degree feedback incorporates various levels of interaction and management that may be involved with peers and prepares a feedback survey to get their rating on different skills and tasks needed.
5. Client Appraisal
Though not practiced for all roles and industries, this form of feedback becomes helpful in companies and domains with high interaction with clients. Companies whose success is directly related to client relationship management give high importance to this feedback mechanism. Many sectors like banking, insurance, and other service industries are highly invested in managing great relationships with their clients.
You must have come across many after-sales services calls where your feedback is taken on your overall experience with the employee that serviced you as well as the product you bought. This component of 360-degree appraisal is most useful for improving the internal processes, and employee knowledge and skills to deal with customers. The main aim of this is to ensure customer satisfaction and happiness.
Conclusion
Not all companies need to conduct 360-degree feedback with all these components. You may leave one or two if it is not relevant to your company size or business sector. However, the best results are seen when the first 4 appraisals are done systematically. And, the advantages of the same are numerous.
To find out more about other ways of employee performance management, please read our blog on different performance management methods and techniques.