Performance reviews are a necessary evil in the workplace. The good news is that the one-way, annual performance evaluation where an employee gets to hear about the all things she did wrong over the past year, and maybe a few that she did right, isn't the be all and end all of the review process. The 360 performance review has gained some traction, but it, too, has its limitations ... and detractors.
People like Nancy Clark, founder of Leadership Dynamics, Inc. believe that 360 reviews do more harm than good, whereas people like psychologist Dennis Kravets, founder of Dennis Kravetz Associates, believe that 360 degree reviews have many more benefits than pitfalls.
One of the first, and probably biggest, drawbacks to 360 performance reviews is that in some cases, employees get to choose their raters. It's only natural that people will select co-workers who they believe will give favorable or at least fair assessments, explained Dianne Shaddock Austin, founder of EasySmallBusinessHR.com and author of the e-book How to Supervise: What Your Boss Never Told You Before You Took The Job. A Step-By-Step Guide for New and Seasoned Managers (Taylor Jordan Enterprises, LLC, 2011) in an email interview. Trouble starts when a reviewed employee receives unexpected feedback and speculates about or demands the name of whoever gave it.
Without confidentiality, employers will have a difficult time getting employees to participate in 360 reviews or to give honest assessments. A detached analysis might help, too.
Many people experience an emotional reaction to the feedback, said Rachel Karu, founder of RAE Development. Some are excited while others are defensive and get caught up in trying to determine "who said what." It is best to have a trained coach debrief the 360 to help the employee process his emotions and stay objective.
Lori Dernavich, employee performance advisor and founder of Lori Dernavich, LLC, believes that 360 assessments should be conducted via interviews with raters by an outside consultant, someone who isn't involved in a company's politics and can truly keep information confidential.
Another problem is that a lot of people seem to be confused about the purpose of 360 reviews.
The point of a 360 is to support the recipient through detailed behavioral and actionable feedback, said Yosh Beier, co-founder and managing partner of Collaborative Coaching, LLC, not venting.
Marian Thier, president of Listening Impact disagrees with the idea of using 360 reviews to replace standard performance reviews. 360 assessments are terrific platforms for discussion, future development and feedback. They should not be used to judge, reward, punish or define performance.
If some companies are using 360 reviews instead of standard performance reviews, it might explain why they're conducted once a year. Performance management should be a year-round process, said Morgan Norman, co-founder and CEO of WorkSimple. Many workers want to get feedback in real time, when it's the most valuable, not after the fact.
Like Clark, Andrew Schrage, co-owner of Money Crashers Personal Finance, is opposed to 360 reviews. I think an employee's performance should be judged based on the overall value that he provides. This value can be torpedoed by one disgruntled subordinate or colleague, he said. If you are using a 360 performance review, you need to digest feddback very carefully.
It's important to note that 360 reviews, when done correctly, are useful tools for assessing more than just an individual employee, according to Larry Laswell, founder of Outperform Expectations, LLC. Said Laswell, A 360 evaluation can expose important organizational information that points to team dysfunction, lack of organizational priorities and other communication problems that are valuable to senior management.
Neither annual performance reviews nor 360 reviews are perfect. But the consensus among those interviewed is that when done right:
annual reviews, not replacements.