Companies have attempted to improve employee performance evaluations in the 21st century by expanding feedback to include peers, subordinates, and internal and external customers, along with conventional supervisor evaluations, according to the Business Dictionary definition of 360 degree feedback. This feedback mechanism gets its name from the all-around feedback on competence-based performance. Like any evaluation tool, 360 degree feedback has advantages and disadvantages.
Advantage 1: Organization
According to Star 360 Feedback, "360-degree feedback has the greatest impact when used to evaluate and improve the performance of whole organizations." Companies can use data collected on feedback programs to monitor consistent patterns or areas of weakness for employees within the organization. According to the site, organizations develop more effective training programs by identifying areas of weakness for employees throughout the organization or in specific departments.
Advantage 2: Individual Growth
From an individual perspective, an all-around feedback mechanism helps employees see whether a consistency exists in the way their performance is viewed by more than just the manager. "Individuals receive specific information that allows them to understand how others perceive them," notes Star 360 Feedback.
Some employees are bothered when they feel unfairly critiqued by managers who may often have little direct interaction with them. Hearing feedback directly from colleagues and customers in a safe, anonymous way may help the employee buy into the reality of the information.
Disadvantage 1: Dishonest Feedback
In his "360 Degree Feedback" article on the site Amazing Results, registered psychologist Roland Nagel points out that one commonly noted disadvantage of 360 degree feedback is that employees may not feel comfortable offering honest feedback on supervisors. This same dilemma could exist in employee-to-employee evaluations.
Without an anonymous system, backlash from supervisors or retaliation from colleagues could limit workers' willingness to share true feelings in the feedback process.
Disadvantage 2: Consistent Interpretation
Another major challenge in the 360 degree feedback process cited by Nagel is the reality that "as each rater sees a different behavior, how do we know the basis upon which the ratings are observed?"
Nagel's point is that different employees interact in different ways with the person being reviewed. Subordinates observe different behaviors in a supervisor than that supervisor's same-level colleagues and his managers. Additionally, customers have a different perspective on an employee's behaviors.
While you can gain insight on perceptions of the employee from all around, a consistent interpretation of positive or negative behaviors is challenging.