4 Reasons Why 360 Feedback Surveys Should Not be Used for Performance Assessments Part 2

In a previous post we looked at four reasons why you shouldn’t use 360 degree feedback for performance assessments. We wanted to revisit this topic to look more closely at why using 360 for appraisal is a danger to the feedback process.

360 degree feedback reviews and performance appraisals are two different evaluative processes with different purposes and outcomes. 360 degree feedback is a development tool designed to identify an employee’s skills, competencies and behaviours for the purposes of continuous improvement. Performance appraisals are used to measure an employee’s contribution and productivity to determine salary increases, bonuses or other rewards.

When 360 degree feedback is used for appraisal the integrity of the process becomes compromised. With the trust eroded, 360 feedback becomes ineffectual as a development tool. In today’s post we will explore some of the pitfalls of using 360 feedback to measure and reward employee performance.

1. Rater issues:

   Using multiple raters in 360 feedback is beneficial. However, using multi-raters for appraisal opens up a number of issues as the integrity of the feedback is compromised.

   • The raters involved (other than the manager) may not be able to accurately appraise the employee’s performance.
   • Raters may give dishonest answers to control the future salary of the individual being assessed. They may give low ratings to reduce compensation for individuals they do not like or give higher ratings that result in salary increases for friends.
   • Rater anonymity may be compromised. When the feedback results in financial rewards or repercussions there is a greater incentive to find out who the raters are. In some cases, employees will go to great lengths by filing Federal Privacy Act requests to discover sources (Ghorpade 2000).
2. Increased liability:

   According to David Lassiter (1997), companies that use 360 degree feedback to measure employee performance are opening themselves up to increased liability. As 360 degree feedback systems were created for development purposes, they may not be able to accurately evaluate the different aspects of job performance. The results may then be unreliable as an inappropriate tool was used to measure employee performance.

3. Employee resistance:

   If 360 degree feedback is used for appraisal and compensation it will be met with employee resistance. When 360 feedback is used for development it motivates and engages employees. In that approach, the individual’s personal and professional development in under their control. When 360 is used for appraisal purposes, it is met with suspicion and mistrust. It is difficult to get employees motivated in a process that is tied to their salary or job security.

4. Decreased performance:

   An ironic outcome of using 360 degree feedback for appraisal is that it can lead to decreased performance. When the process is tied to compensation and it encounters the above issues it can lead to a strong sense of mistrust within the organization. Mistrust of the appraisal process, the raters and the company as a whole can lead to disengagement and de-motivation.

Where 360 degree feedback and performance appraisal do complement each other, it is best to keep the processes separate. One reason for this is that it is difficult to coach and evaluate an employee at the same time. Unfortunately in many cases the appraisal tends to always outweigh the developmental aspect.