These insights are often used by companies in employee training and development, but they can also be used for making administrative decisions around pay and promotions. But there's a great deal of controversy surrounding the implementation of 360 degree feedback.
The good
The results of 360 degree feedback reviews are often viewed as more valuable than traditional top-down appraisals because they rely on many different points of view instead of just one. Traditional performance reviews can be biased based on the reviewer's personal feelings toward the employee. If an employee and his manager don't get along personally, he could have terrible traditional reviews but the negative views of the manager might be the outlier in a review that came from his peers, customers, etc.
The bad
Costs and effort of collecting 360-degree feedback scores can be very high as it will require significant time commitment for scoring, evaluation and feedback. There are few ways of bringing costs down other than simplifying data collection through the use of software and electronic data collection. Another problem that can arise is that because the feedback is anonymous, employees have no way to clarify criticisms or request additional feedback. That's why it's very important to have coaches - HR staff or managers in most cases - trained to help employees understand and interpret their feedback and develop an action plan based on that feedback. Also, it can be helpful, then, to make sure that employees understand that the 360 degree feedback is only one factor of many determining promotions and pay - not the sole determining factor.
The ugly
The biggest problems arise when 360 degree feedback surveys are not conducted properly. For example, confidentiality is the biggest negative factor. To ensure confidentiality: Select a neutral administrator such as an external consultant or human resources representative. Ensure that online systems are encrypting the data and storing the results on a secure server.
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