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360 Apprisal Process

In: Business and Management

Submitted By gane009
Words 2631
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apprisalMeaning of 360 Degree Appraisal

An appraisal made by top management, immediate superior, peers, subordinates, self and customers is called 360 Degree Appraisal. Here, the performance of the employee or manager is evaluated by six parties, including himself. So, he gets a feedback of his performance from everyone around him. This method is very reliable because evaluation is done by many different parties. These parties are in the best position to evaluate the employee or manager because they are continuously interacting and working with him. This method is mostly used to evaluate the performance of the employees. However, it is also used to evaluate other qualities such as talents, behaviour, values, ethical standards, tempers, loyalty, etc.
360 degree appraisal was first developed by General Electric (GE), USA in 1992. Today it is used by all major organisations. In India, it is used by Crompton Greaves, Wipro, Infosys, Reliance Industries, etc.

Six Parties In 360 Degree Appraisal

The six parties involved in 360 degree appraisal are :-

1. Top Management

The top management normally evaluates the middle level managers. However, in a small organisation, they also evaluate the performance of the lower level managers and senior employees.

2. Immediate Superior

The immediate superior is in a very good position to evaluate the performance of his subordinates. This is because they have direct and accurate information about the work performance of their subordinates.

3. Peers / Co-workers

Peer or colleagues also evaluate each other's performance. They work continuously with each other, and they know each other's performance. Peer evaluation is used mostly in cases where team work is important.

4. Subordinates

The Subordinates can also evaluate the performance of his superior. Now-a-days students are asked to evaluate the performance of their teachers.

5. Self Appraisal

In the self-appraisal, a person evaluates his own performance. He should be honest while evaluating himself. This results in self-development.

6. Customers

Customers can also evaluate the performance of the employees who interacts with them. This evaluation is best because it is objective. It is also given a lot of importance because the customer is the most important person for the business. Organisations use customer appraisals to improve the strengths and remove the weaknesses of their employees.
In addition to these six parties, appraisal can also be done by an Appraisal Panel. This panel consists of 5 to 6 different types of members. Outside Consultants are also used for conducting appraisals. In some cases, Personnel Department also conducts an appraisal of employees and managers.
360 Degree Appraisal is becoming more popular because many parties are available for evaluation. Therefore, there is no "bias" or "halo effect". Hence the evaluation will become more realistic.

Advantages :
360-degree feedback is a very effective tool if it is used properly. There are many advantages associated with this system of appraisal.
- Assessment by one person may be biased or influenced by various other factors. But 360 degree appraisal is more transparent and hence highly acceptable by the employees.
- Employees get multiple inputs about their performance. It enables employee to identify their areas of strengths and weaknesses and work on those areas.
- It support the today’s work culture of participation, learning, quality, team spirit, competency based performance, leadership culture etc.
- It provides the benefits of traditional appraisal system like promotion, reward, performance development etc.

Steps for Implementation:
If any organization wants to introduce 360-degree of performance appraisal, there are some steps to be followed:
- Design a system i.e. companies already using 360-degree are a useful reference point. Companies like Motorola, Nokia, GE, NIIT, Wipro are effectively conducting 360 degree appraisal. So experience of these companies with the appraisal methods can be used as case studies for the companies want to incorporate this method.
- Employee needs to be trained before implementing this method.
- When it is decided on a system, pilot it with a few people to make sure it does woke as expected.
- If the pilot test is successful, launch it via a seminar or workshop preferably including role-plays and/or practical demonstration.
- Appraisal process is to be printed and published in the form of booklet/guide as additional reference material for the employees along with the training.
- Establish review and monitoring responsibility.
- There are some commonly associated issues with 360-degree feedback like trust is a paramount issue for which company need to bring in 360-degree feedback. Integrity is another major issue as CEO and senior management also get their feed back as assessed by the subordinates. Employees need to be honest and judicious in their assessment.

Pr-requisites before introducing 360 degree feedback :

There are some pre-requisites before introducing 360-degree feedback in the organisation:
(i) The willingness of the top management to develop the competency of the employees on a continuous basis.
(ii) The belief in principle to learn from each other’s mistake is an important pre-requisite.
(iii) The top management and senior mangers conduct their performance review and counseling sessions regularly.
(iv) The top management is willing to be assessed by their subordinates and colleagues.
(v) Participative culture without any ego-problems is highly congenial for this appraisal method.
(vi) People take feedback supportively and use it for development.
(vii) There are not too much politics in the organization.
(viii) There is a good degree of teamwork in the organisation.
(ix) Employees have faith and confidence on the credibility of the HRD department and it plays major role in consolidation and presentation of the feedback.
(x) Employees are interested to learn about their mistakes and improve upon them.

Issues associated with 360-degree feedback:

- Trust: It is a paramount issue for which 360-degree feedback is required to be brought-in. The level of threat has to be reduced that senior managers are likely to face otherwise the process is not going to work over a period of time. Therefore, organization cannot introduce it straight way, it requires a lot of trust and preparation in the organization. Generally, organization faces lots of resistance to introduce it. In traditional companies there is a lot of apprehension on getting feedback from subordinates and on a 360-degree basis from al around.

- Integrity: It is another major issue. How the subordinates are going to give feedback about their seniors? Whether CEOs able to deliver as per the expectation or not? Questions on effective leadership and unethical practices will also emerge.

Results of 360-degree feedback
- Improved Individual Behaviour: Research has shown that it results in improvement of individual behaviour. But research is still going on to identify the linkages between 360-degree feedback and behavioral changes.

- Greater Awareness of other’s expectations: Research results show that it can change an individual’s self-ratings based on an understanding of the expectations from him by others.
- Individual and Organisational Learning: It can help the individuals in learning how to learn the self-renewing and improvement skills by using the appraisal data.

A recent example:
Maruti’s Chief General Manager (HR) Mr. S.Y. Siddiqui says :We are starting the 360-degree feedback process with employees in the top management such as chief general managers and general managers, whose performance will now be assessed based on feedback from their peers and junior management employees within the same department. Till last year, their performance was being appraised only by the Directors and the Managing Director.

At the beginning of this year, The Maruti has introduced a unique 360-degree feedback system. The system has been co-developed with Ernst & Young. Under this system, the employee is rated not just by his superiors, but also by his peers and subordinates.

Ernst & Young, in consultation with Maruti, has listed a set of leadership competencies that are expected in a general manager. Based on tat, it has prepared a questionnaire to which peers and subordinates can respond online.

The initiative was unveiled with an e-mail by Maruti’s former MD, Mr. Jagdish Khattar, asking people to support the online questionnaire process. The 360-degree feedback system will also include a self-appraisal by the general manager. At the end of the process, he can compare his self-appraisal with the assessment of his subordinates and peer. This has boosted the morale of the employees and also empowered the subordinate in decision making.

The Use Of A 360-Degree Feedback At Nokia Telecommunications:

In a recent study of performance management, Nokia Telecommunications was the entity solely studied on this subject matter. The study identified five main expatiate groups working abroad for Nokia:
1. Top managers
2. Middle Managers
3. Business Establishers
4. Customer Project Employees
5. R&D project personnel

There are at least five differences and issues between the expatriate groups on assignment. The first issue deals with how goals should be set and by who. The second issue is how and who should conduct evaluations of expatriates. The third is that it was unknown if the expatriates were trained or should have the opportunity to attend any training on assignment. The fourth is that it was unknown if expatriates agreed on plans for any type of development. Project Managers failed to recognize many expatriates lack different levels of knowledge and motivation that the host company requires for success.

Top expatriates managers face distant performance evaluations from superiors based in Finland or any other but the host country. These distant evaluations are deemed inaccurate and biased at best. Middle managers face listening challenges and take orders from superiors who are based in headquarters in Finland. Business establisher expatriates only have one directive; ie leaving Finland to the host, “Acquire new customers - Period.” The Business establisher expatriates face few performance goals, which makes it impossible to measure their success on assignment. The Customer Project expatriate’s assignment involves a three-phase project, which is a more intensive assignment than any of the others. Incredibly, they have no agreed performance goals and only work on expectations coming from the local Manager. Research and Development expatriates work closely with their managers and get the brunt of the work accomplished at a faster pace. However their set goals are vast and generalized, which makes it almost unquantifiable. The Training for Research and Development expatriates would never be part of any training or be offered any training while they were on assignment.
In the case of Nokia Telecommunication, it is obvious that the lack of comprehensive and effective cross-cultural training for the expatriate managers is hurting the organization.

In order for Nokia to improve their performance, it becomes essential for the expatriate cultural training to be tailored to each country’s culture and even subcultures (e.g. social vs. business). More attention has to be given not only to the design and content of the expatriate training, but also the neglected evaluation of this training and the development of interpersonal and management skills, as well as efficacy building and leadership effectiveness . The use of a multi-source (360-degree) feedback would provide Nokia with a way to both evaluate the learning, behavioral change and performance improvement outcomes of the expatriate training. Furthermore, this would provide them a way to develop expatriates while in their assignments to make them more effective employees.

The stated alternative is for Nokia Telecommunications to use the 360-degree feedback approach that draws its conceptual roots from several different areas. One is the traditional organizational development technique of using surveys to assess employees’ perceptions. These surveys measure items, such as satisfaction with management, supervisors, pay, work procedures, and formal policies of the organization. The survey information is then fed back to those who generated it, with the goal of developing an action plan to improve the organization. In the traditional organization development literature, this survey feedback technique has been well received. Another area in which 360-degree feedback has strong conceptual roots is in the performance appraisal literature. This can assist in the appraisal process for Nokia communication’s expatriates. Again, today's business climate has forced organizations to provide more information than that of the traditional performance review, thus spawning such creative efforts as 360-degree feedback. It is now recognized that managers can improve their performance through increased information.

Social cognitive theory theory states that humans have the ability to assess their own capabilities and skills and that they often evaluate themselves quite differently than others do. Therefore, the 360-degree process provides managers with an external source of information designed to increase their self-awareness. This enhanced self-awareness may improve managerial effectiveness by providing individuals with another source of outside information regarding what others expect of him/her. This seems particularly important in helping develop the Nokia expatriate managers who may not be clear as to what locals expect of them in their culture.

Though 360-degree feedback is an effective mechanism for individual growth development and learning, its effectiveness in that regard will depend upon the attention paid to factors like purpose, questionnaire design, preparedness of raters, ratees, organisation etc.It is a powerful development method. It is highly transparent and widely accepted by the employees. It empowers the employees. It encourages participation. It is only effective if top management exercises it without any bias and feels free to be assessed by sub-ordinate. Success stories of NOKIA, Wipro, NIIT, GE etc. in implementing 360 degree appraisal has motivated other companies to give fresh look towards it.

The Future of 360-degree Feedback

360-degree feedback systems are seen as a catalyst for increasing organisational performance and efficiency as feedback from others is considered a highly powerful motivator for behavioural change. With continual innovations in 360-degree processes and software technology, systems will be created which are more user friendly, morwidely available and more fair, accurate and valid. 360-degree feedback will continue to become a better process for collecting information and applying it. Intelligence will therefore be integrated into 360-degree systems in order to make them faster, easier and better. Thus, 360-degree systems will not only provide important feedback to individuals but also suggest better ways to improve performance.
The conclusion is that 360-degree feedback is useful for developmental purposes as it is helpful to be able to view one’s own performance from the perspective of several groups. However, when a decision is to be made, such as evaluating a developmental activity or making an administrative decision (such as pay or promotion), the research offers only contradictory evidence. 360-degree feedback seems best used for voluntary individual developmental purposes.
Several trends give some indication of the future of 360-degree feedback. These trends include ● A move from centralized scoring services to web-based assessment * A move from standardized, off-the-shelf instruments to assessments that are customized online for specific organizations * A move from using 360-degree feedback only with upper- and middle-level management to use with all levels of employees * A move from presenting only quantitative assessment data to also including written comments * A belief that 360 feedback can do more than develop leaders and that it can have a positive trickle-down effect on the entire organization

List of references :,or.r_gc.r_pw.r_qf.&fp=3629cfa7653d2d52&biw=1366&bih=665

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