360 Degree Appraisal

What 360 degree appraisal is

360 degree appraisal, also called 360 degree feedback, is an appraisal that gathers observations on an employee’s performance from several angles instead of a single one. The angles are the direct manager, the employee’s colleagues, the people the employee supervises where there are any, the employee themselves and, where they are included, internal customers: the other departments inside the organisation that receive the employee’s work.

The name comes from the full circle. A turn of 360 degrees means that the employee is seen from every side of the people around them, and not only from the position of the person they report to.

Each of those angles also has a name when it is used separately. Asking colleagues at the same level about an employee is peer appraisal. Asking the people a manager supervises about that manager’s supervision is subordinate appraisal, in which the source stands alone. The employee’s account of their own performance is self assessment. In 360 degree appraisal each of these is one source among several, and the observations from all of them are gathered about the same employee.

Why 360 degree appraisal draws on several angles

The reason is that a manager sees only what takes place in front of them. Three things in particular fall outside that view, and none of them shows in an individual appraisal written from one side alone:

• Conduct with colleagues. It is how the employee deals with the people who work alongside them, and the colleagues named in the definition are the source placed to describe it.
• Dealings with those below them. It is how the employee treats the people who report to them, which the people supervised can describe wherever the employee supervises anybody.
• Reliability in handing work to other departments. It is whether what the employee owes another department reaches it as agreed, and the departments receiving that work, the internal customers in the definition, are the ones in a position to describe it.

Each of these three is observed from a position other than the manager’s. An appraisal that relies on the manager alone therefore leaves them out, because the manager does not stand where they take place.

Where 360 degree appraisal is used, and where it is not

Whether the instrument helps depends on what its result is used for. There is a use to which it is suited, and a use to which it is not suited on its own:

• Suited to development. Its result can uncover gaps in an employee’s behaviour and skills, and it gives a basis for an improvement plan that addresses those gaps.
• Not suited, on its own, to decisions on promotion or a pay rise. It measures impressions rather than outputs: what the people around the employee perceive of the way they work, rather than what the work produced. Linking it to money can also turn it into an exchange of courtesies, in which raters who know that ratings carry pay give one another high marks.

An exchange of that kind is one form of rater bias, in which a rating reflects something other than the employee’s performance alone. The limit stated above concerns 360 degree appraisal used by itself as the basis for a decision on promotion or pay.

This distinction is what separates a useful instrument from one that can damage relationships within the team. The questions and the raters can be identical in both cases. What differs is whether the result is tied to a development plan or to a decision about money.

The two conditions of 360 degree appraisal

360 degree appraisal depends on two conditions, and each of them has to hold for the observations it gathers to be candid:

1. Confidentiality. The source of each observation is unknown to the employee being appraised. Without that, candour can disappear.
2. Enough raters in each category. Every group of sources, such as the colleagues or the people supervised, needs enough raters for its observations to be pooled without pointing to any one of them. Where the number is small, the employee can work out who wrote each observation, and confidentiality then fails in practice even where it has been announced.

The second condition is therefore what gives the first one effect. Confidentiality that a process of elimination can undo protects nobody, however clearly it was declared.

The condition is also set for each category, not for the total number of raters. A large total does not protect a category in which only a few people answered, since the observations from that category can still be traced to the people who gave them.

How 360 degree appraisal differs from traditional performance appraisal

Traditional performance appraisal measures what the employee achieved against objectives agreed in advance, and its source is the manager. 360 degree appraisal measures how the employee works, and its source is the circle of people around them.

The two also lead to different outcomes. Traditional appraisal is the basis on which an administrative decision is made, whereas 360 degree appraisal is the basis on which a development plan is built. Where several managers rate their own teams in a traditional cycle, the appraisers can meet in a performance calibration session to compare what their ratings mean before those ratings are confirmed.

That difference in outcome rests on what each appraisal measures. A decision on promotion or pay needs a measure of what the work produced, and traditional appraisal provides one, because it sets what the employee achieved against the objectives agreed in advance. 360 degree appraisal measures impressions: what the people around the employee perceive of the way the employee works. Those impressions are the material from which a development plan is built, since the gaps in behaviour and skills that they uncover are the gaps such a plan addresses.

The two appraisals can therefore be held for the same employee, and each records something the other does not. The manager’s appraisal records what the employee achieved. 360 degree appraisal records how the employee went about the work, as seen from every side. What 360 degree appraisal does not do on its own is serve as the basis for a decision on promotion or a pay rise.

This is an explanation of the concept, not legal advice.