With so much emphasis on boosting individual, team and organizational performance it is easy to see why the first place many companies look to is their performance appraisal system.
And, with all the positive press out there about the power and flexibility of evolving web-based 360 feedback products it is equally easy to understand why those same companies will try to use one to accomplish the other.
Bad idea.
While the two may work well together they serve two distinctly different aspects of the performance management process. In his original article from Human Resource Executive, author David Lassiter offered the following distinctions and cautions:
Distinctions:
- Performance appraisal is an evaluative process used to determine results. Its purpose is to measure and evaluate contribution to the organization in order to provide feedback and fairly distribute rewards. Performance appraisals drive compensation decisions.
- 360 feedback is a developmental tool used in the employee development process. It is designed to encourage employees to grow and develop by providing feedback on their proficiency in the skills, competencies, behaviors, and practices related to the conduct of their jobs. 360 drives employee development.
Cautions:
- If 360 feedback is linked to compensation decisions, it loses its power and benefit as a developmental tool. When employees recognize that their financial rewards are based on multisource feedback ratings, they quickly see how the new game is played.
- When 360 feedback is used as a performance appraisal tool employees can manipulate the process to ensure the desired outcome. The ‘ratee’ can be helped or hurt. Putting two and two together, employees realize that “if you scratch my back, I’ll scratch yours.”
- Skewed and unreliable data from raters who, consciously or otherwise, shade their responses to protect or punish the ratee.
- Increased cynicism from employees who know the system is being gamed. This can lead to mistrust and fear of co-workers, lack of cooperation, infighting, and unhealthy competition.
- Job proficiency levels stay relatively flat or even decline because the “360 appraisal” is not taken seriously. What is important is the size of the increase or bonus. The numbers needed for a “good” appraisal can be informally fixed by silent agreement among raters (on a 1-5 scale, for example, nobody gets below a “3″)
- Individual development plans become window dressing. People may go through the motions to create them but expend little effort in implementation. When not held accountable by their peers, performance levels off.
- Supervisors “use it on” an employee they are afraid to confront with only their personal observation, evaluation and judgement. This can result in defensiveness, denial, conflict, accusations, and loss of trust. It puts the relationships within the work group in jeopardy as well, and can lead to an expanded reduction in productivity and performance.
- The work environment becomes politicized, candor and honesty are seriously compromised, trust and integrity are damaged, risks are avoided, motivation diminishes, turnover increases.
- 360 feedback will be declared the management fad du jour. Large investments of time, energy, money, and credibility will be lost.
Summary
Performance appraisal is an evaluative process for defining goals, and measuring results and contribution. 360 feedback is a developmental tool for identifying, measuring, and improving the skills, competencies, behaviors, and practices needed to perform the job. They can, and do, complement each other, but they have distinctly different purposes.
From David Lassiter’s original article titled “Feeding the Masses,” Human Resource Executive. Copyright © 1997. Adapted with permission. This article may be reproduced for internal educational purposes only. Embodiment of this material in products or resale in any form is strictly prohibited.
