<i>Dear Workforce</i> When Should Organizations Use 360-Degree Feedback
April 13, 2010
In a company of five people, it does not make sense to do 360-degree performance appraisals. In this environment there is a strong likelihood that feedback will not be confidential, based upon the responses. Companies with more than 500 employees would be a decent place to start thinking about 360-degree feedback. In this case, size does matter.
There is no ideal number. However, if you have at least 10 people in a supervisory role, it may make sense to use 360-degree feedback. The implication is that you will have lots of people to manage and lots of feedback to get.
I would not recommend doing 360-degree performance appraisals for a supervisor with fewer than five employees. It's too easy for supervisors to figure out who said what, therefore undermining the process. Teams with fewer employees also are likely to be closer and talk among themselves. Instead of standardizing the process, ask people one on one for feedback. It will go a long way and it's what good managers do.
If supervisors go though a 360-degree performance appraisal process, and are on a witch hunt to find out who said what, then it will not go well. Supervisors themselves need to be open and honest for the system to produce constructive criticism. Those who are resistant to the feedback are likely not the right people anyway, so it's about time they were shown the door.
It's important that the feedback be used in conjunction with strategic business goals that your supervisors already have. Tie the feedback to goals and you'll get a winning process. Tie the feedback to “this person is a bad person” and you'll find yourself in the last seat on the bus to nowhere.
It makes a difference if your company is unionized or nonunion. In a union environment, you will need to consider a host of legal issues before making any management decisions that affect people. If yours is a nonunion environment, then it's probably riper for 360-degree appraisals because folks will be more inclined to give their honest opinion, rather than blast a supervisor out of the water because he docked someone's pay for showing up late 10 weeks in a row.
No matter how many times you say that something is confidential, there will always be a contingent of folks who don't believe confidentiality will be maintained. If the system is launched internally, not using an external expert, then it will be more open to the criticism of being non-confidential. If an outside expert is used, this will decrease the likelihood of folks thinking their name will show up on your “Big Red List of People We Want to Fire Today.”