Incentive Rewards: 360 Degree Feedback System - Term Paper Example

Client’s 27 November 2009 360 Degree Feedback System The 360 Degree Feedback system is directly related to the performance management system. It can have good as well have bad effects on an employee’s performance and his morale. This system acts as a tool with the help of which an employee gets feedback on his performance. The feedback is collected from the supervisors as well as the peer members working with the employee. This tool is also used when it comes to self assessment of an employee. “360 degree feedback allows each individual to understand how their effectiveness as an employee, co-worker, or staff member is viewed by others. The most effective 360 degree feedback processes provide feedback that is based on behaviors that other employees can see."1 The feedback provided when this feedback system is made use of, gives an exact position of an employee. For instance, the feedback shows a picture of whether an employee is able to meet the expectations of a customer or not, this feedback is extremely important to accomplish the mission of the organization. The most important aim of this system is to make the employees aware of their strengths and weaknesses. Pros and cons of 360 degree feedback system “When done properly, 360 is highly effective as a development tool. The feedback process gives people an opportunity to provide anonymous feedback to a coworker that they might otherwise be uncomfortable giving. Feedback recipients gain insight into how others perceive them and have an opportunity to adjust behaviors and develop skills that will enable them to excel at their jobs.” 2 The 360 degree feedback system is instrumental in individual development plans. It works in favor of employees and aims at their individual growth and development, also ensuring the growth of the organization. The system provides an in depth analysis of the annual performance reviews, this is extremely important for any organization because unless an organization reviews its employees’ performance, it cannot grow and prosper. An overall feedback is aimed at when this method is employed, this ensures a good understanding of what is expected from an employee. The system does not provide any scope for deviance and this is exactly what makes it a really effective. This system is imperative in making employees work as a unit. Working together in an organization is extremely important and the system ensures just that. “360 degree feedback is one of the best methods for understanding personal and organizational developmental needs. For many reasons, organizations are no longer responsible for developing the careers of their employees, if they ever were. Multirater feedback can provide excellent information to an individual about what she needs to do to enhance her career.”3 The 360 feedback system is also accurate in providing data analysis of the performance of employees, besides; it also ensures personal and career development. One of the most important aspects of using this system is that it provides no scope of discrimination in an organization, which otherwise is an extremely big problem for some organizations. The system simply avoids discrimination because feedback of an employee comes from a number of individuals which also shows their readiness to give feedback. There are quite a few flaws in the system as well. Firstly, it is ought to fail if it is just an add on in the organization. It must be the supporter of an organization’s directions and fundamentals. It must be made functional keeping the goals of an organization in sight, else it will inevitably result in failure. Another big con of this system is the insufficient information provided by it. An employee receiving unclear comments has no one to go and clarify. Another big problem with this system is that it focuses upon the negatives and the weaknesses of the employees and this can be very negative for both, the employee, as well as the organization. “In addition to the insufficient training organizations provide both people receiving feedback and people providing feedback, there are numerous ways raters go wrong. They may inflate ratings to make an employee look good. They may deflate ratings to make an individual look bad. They may informally band together to make the system artificially inflate everyone’s performance. Checks and balances must prevent these pitfalls.” 4 Pay for Performance Incentive Pay or Pay for Performance is given for specific performance results rather than the time worked by an employee. It is beneficial for both, the employees, as well as the organization because an incentive increases motivation of employees to work harder and to achieve the goals of the organization and when more and more employees work towards the goals of the organization, both, the employees as well as the organization inevitably grow and prosper. Incentives can give a much deserved boost to an employee, results of which, is usually seen in quick time this also strengthens the relationship of an employee and boss, the same also contributes in achieving the goals of the organization. “The simplicity inherent in the casual incentive approach attracts many farmers who would not consider a structured incentive. Casual rewards include a pat on the back, a sincere thank-you, a $50 bill, a dinner for two at a local restaurant, or a pair of tickets to the rodeo (workers may have excellent suggestions along these lines). You may want to entitle workers to choose from a menu of several rewards.”5 There are many types of incentives all meant to boost the performance of an employee. For instance, typical incentives include profit sharing, bonus for reducing production cost etc. Safety incentives include training the workers, forming a safety committee in an organization etc. Each incentive is meant for a special purpose and if made use of, it can work wonders for the organization. “What better way to drive people to work harder and more efficiently, you may ask, than to offer them a special carrot: more money for hitting specific company targets? The idea seems perfect. Managers want their employees to pull out the stops on Project X, for example. Employees, confident of their ability to reach if not surpass the goals, start banking on the extra money.”6 Managers employ this method to attract the employees to work harder and to achieve the organizational goals, however, this system produced horrifying results when implemented by HP. The first 6 months were really enjoyable for all the employees as well as the managers but when the managers moved the target a little on the higher side the negative impact of this system was exposed. The frustration of all the employees was there in front of everyone to see. They could not meet the target as a result of which there were no incentives. This goes to show that this system can be a failure if the managers become too ambitious or set unrealistic goals. “Pay for performance is a growing phenomenon, according to a Hewitt Associates study that found employee pay raises inching up an average of 3.8 percent in 2008, maintaining the tepid growth of the last few years. Bonuses based on performance, meanwhile, were set to hit a record high this year of 12 percent, as a percentage of payroll, up from 8.8 percent in 2003. Ninety percent of companies offer at least one broad-based variable pay plan, Hewitt found, up from 80 percent in 2006 and 51 percent in 1991.”7 References “Incentive Pay” University of California Pay for Performance, Entrepreneur http://www.entrepreneur.com/magazine/entrepreneur/2008/november/198112.html “Pay for Performance Does not always pay off” Working Knowledge Susan M. Heathfield “ 360 Degree Feedback” The Good, the bad and the Ugly http://humanresources.about.com/od/360feedback/a/360feedback_3.htm Susan M. Heathfield “ 360 Degree Feedback” The Good, the bad and the Ugly http://humanresources.about.com/od/360feedback/a/360feedback_2.htm Susan M. Heathfield “ 360 Degree Feedback” The Good, the bad and the Ugly http://humanresources.about.com/od/360feedback/a/360feedback.htm What is 360 Degree Feedback?” Complete 360 Degree Feedback http://www.custominsight.com/360-degree-feedback/what-is-360-degree-feedback.asp Read More