Impact of 360 Feedback on Job Performance - Essay Example

Job Performance and 360° Feedback Performance appraisals are important to any manager because they are likely to be asked to evaluate the performance of individual members. Such an evaluation typically will be required as part of the closure process and will then be incorporated in the annual performance appraisal system of the organization. These evaluations constitute a major element of an individual’s personnel file and often form the basis for making decisions about promotions, future job assignments, merit pay increases, and other rewards (Romanoff, 1989).. Organizations vary in the extent to which managers are actively involved in performing the appraisal process. In organizations where projects are managed within a functional organization or functional matrix, the individual’s area manager, not the project manager, is responsible for assessing performance. The area manager may solicit the project manager’s opinion of the individual's performance on a specific project; this will be factored into the individual's overall performance. For example, in a balanced matrix, the project manager and the area manager jointly evaluate an individual's performance. In organizations in which the lion’s share of the individual’s work is project related, the project manager is responsible for appraising individual performance. One new process that appears to be gaining wider acceptance is the multirater appraisal or the “360° feedback,” which involves soliciting feedback concerning team members’ performance from all the people their work affects. This would include not only project and area managers, but also peers, subordinates, and even customers. Multisource feedback has gained prominence after it discarded the traditional superior–subordinate performance feedback process. Multisource feedback refers to ratings that can come from subordinates, peers, supervisors, internal customers, external customers, or others. When feedback comes from all the locations around a person (boss, subordinates, suppliers, customers), it is also called “360° feedback”. The 360° feedback approach gathers behavioral observations from many sources within the organization and includes employee self-assessment. The individual completes the same structured evaluation process that superiors, project team members, peers, and, in many cases, external customers use to evaluate performance. Survey questionnaires, augmented by a few open-ended questions, typically are used to gather information. Then, the summary results are compared against organizational strategies, values, and business objectives. The feedback is communicated to the individual with the assistance of the company’s human resources department or an outside consultant. At present, this technique is used by a growing number of firms including General Electric, AT&T, Mobil Oil, Nabisco, Hewlett-Packard, and Warner-Lambert (O’Reilly, 17 October 1994). Usually, multisource feedback is collected for managers or supervisors, but it could be collected for any employee, with the raters depending on the employee's role in the organization. Multisource ratings are not always collected from all possible sources. For instance, sometimes only upward ratings are collected (i.e., subordinates are asked to rate their supervisor). Multisource ratings are collected through surveys using computer, telephone, in-person interviews, or paper-and-pencil questionnaires. The survey may be administered annually or more often. Multisource feedback is growing in popularity and importance as a method for evaluating employees and providing them with input for development. A 1995 report indicated that all Fortune 500 companies used or were planning to use multisource feedback (London & Smither, 1995). A 1996 paper reported that 25% of companies use some form of upward or multisource feedback survey process (Antonioni, 1996). Four years later, another report indicated that as many as 12% to 29% of all U. S. organizations were using this method (Church, 2000). Clearly, the use of multisource feedback has not diminished, and in all likelihood to succeed has increased. There are several reasons why multisource feedback is such a popular method for evaluating performance. The feedback contributes to individual development by providing information on worthwhile directions for learning and growth. It builds self-awareness, which in turn increases self-reflection and perhaps a greater understanding of others and how they react to you. This, in turn, could prompt managers to think more about the potential consequences of their actions toward others. Managers may feel accountable to respond to others’ ratings of them. When administered over time, the survey results provide a way for managers to track changes in their own performance as they try to react to previous feedback and change their behavior. From an organizational perspective, multisource feedback promotes organizational development by specifying dimensions of managerial behavior that are important to the organization's management. In this way, it clarifies management's performance expectations. It recognizes the complexity of managerial performance, realizing that performance is viewed differently by different constituencies, and that managers need input from these different sources for a comprehensive view of their performance (Tsui & Ohlott, 1988). The supervisor does not have sufficient information or perspective to be the sole reviewer. Supervisors often are reluctant to evaluate subordinates honestly. They want to avoid having to confront the subordinate with negative information (Fried, Tiegs, & Bellamy, 1992). Also, managers may need to behave differently with subordinates, peers, supervisors, and customers. Managers confronting organizational change recognize the importance of being attuned to the changing expectations of multiple constituencies, and they realize that this requires continuous learning. There are several reasons why multisource feedback should be used for development and not for administrative decisions (London, 2001). Because ratings are provided anonymously, raters are less likely to be lenient when they know their ratings will not be used for making decisions about the managers they are rating. Keeping the results confidential promotes the psychological safety, which in turn encourages managers receiving the feedback to be less defensive. When managers are asked to rate themselves, which usually is the case, they are able to compare their self-concepts with the way others see them and to explore the reasons for any differences. Executives may believe that having to base decisions on the results detracts from their own judgment and accountability, essentially reducing their discretion over key personnel decisions. Executives may not be prepared to discuss the feedback results with their subordinate managers. Also, managers may feel uncomfortable talking to their supervisor about how others view their performance, finding the situation threatening and stressful (Dalessio, 1998). It may take time for the organization to develop a culture that supports feedback. Using “360° feedback” data for decisions may prompt defensiveness and decrease the chances for using the data constructively. It may be a cause of dysfunctional relationships, as it might happen if managers avoid feedback discussions or construct rationalizations to save face. This is more likely to happen if the data are used to make decisions about managers who have to explain their However, research has proven that goal orientation did not affect the relations between ratings and reactions or perceived accuracy. Brett and Atwater (2001) suggested that this may be because the “360° feedback” process induces a situational “performance-prove” orientation. That is, the recipients are more concerned about their performance in comparison with others than about developmental aspects of the feedback because of the way the feedback ratings are presented in comparison with others' ratings and with normative results. However, once these situational cues subside, goal orientation may influence perceptions of the value of the feedback. Brett and Atwater (2001) found that after controlling for perceived usefulness immediately after the feedback report was received, learning orientation was related positively to usefulness, whereas performance-prove orientation was not related to usefulness. Moreover, according to Kreitner and Kinicki (2004), employee perception on feedback may be classified into two: negative or positive. Generally, people tend to perceive and recall positive feedback more accurately than they do negative feedback. But feedback with a negative sign (e.g., being told your performance is below average) can also have a positive motivational impact. In fact, in one study, those who were told they were below average on a creativity test subsequently outperformed those who were led to believe their results were above average. The subjects apparently took the negative feedback as a challenge and set and pursued higher goals. Those receiving positive feedback apparently were less motivated to do better. Nonetheless, feedback with a negative sign or threatening content needs to be administered carefully to avoid creating insecurity and defensiveness. Self-efficacy also can be damaged by negative feedback, as discovered in a pair of experiments with business students. The researchers concluded, “To facilitate the development of strong efficacy beliefs, managers should be careful about the provision of negative feedback. Destructive criticism by managers which attributes the cause of poor performance to internal factors reduces both the beliefs of self-efficacy and the self-set goals of recipients.” (Louie, 1999). Aside from being concerned about feedback perception, managers should also maintain consistency. This is because when feedback is inconsistent, people’s fear of negative information may outweigh their satisfaction with the positive information. However, when reevaluating their self-assessment, the ambiguity in the inconsistent feedback provides justification for self-enhancement. Therefore, to avoid biases that may affect reactions to the feedback and later revision of self-image, it is important that people receive consistent information, or at least information that suggests agreement among raters (London, 2003). Performance appraisals generally fulfill two important functions. The first is developmental in nature; the focus is on identifying individual strengths and weaknesses and developing action plans for improving performance. The second is evaluative and involves assessing how well the person has performed in order to determine salary or merit adjustments. These two functions are not compatible. Employees, in their eagerness to find out how much pay they will receive, tend to tune out constructive feedback on how they can improve their performance. Likewise, managers tend to be more concerned with justifying their decision than engaging in a meaningful discussion on how the employee can improve his or her performance. It is difficult to be both a coach and a judge. As a result, several experts on performance appraisal systems recommend that organizations separate performance reviews (which focus on individual improvement) and pay reviews (which allocate the distribution of rewards) (Latham and Wexley, 1994). In some matrix organizations, managers conduct the performance reviews, while area managers are responsible for pay reviews. In other cases, performance reviews are part of the project closure process, and pay reviews are the primary objective of the annual performance appraisal. Other organizations avoid this dilemma by allocating only group rewards for project work. Thus, the problem is not the perception of a negative feedback but how to improve the quality of feedback. Ratings alone may not be very useful. We need to look at the quality of the feedback, for instance, charting changes in performance over time, comparing results with company norms, and evaluating the depth and specificity of narrative comments. DeNisi and Kluger (2000) offered a number of helpful suggestions: 1.) Using 360° feedback for administration focuses attention on the “ought” self, and those who receive negative feedback are likely to feel threatened and stressed by the pressure to change. Many companies start out using 360° feedback for development and then, after several years, begin using it as input for personnel decisions. Changing the rules like this can breed distrust and generate anxiety. 2.) If 360° feedback ratings are to be used for decision making, employees (both raters and ratees) must be informed in advance so they do not feel betrayed. 3.) The feedback recipients should be helped to interpret and react to their results. Workshops, training for supervisors, and external coaches can help managers to digest and use their results 4.) The amount of data presented to employees should not be overdone. The information should be summarized if possible. Some feedback reports include means, ranges, norms (average results across all managers), and past results for each item in the survey. This increases the difficulty of interpreting the results. Recipients will not necessarily focus on what is most important, or they may pick what seems most palatable to them and ignore other results. 5.) Raters should be asked evaluate what they know best depending on their relationship with the ratee as peer, subordinate, or boss. All raters do not have to rate all items. For instance, subordinates can evaluate their manager’s supervisory behaviors, whereas peers can evaluate their colleagues’ cooperation on team efforts. 6.) A strong link to the formal goal setting process must be included. The survey should ask about performance in areas that are important to the organization. For example, company asked managers to input three key goals into an information data base. From this, an online survey was developed so that subordinates, peers, and their supervisor could evaluate them on each one of their specific goals. 7.) The 360° feedback process must be made a regular procedure, whether quarterly, semiannually, or annually. Seeing results over time will help feedback recipients track their improvement. 8.) The effectiveness of the multisource feedback survey process should be assessed to see whether behavior change has occurred and whether performance has improved. The results should be correlated with other performance indexes. The raters and recipients should be asked how they liked the process and what ideas they have for improvement. A recent research by Atwater and Brett (2006) looked into the influence of feedback format (text versus numeric/normative) on leaders’ reactions to 360° feedback received from bosses, direct reports, and peers. They found out that “leaders who received numeric/normative feedback reacted more favorably than those who received text feedback regardless of the source”. These reactions they experienced following feedback became important in the determining their development needs and the recipients used their feedback constructively. No doubt that 360° feedback has a place in the development of managerial skills, especially in today’s team-based organizations. However, it is important to remember that this complex feedback process is only as strong as its various components. According to Coates (1998), “trust is at the core of using 360° feedback” in order to enhance productivity and this determines “how much an individual is willing to contribute for an employer”. However confidentiality should be maintained “for developmental purposes” and to build trust. When this is applied, 360° feedback can also be used as basis to apply pay and personnel decisions. References Antonioni, D. (1996). Designing an Effective 360-degree Appraisal Feedback Process. Organizational Dynamics, 25, 24–38. Atwater, L., & Brett, J. (2006, December). Feedback Format: Does it Influence Manager’s Reactions to Feedback? Journal of Occupational and Organizational Psychology 79(4): 517-523. Church, A. H. (2000). Do Higher Performing Managers Actually Receive Better Ratings? A Validation of Multirater Assessment Methodology. Consulting Psychology Journal: Practice and Research, 52, 99–116. Coates, D.E. (1998, September). Don’t Tie 360 Feedback to Pay, Training, pp 68–78. Dalessio, A. T. (1998). Using Multisource Feedback for Employee Development and Personnel Decisions. In J. W. Smither (Ed.), Performance Appraisal: State of the Art in Practice (pp. 278– 330). San Francisco: Jossey-Bass. DeNisi, A. S., & Kluger, A. N. (2000). Feedback Effectiveness: Can 360-degree Appraisals be Improved. Academy of Management Executive, 14(1): 129–139. Fried, Y., Tiegs, R. B., & Bellamy, A. R. (1992). Personal and Interpersonal Predictors of Supervisors’ Avoidance of Evaluating Subordinates. Journal of Applied Psychology, 77, 462–468. Kreitner, R., & Kinicki, A. (2004). Chapter 10: Improving Job Performance with Feedback, Extrinsic Rewards, and Positive Reinforcement, Organizational Behavior, 6th ed. New York: The McGraw-Hill Companies Latham, G.P., & Wexley, K. N. (1994). Increasing Productivity through Performance Appraisal, 2nd ed., Reading, MA.: Addison-Wesley. London, M. (2001). The Great Debate: Should Multisource Feedback be used for Administration or Development Only? In D. W. Bracken, C. W. Timmreck, & A. H. Church (Eds.), The Handbook of Multisource Feedback: The Comprehensive Resource for Designing and Implementing MSF Processes (pp. 368–385). San Francisco: Jossey-Bass. London, M. (2003). Job Feedback: Giving, Seeking, and Using Feedback for Performance Improvement. Mahwah, NJ: Lawrence Erlbaum Associates. London, M., & Smither, J. W. (1995). Can multisource feedback change self-awareness and behavior? Theoretical applications and directions for research. Personnel Psychology, 48, 803– 840. Louie, T.A. (1999, February). “Decision Makers’ Hindsight Bias after Receiving Favorable and Unfavorable Feedback,” Journal of Applied Psychology, pp 29–41. O’Reilly, B. (1994, Oct 17). 360 Degree Feedback Can Change Your Life, Fortune, (October, 17, 1994), pp. 93–100 Romanoff, K. E. (1989). The Ten Commandments of Performance Management, Personnel, 66 (1): 24–26; Tsui, A. S., & Ohlott, P. (1988). Multiple Assessment of Managerial Effectiveness: Interrater Agreement and Consensus in Effectiveness Models. Personnel Psychology, 41, 779–803. Read More