You must have already heard about performance management system at enterprises for effective employee management. But do you know the benefits and best methods? Do you know what is 360 degree appraisal?
This blog will help you learn definition of 360 appraisal management and unique methods to perform. Let’s start with definition of 360 degree performance appraisal.
What is 360 Degree Performance Appraisal?
In its simplest, 360 degree performance appraisal is an advanced form of providing appraisals to employees at organisation. It involves feedbacks from different associated groups of organisation and outside (clients). The group of people or reviewers may include manager, HR, colleagues, and client they worked with.
The feedback is collected in the form of reviews from people and provides data for appraisals accordingly based on reviews. In other words, 360 degree appraisal method includes multi source feedbacks for the employees affected by their performance throughout the period.
Also Read: 4 Tricks to set-up a Fair and Transparent Appraisal system!
Importance of 360 Degree Performance Appraisal
When we talk about business performance and growth, what most important? Definitely your employees, their well-being and what else?
Now, what could be better than feedback appraisal for employees based on their performance? The activity helps motivate your employees to perform better every time. An accurate and fair 360 appraisal system makes employees an important asset in terms of effective employee management at an organization.
360 Degree Appraisal Method
- Rating scale method
- Ranking method
- Free form method
- Confidential reporting method
- BARS method
1. Rating Scale Method
Rating scale is one of the most common methods of assessing an employee’s performance. This method includes a scale of 1 to 10 points. The parameters of the scale rating are delivery, attitude, attendance, regularity, and accountability, which are rated for the employee accordingly.
Many performing companies are using this method to have an effective and simple activity at place. The reviewing people are selected based on the employee’s role and nature of the job. The number of points scored for all the columns are finally added. Employees are therefore recognised and given a raise based on the performance and ratings.
This method makes the 360 degree performance appraisal management easier and fool proof.
2. Ranking Method
This traditional method includes comparison of performance of the employees with other employees at same tier and with same rank. Here a manager is allotted to provide the comparison report based on numbers and graph. A fixed percentage of employees are allotted different performance categories like excellent, good, average, below average, poor etc.
Ranking method is generally used when the manager has to make decision as to which person is the best worker for a given period of time. When someone has to be promoted or needs to be laid off, ranking methods is the best and quick way to rank.
The biggest advantage of this method is that it comes handy to HR manager and makes the complicate reviewing process easier.
3. Free Form Method
It is also called the ‘Essay appraisal method’. This is because the superior provides a detailed description of the selected employee’s performance. This includes supporting documents and examples of his/ her performance. This method could be highly biased at providing feedbacks.
The reviewer under this method also uses the rating scale method (described earlier in the blog) to rate the weaknesses and strengths of an employee to validate the essay report. This method is very time consuming as the reviewer is required to collate all the documents and submit a brief.
Free form method is considered to be one of the non-quantitative evaluations for performance appraisal.
4. Confidential Reporting Method
This method is very popular among governmental organizations. Here the superiors need to write a confidential report on the subordinates, who needs to be reviewed, with respect to his/ her behaviour and duties at organization. The report prepared here would not be exposed to anyone.
This is only referred by the top management or the human resource. In India this method is being used by most of the government organizations like the Armed Forces, Police department, CBI etc. The main factors assessed here are:
- Sincerity and trust-ness
- His/her behaviour with the subordinates
5. BARS Method
BARS (Behaviourally Anchored Rating Scale) method is one of the new age methods to provide accurate feedback. The method consists of a set of behavioural statements that explain the performance of an employee towards a particular job.
This method acquires a set of parameters and decided points for each. The performance parameters could include good, bad, average, must be laid off, and so on.
Also Read: How to Ensure Constructive Feedback for Managers?
360 Degree Performance Appraisal Advantages and Disadvantages
Appraisal management system could be very powerful asset for businesses. Yet, every resource has its own advantage and disadvantage.
Advantages of 360 Degree Appraisal
- Fair and accurate reviews
- Eliminates Biasness
- Motivated workforce
- Comprehensive view of employee performance
- Persuasive Reviews
- Boost employees morale
- Positive work environment
Let us get an insight into the advantages of 360-degree appraisal.
▸Self Development of Employees
The 360-degree appraisal system includes acquiring of 360 degree feedback from different proficient, skilled, and accomplished personnel from the organization. This will give a vivid picture of the areas of improvement for the employees and they can work on it for self-development.
In addition, it helps employees to know the expectancy and standard of performance expected from him and can work accordingly to achieve it.
▸Fair and Accurate Reviews
The 360 degree appraisal reviews are just and fair as the review system includes different departments or different personnel and not a single source.
This surges the transparency of reviews and blocks the loop holes of biasness or unfair reviews. The accuracy of reviewing also escalates.
The 360 degree appraisal is bias-free as the 360 degree feedback is a multi-rater feedback system that is appropriated from different sources of an organization and is not monocentric.
The performance review of employees is acquired on the basis of their strengths and weaknesses, skills, and more are evaluated based on the feedback of employers, peers, managers, and more. Overall it is a 360-degree performance management.
so, it leaves no room for biases as biased feedback can be filtered out from the actual ones by referring to the statistics of multisource reviews.
One of the vital advantages of the 360-degree appraisals is that it motivates the employees in terms of both resource and knowledge. In terms of resources, an appraisal system adds to the income of an employee which is the main focus of outcome for productivity for an employee.
Similarly, a 360-degree feedback is taken from diversified personnel from the organization which boosts their morale when the reviews are positive and exhibits the areas of learning from the adverse ones.
▸Comprehensive view of Employee performance
The employee’s 360 degree performance is reviewed in a comprehensive way which gives a brief insight into the work process and progress of the employee. A 360 degree appraisal is an outcome of the 360 degree feedback system which is a comprehensive way of gathering reviews from multiple sources within an organization.
It gives a vivid insight into the performance of the employee as well as showcases the areas to improve.
The feedback system in a 360 degree appraisal is comprehensive as it is reviewed by proper reasoning and analytics rather than casual evaluation.
It is not just a merry temptation of biases but rather an analytical review that is a result of the diversified reasoned opinion of various ( employer, peer appraisal feedback, and more) personnel in an organization. Being a multi-rater feedback system, the reviews are not only fair but also persuasive.
▸Boost Employees Morale
The appraisal and positive feedback from heterogenous prominent personnel as well as peers improve the employee’s morale and encourage them to be more productive. In addition, the adverse feedback too increases the learning capacity of the workforce and makes it a win-win situation for them in both scenarios.
Besides, appraisal and recognition naturally boost the employees’ motivation to be more productive.
▸Positive Work Environment
The process of 360-degree feedback contributes to team building by enhancing the professional relationship among the organization’s workforce.
An engaging and healthy professional relationship between the employees yields a positive work environment out of controversies and conflicts.
Disadvantages of a 360-degree appraisal system
There are various pointers that can prove as a disadvantage in a 360-degree appraisal system which includes
- Bias and Unfairness
- Data Overload
- Lack of accountability
- Conflicting feedback
- Internal controversies
- Enhances Office politics
Let us take a close watch on the above-mentioned pointers on the disadvantages of 360-degree appraisal.
The process of a 360-degree appraisal is time exhausting as it goes through different personnel in an organization for 360-degree feedback.
The process of gathering feedback, analyzing the received data, discussing the feedback, and appropriate follow-ups take time. The multiple steps and personnel involved in it make it lengthy and time-consuming.
▸Bias and Unfairness
This is a potential drawback that can prevail while giving feedback. Feedback may be influenced by personal relationships, and biases and can be an outcome of office politics.
Specifically, when the company size is mid, office politics becomes prominent. In addition, there is intentional negative feedback in fear of retribution which degrades honesty and transparency in acquiring feedback.
360-degree appraisals system gathers feedback from diversified sources like employers, subordinates, peers, and sometimes even customers in order to make it more authentic. But this in contrast increases the data and results in data overload thereby creating complexities and confusion.
In a mid or large-scale company where the employees count is large, 360-degree performance appraisal data creates perplexity and goes puzzled for the management to access.
▸Lack of accountability
The 360-degree appraisals system too has accountability issues as it comes from different sources and makes it difficult to determine who is responsible for specific comments or suggestions.
For example, if an employee receives negative feedback from a peer, it may be difficult to determine who specifically provided the feedback. This can make it challenging to follow up on the feedback and take appropriate action.
As a 360 degree feedback is acquired from various sources, the possibility of contradictory feedback persists which creates confusion.
This not only creates perplexity but also makes it challenging for employees for understanding their priority areas that need attention and focus.
As there are multiple raters to review the performance of an employee for 360-degree appraisal, There arises conflicts and disagreements between the raters regarding the feedback.
For example, a peer may rate an employee’s performance highly, while a supervisor may rate the same employee’s performance as average. These discrepancies can create internal controversies and make it challenging to develop an accurate assessment of an employee’s performance.
▸Enhancement in Office Politics
In some cases, feedback provided by raters can be misinterpreted, leading to controversies. For example, a rater may provide feedback that is intended to be constructive, but the employee may interpret it as overly critical or negative.
This can create internal conflicts and lead to gossip, hatred, and toxicity giving rise to office politics. It affects the healthy work environment and makes it gloomy.
Committing to performance appraisal on your own without any software assistance could be difficult and error prone. Data handling could be the biggest hurdle. Instead, dedicated software like appraisal management system can help conclude with yearly appraisal skilfully and easily. Pocket HRMS is one such integrated HR solution!
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