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Leading companies keen to develop their people’s skills and experience – especially those of leaders – are increasingly turning to the 360-degree feedback system. But it has its limitations.
The 360-degree process refers to gathering feedback from a wide range of sources: teams, peers, supervisors, direct reports, members of the board, clients – anyone who can share meaningful information about the person involved. It’s not a high-tech solution, although there are many off-the-shelf software tools around to help and some companies have developed their own.
Human resources specialists and executive coaches specialise in 360-degree performance reviews, and say that it is a process better suited to developing talent than managing performance.
Executive coach Linda McDonald, who runs Corporate Learning in Sydney, says: “The definition of a 360 is you get feedback from your direct reports, your peers and your boss.”
McDonald has some reservations. “I don’t think a person’s peers are in a position to make an objective assessment of a person’s performance. You can make an assessment on their behaviours and how they work with them and how they interact on a day-to-day basis, which is different to performance.
“And it’s the same with direct reports. Direct reports will generally give anonymous feedback to their boss about their respective behaviours when they’re ticking the boxes and putting comments in and so on. You can usually get fairly honest feedback. But if they were rating the boss on their actual performance, they would have to know specifically what those goals and targets are. So then it becomes a personality thing.”
However, the 360-degree measurement tool comes into its own for developing people in leadership roles. For example, it could help a young manager who was promoted into a senior position too early. Or it could get a manager used to working on the day-to-day issues to start thinking more strategically.
HR consultant Margaret Harrison, who runs Our HR Company in South Yarra, says the process works best when there are five people in each category – customers, peers, direct reports and bosses. Each person is given a multiple-choice questionnaire. All questionnaires are identical.
“What’s on the questionnaire is about management style,’’ says Harrison. “If you can describe the person’s personality, how the person reacts to other people, what the productivity of the person is, would you recommend that people work with this person.
“It’s fairly general but they point out the individual person quite well and then they can get quite specific about what would you recommend this person not do. So there is a whole swag of those.”
She says there should be no more than 20 questions.
“The reason that people keep it to 20 questions is because people refuse to do them if there are too many. The simpler the better. And they all need to be very structured and all very much the same,’’ she says.
“What you are trying to do is get the essence of the person and how this person operates with other people. It becomes subjective and objective. Subjective in how each person sees that person but the overall picture when correlated will be an objective assessment.”
People are given a week to 10 days to respond. All the information is anonymous. Nobody puts their name on anything.
The results are scanned through a computer that spits out a report on the person or people being assessed. A consultant from the HR firm or coaching company will evaluate the report.
Giving feedback to the individual is another critical step in the process. “They need to be given feedback on how to improve or how to work on some strengths or maybe work on some weaknesses. Maybe they have to change their personal style even,’’ says Harrison.
But can people change as a result of the feedback? Can you train someone who is constantly focused on details to look at the big picture? Can someone who thrives on teamwork be shown how to make a decision and show leadership?
“What you’re doing is changing behaviours, not changing personalities,’’ she says. “Those people need to understand and identify what are the different behaviours that are important in the person’s job.”
Harrison says the biggest mistake companies make is not doing the follow-up development work.
“If they are not prepared to put in the development time and the development money into those people and into developmental change, then it’s a total waste of time. It has to go hand in glove with the ongoing development,’’ Harrison says. “I never see it as a stand-alone tool. It’s a tool to achieve the next step of either getting the team to work better together, the team to understand each other’s strengths and weaknesses and compensate for them, or getting an individual manager to see where they actually do need some development.”
Harrison says it only works with senior managers. “It’s only really good for senior management teams,’’ she says. “If you go down to general managers, or people who are just managers, it’s not necessary because they don’t have enough influence on other people.”
Involving the internal HR manager in the feedback means any training and development can be discussed on the spot.
The system is a substantial investment; it can cost about $4000 per person. In a company employing 2000-3000 people, it’s not uncommon to see 20 managers being put through the system. That’s $80,000. Add to that at least another $100,000 the company might have to spend on training.
The process takes about four weeks for an individual; about six weeks is needed for a team.
McDonald says she makes a point of talking to people before they go through a 360-degree process. She also provides them with a sample letter for them to send people they are asking to do the questionnaire.
“Typically, if they hadn’t done this before, I would do a presentation to the group and tell them what’s involved. It can be a bit threatening to people who haven’t done it before,” she says.
Most people on the receiving end of the process take the feedback quite well. “Most of them are fairly OK with it,’’ she says. “The majority of people know what their shortcomings are and this report shows them in black and white,’’ she says.
“This is a bit like looking in the mirror. You’re seeing yourself as other people see you and you’re getting some fairly honest feedback from people we don’t normally get. I ask them if there are good news surprises and bad news surprises. Very seldom are there bad news surprises.”