As opposed to a typical performance evaluation, which assesses a worker’s performance, a 360-degree review shows how the employee achieved the output. It identifies areas of personal development as well as management development.

For a programmer, for example, you would use this process to verify how well code is written rather than measuring the number of lines of code. For a manager, this process provides a better understanding of the manager’s ability to interact and lead employees.

“It measures how you go about performing at a specific level,” said Scott Pillar, managing director of the Greycoast Consulting Group, a human resources consultancy.

Become familiar with the process
Once you’ve put a 360-degree review process in place, here’s what it looks like:

  • Management determines who will receive a review. Because the process can take a while—and you don’t want to overburden employees by having multiple reviews going on simultaneously—one person in an area goes through the process at a time.
  • Subordinates, peers, and supervisors/managers of the employee being reviewed fill out a questionnaire about the employee. They do so anonymously, so that they can be more at ease with giving honest answers. The questions ask for a numerical evaluation regarding each topic, and then ask for additional comments to support the evaluation.
  • After the questionnaires have been completed, the results are compiled. Average scores are calculated and the comments are consolidated. The results are then organized into a report that can be reviewed by the manager of the person being reviewed.
  • The manager and the employee review the results. As they move through the reports, the manager and employee identify areas for improvement.
  • The employee is given a period of time to develop an action plan to deal with the identified areas of improvement.
  • The employee and manager meet again to finalize the action plan. The goal is to have a plan in place that they both understand and agree on, and ensure that it includes applicable goals and objectives with a reasonable timeline for completion.
  • Once the plan is in place, the employee begins to carry it out. The manager monitors the process to ensure that it is being completed, and offers assistance where needed.

After a period of time (usually six months to one year), the review process is repeated. The results are compared to the previous review and successful areas of growth are identified as well as any areas that continue to be an issue.

Determine how the process will be administered
You can administer a 360-degree process in two ways: Hire a third-party firm that specializes in administering these programs or administer it yourself. The former has a higher price tag. The latter has a higher cost in internal resources.

Enlisting a third party
Third-party consulting firms, such as Greycoast, provide the expertise for setting up the review process that many companies lack. While the up-front costs of using a third party may seem high, the cost can be quickly justified.

According to Pillar, a company setting up a 360-degree review process must decide whether it is going to create its own administrative process or use a prepackaged solution for administration. Using a prepackaged solution, such as the CheckPoint software available from The Greycoast Consulting Group, reduces the costs associated with developing your own methods of collecting and tracking the information. A good package can analyze the data collected and produce the reports you need in about an hour.

Pillar says that in his experience, third-party firms providing packaged solutions can also assist with instilling employee trust in the process. Employees are generally more comfortable when they know that someone other than another employee is going to be handling their confidential information. As a result, people tend to be more open with their comments during a review.

“Sarah,” a director in a medium-size manufacturing firm, was initially exposed to 360-degree reviews when her company’s HR department decided to try the process and she was selected as the test case. After her review was completed, the HR department determined that the 360-degree process didn’t fit in well with its established review procedures, so it didn’t move ahead with widespread use of the process. Sarah’s CIO, however, found it useful and decided that the technology department would implement the review process.

Since Sarah was the only person in the department who had experience with the review process, the CIO put her in charge of implementing it. Based on her knowledge of the process and the insight she gained from enlisting the help of third-party consultants, Sarah was able to put a good process in place.

While her CIO was pleased with her efforts, he informed her that the department didn’t have the funds to engage a third party to administer the process. The responsibility of administering and maintaining the process also fell on her shoulders.

In establishing the process, it helped Sarah that the technology department had already set expectations for leaders and individual contributors. Sarah used these criteria when she wrote the review surveys.

As expected, the hardest part was compiling and analyzing the data. Because of her lack of experience in analyzing surveys, and because of the time it takes to do the analysis properly, Sarah’s process consolidated the information, but didn’t provide any in-depth analysis.

“We do little analysis,” she said. “Mostly what we do is just report what was recorded.”

Even without this analysis, a considerable amount of time and overhead is involved. Sarah estimated that, for her company, it takes about 20 hours for feedback, consolidation, analysis, and review for each person reviewed: “I estimate that our internal costs are about two times the cost of using an outside agency.”

Prepare the team
The entire 360-degree review process depends on employee participation. If you cannot get the peers, subordinates, and leaders of the person being reviewed to give a fair, honest, and open evaluation, the process is worthless.

“If you shove it down your employees’ throats, it will backfire on you,” Pillar said.

To begin implementation, hold team meetings in which the entire process is explained. All employees must understand how the process works.

Give them every assurance that the results are kept confidential. Explain that the process relies heavily on written comments that give an honest evaluation of the employee. These comments provide the details that illustrate how employees must alter their behavior. If the employees don’t trust the confidentiality of the survey, they will be hesitant to provide honest comments.

You must also lay out the role of the 360-degree review in the overall scheme of their jobs. Make a distinction between this type of review and a performance evaluation. Everyone must understand that a 360-degree review is a tool to be used for personal and professional development.

People naturally get nervous when structure changes, so focus on the positives. “Being able to understand how others perceive you gives you invaluable insight,” said Dave, the manager of communications and training in Sarah’s technology organization. “I found I was better able to understand my challenges and get movement out of some groups.”

In one instance, Dave found that “the leadership approach I was taking with one group was not working, so I made changes.” Dave was having a difficult time getting one of his project groups to complete its tasks. The 360-degree review showed him that the team members didn’t feel he was engaged in their work, and they needed more direct guidance from him. Using this feedback, Dave got more involved with them and more directly mentored their work. The result was a happier, more effective work group.

Align measurements with the organization
For the 360-degree review process to have value to the business, and for employees to see their value to the business, the evaluation criteria must be tied to the business goals and objectives.

When setting up the review process, define the categories of behavior you wish to measure. It is important that what you measure is consistent with what you’ve measured in the past. This helps the employees become comfortable with the process, and also lends it credibility. The criteria you’re measuring must be traceable to goals and objectives of the department, which in turn should extend to the goals and objectives of the company.

In Sarah’s case, her organization was already measuring people on leadership, communication, and teamwork. These became primary categories for the 360 process. She developed subcategories and questions to measure each person’s effectiveness in these areas. In addition, she developed a job-specific category that asked questions related to respective job descriptions.

The more clearly you can align your measurements with the company goals, the more your employees will see the process’s worth. More importantly, though, an employee being reviewed will be able to see the value that he or she adds to the company.

Set up software
Whether you administer the process yourself or have a third party administer it for you, it makes sense to use a software application to collect the information. Your job is even easier if you use a package that will also analyze the information and produce the reports.

In Sarah’s case, the experiment that the HR department ran with the 360-degree review process involved a third-party consultant that used a proven software package. When Sarah took over the process for the technology group, she used the questions from the third-party product as a base for the company’s application. It was a good start, and enabled her organization to set up a customized application with a Web interface that is now used by employees across the organization. Unfortunately, it only collects data and does no analysis or reporting. Those features are done manually. One of the biggest problems that Sarah’s organization has is dealing with the massive volume of information that is collected from the surveys.

For many companies, using a more comprehensive package has a greater appeal. Getting set up only takes a day or two. A typical package resides on a server with a Web interface. If you’re having a third party administer the process for you, they’ll often host the software along with your customizations. Once your system is set up, you have a series of questions customized to your organization, full analysis capabilities, and meaningful reports. As mentioned, you should make your measurements applicable to your business by tying them directly to the goals and objectives of the company. Once you establish your measurements, you can form a series of questions around them that elicit the type of information you need.

Having someone assist you with the design of your reports can make a big difference too. The output from the process will include information for the employee and reports designed specifically for management. In both cases, the reports are only as useful as they are understandable.

Train everyone involved
The most important aspect of the 360-degree review process is the training of the participants. If people don’t know what they’re expected to do and how to do it, the process can never be successful. Three types of training need to occur: survey training, management training, and employee training.

Survey training involves sitting everyone down and explaining how they are to complete the survey on the person being reviewed. Everyone must understand the importance of the survey, the types of questions, the fact that comments are imperative to the success of the review, and again, they must feel confident that their comments will be kept anonymous.

Management training is necessary to ensure that the process has the desired effect on the employee being reviewed. Critical information delivered in the wrong way can have an adverse effect. Rather than being an instrument of improvement, a poorly delivered review can invoke anger and resentment. This can result in increased tensions and decreased teamwork. Managers and supervisors who deliver the results of a 360-degree review to employees must be trained in how to do it properly.

Employee training will help workers accept the information with an open mind and act on the information that they receive. After all, the reason for using the review process is to help employees improve themselves; they must be shown how to develop an action plan that enhances the good things they are doing and improves their interactions.

Administering the reviews
Once you’ve set up the process and trained everyone, the next step is to begin performing reviews. Start by selecting one person and running that person through the complete process. Select someone who is open minded enough to use the information from the review in a positive manner. The best advertisement for the process is for everyone to see it have a positive effect on the work environment.

Repeat the process with a similar person from a different workgroup. This gets more people involved in the review process and helps everyone become more comfortable with it.

As the process proves itself, you can perform reviews more frequently as your workload permits.

Doing your homework makes the review work
The value that you and your organization can receive from the 360-degree review process is considerable, but you have to invest the time and money up front to ensure that it is set up properly, and you have to continue to support its implementation. In the long run, your business will benefit by having employees who are continually improving their behavior because they trust the feedback they are getting.


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Discover the secrets to IT leadership success with these tips on project management, budgets, and dealing with day-to-day challenges. Delivered Tuesdays and Thursdays