The multisource, circular feedback or 360 degrees evaluation (its proper name is 3 or 4D) represents a relatively new concept in managerial theory and practice, even though its grounds were successfully set during The Second World War.
What does multisource or circular feedback mean?
The multisource feedback is a method of evaluating employees, using more sources, multiple evaluators in different hierarchical and functional positions towards the evaluated person, inside or outside the organization. It is preferable that every evaluator to tell their opinion anonymously, so that the risk of biases be low.
Despite its “youthfulness” (the ‘90s were the years of great tumult for theories in this area), its penetration rate is extremely dynamic. A study made by one of the most important consultancy firms in USA shows that, if in 1995 40% of the American companies used it as a managerial instrument, in 2000 the rate has increased to 65%. There are no clear studies in Europe, but the numerous number of multisource evaluation software products existing on the market shows that they are greatly used/needed.
The motives of its popularity are very clear: the results of a multisource feedback are more relevant than the ones of an objectives evaluation, as it shows not only the capacity or incapacity of employees to perform, but also offers a diagnosis for the obtained results. Moreover, the costs, the time dedicated and the necessary logistics are by far lower than in the case of assessment centers, a thing not at all to be neglected.
Even so, in the local companies the use of such a feedback is relatively low. A study made by ITEX(not so formal to be taken as reference, but sufficiently documented to be taken as an example), shows that from the 40 local top managers questioned, none of them have yet implemented in their own company or in the department that they run, performance evaluation systems. None what so ever. From them, 38 would like to implement a multisource feedback system, and 2 of them believe in the power of single source or “one on one” feedback (unstructured discussions between direct manager and employee).
Where does this desire come from and why is it backed by a lack of actions?
On one hand because of the almost omnipresent mentality: economical performances are generated by money, marketing policies, strategies and necessarily by people. As long as people don’t count in the equation of success, their performances aren’t that important to be measured.
On the other hand because of the maturity lack of the HR market, which put all its money on recruitment, forgetting to offer and promote other services. “The right person in the right place” cannot be exclusively attributed to recruitment and selection processes, as both man and place are dynamic entities. Therefore it is necessary once in a while to be verified if the man and the place are in tandem.
Last but not least, because of the fact that the majority of managers think that employees evaluation and especially the 360 degrees feedback are extremely expensive: they need time, money and paper (bits nowadays) and offer nothing in return.
I can fight that last impediment, using the keypad as a weapon and I state that not evaluating is far more expensive than doing it. Unlike performances, non-performances are double priced: employees’ salaries and all the afferent expenses, adding the costs of their mistakes, of their choice of not implicating themselves in their job and of contagiousness, as encouraged non-performance spreads like a plague.
How does multisource feedback help?
The main benefit of evaluating performances is represented by …performances themselves. Through circular feedback you don’t just evaluate employees but you also help them understand what it is expected from them. Moreover because of the multiple sources of opinion they tend to change their behavior easier. Among the main benefits, therefore I list:
- Improving organizational communication;
- Improving the company’s services or products, the relationships with clients, suppliers, partners by actively implicating them in the employees performances analysis;
- Improving the working environment;
- Improving organizational performances in all evaluated hierarchical levels, improving individual performances;
- Waking the organization’s “self consciousness”, identifying the human capital’s strong and weak points, therefore identifying new ways of managerial actions;
- Creating an organizational map of high performance employees and of lumber, of dispensable employees. This is a starting point for establishing personnel necessary and forms of contingent remuneration (wages increases, bonuses)
What is the real greatest impediment in performance evaluation?
The biggest impediment is that of describing performances, of detailing it in specific, measurable, objective and relevant indicators. A specialist who knows the organization, its objectives, the people, can easily make this thing a reality. Let’s not forget that setting relevant indicators is done only at the first evaluation. Afterwards, their actualization is facile and takes little time.
What are the risks?
Companies with a stressful environment are possible to find this process as a supplementary stress, as a test the employees are forced to take which will surely generate negative consequences. However, with practice the risk can be minimized.