360 Degree Feedback: How It Works & Should You Do It?

360 degree feedback, also known as a 360 performance review, includes feedback not only from the employee’s supervisor, but also from the employee’s customers, vendors, peers, and/or direct reports. The benefit is that managers gain insight into an employee’s performance from multiple perspectives.

This article will explain how to conduct 360 degree reviews, when to do them, and tools that can help. We also got a few testimonials from people who both love and hate 360 reviews so you can get some perspective on whether a 360 feedback process is right for your company.

6 Steps To Conduct 360 Degree Feedback Performance Reviews

When you think of 360 reviews or feedback, think of the employee receiving the 360 degree performance review as standing in the center of a circle. Those all around them in the office setting are reviewing the employee’s job performance. It differs from a top-down traditional performance review where only the manager reviews the employee on job performance.

Source: thecontextofthings.com

360 feedback performance reviews require some planning because there are more steps than when doing a traditional performance review.

Here are 6 steps to implement 360 reviews at your business:

Step 1. Identify the Reviewers

In a 360 performance review, you first have to define who the reviewers are based on the employee’s work relationships and org structure. In other words — who has insight to the employee’s performance? Consider 8-10 reviewers with different perspectives on the employee’s work to ensure a broad set of perspectives. Below are individuals and groups of individuals to consider:

• The employee’s manager — Sam works for Liz. Liz should be a reviewer. This is where the traditional performance review would stop.
• The employee’s manager’s manager — Sam works for Liz, who works for Jill. Jill could also be a reviewer if she is familiar with Sam’s work.
• Direct reports of the employee (if they are a supervisor) — Sam has 7 direct reports. Some or all of them should be included as reviewers. This can give insight on Sam’s effectiveness as a manager.
• Peers of the employee in the same department or job type — There are 3 other people who do the same basic job as Sam. Consider having them share their feedback on Sam’s performance because they’re familiar with what the job requires.
• Cross-functional peers of the employee if they work on teams/projects — Sam worked on 2 projects this year, with 5 people from different departments on each project. Consider inviting some of them to review Sam’s contributions.
• Key customers the employee has done work for — Sam serves 8 key customers. A subset of them could be included as reviewers.
• Vendors the employee has worked with — Sam works with 4 primary vendors. They may be able to provide insight into Sam’s work style and performance.

Wow. As you can see the first step, identifying reviewers, may take a while. 360 reviews really only make sense if there are multiple people to review each employee’s performance. A very small business might not have enough staff to conduct 360 reviews. For example, if there are only 5 of you currently working in your business, it will be difficult to maintain anonymity during a 360 feedback process.

Ideally, you want to be able to identify at least 8-10 reviewers so that feedback can be aggregated, and to do that you’ll need at least that many people in your company. However, consider waiting until your company has about 20 employees before doing 360 reviews if you want reviewers to remain completely anonymous.

Step 2. Create Review Questions

Here are sample open-ended questions to ask on a 360 feedback survey:

• How has the employee demonstrated commitment to company values?
• How are the employee’s technical skills in comparison to others in same/similar positions?
• How responsive is the employee to customer service requests?
• How effective is the employee’s leadership style?
• How is the employee to work with on an interpersonal level?
• What do you like most about working with the employee?
• What might the employee do differently to improve performance in the coming year?
• If you could suggest training topics, what might you suggest the employee learn more about?

In contrast to a standard performance review, where you may be reviewing work performance, work style, and goal accomplishment on a 3 or 5-point scale (e.g. 1 is poor, 5 is excellent), a good 360 review tends to be open-ended and anecdotal. So instead of asking reviewers to rate an employee on a 1-5 scale, your questions may be more broad, and you may need only 3-5 good ones.

Step 3. Train the Reviewers

This is often a missed step of a 360 review process, and one that can really mess up your 360 feedback, as well as create an HR nightmare (think lawsuit). You will need to provide instructions and training to ensure that the reviewers don’t use the feedback opportunity as a chance to vent their frustration or provide inappropriate (or even illegal/protected class-type) commentary. For more info, review our articles covering Federal Labor Laws, Anti-discrimination and Hiring Laws.

For example, an untrained reviewer who is frustrated with Sam’s work might respond with: “Sam is a young jerk who doesn’t know the first thing about management” rather than stating something more actionable, like, “Sam, being new to the workforce, could benefit by listening more to his employees’ questions before asserting his opinion, and by asking some of the more seasoned management staff for advice before finalizing his recommendations.” The first example was mean spirited, not helpful, and could be considered illegal because it mentioned Sam’s youth (i.e. age discrimination).

On a positive note, some HR software with performance review programs, like Namely provide training and others, like Success Factors, let you run a legal check on the wording of responses before allowing reviewers to submit their comments online. Otherwise, it’s your job as the manager to make sure that the reviewers keep their comments focused on business-related improvements, not personal attacks or discriminatory remarks, and that comments remain confidential.

Step 4. Use a Survey or Performance Review Software Tool

It’s important to maintain the confidentiality of reviewers’ identities to keep integrity in your 360 degree feedback process.

That’s why we recommend using a free survey tool like SurveyMonkey or SurveyGizmo that can maintain confidentiality. Even better, purchase web-based software designed specifically for conducting 360 feedback reviews.

Many of the HR software and performance management software companies we recommend, including BizMerlin and Small Improvements, have special features that allow you to do a 360 review.

In addition, we searched for quality tools appropriate for small business that focus exclusively on 360 feedback. Although we haven’t formally reviewed these packages, and can’t recommend one over the other, these 360 feedback programs all had excellent user ratings and provide the functionality a small business needs:

• A library of questions to help you get started, and the ability to edit or write your own
• Aggregate reports, including individual and group reports to help you provide feedback
• Rater selection & tracking, also allowing feedback from those outside your company
• Training, webinars and online documentation to help you and your reviewers get started
• All but one vendor provides a self-service portal for you, your staff, and reviewers to use

Software Designed Specifically for 360 Reviews

	Zoho People	Spidergap	Vision Metrics
Starting Price	Free for 5 employees or fewer	$9 one time per employee	$0.01 per year per employee
Free Trial	✔	✔	✔
Free Version	✔	✔	✔
Self Service Portal	✔	✔	✔
24/7 Live Support	M-F	✔
Online Support	✔	✔	✔

Step 5. Aggregate the Data & Check For Trends

You’ll want to plan ahead with whatever tool you use to be able to aggregate or summarize the data in a way that protects the anonymity of the reviewers (so that the person being reviewed doesn’t retaliate, creating an HR headache). You could do this in MS Excel or Google Sheets, but fortunately, many of the online 360 performance review and survey programs do this for you.

As you’re reviewing and summarizing the data, you’ll identify actionable trends. For example, if 6 out of 10 reviewers state that Sam tends to blame others, then that’s something you may want to coach Sam on — taking ownership of his mistakes.

Step 6. Share the 360 Feedback in Person

The summarized feedback responses should be shared directly with the person being reviewed, either by the manager, the manager’s manager, HR, or some combination. Always deliver feedback in person, or via Skype/video conference if the employee is not onsite. If your reviewers were trained properly, your data will provide actionable feedback for Sam to grow his career and improve his performance.

Be sure to share both positive and negative feedback to build your employees’ self-esteem and teamwork skills. For example, if most of the reviewers state that they like how responsive Sam is, share that information right along with the other feedback. Lominger research shows employees are often ‘blind’ to what they do best. Hearing it from their peers can boost their morale, and is a great way to recognize a job well done. And of course, all feedback should be delivered with the positive intent of growing your employee’s skills, confidence, and motivation.

Many HRIS systems will offer a built-in performance review component, but for 360 degree reviews you should check out Zoho People. Not only does this program provide an easy way for both you and your employees to refer back to their performance reviews, it also lets you create improvement programs and leave constructive feedback to help motivate each individual.

Visit Zoho People

When To Do a 360 Performance Review

Three timeframes for you to consider conducting 360 reviews are:

1. Once a year, or annually on the individuals anniversary date
2. At the end of a project
3. Whenever you want to provide developmental coaching/succession planning

Many companies do their 360 feedback annually. Others only do 360 feedback at the end of a project, or when they want to give feedback to support an employee’s development, such as part of a management/leadership development program. Some do standard reviews annually, with the more in-depth 360 reviews only every few years.

The best companies provide informal feedback on an ongoing basis, in between more formalized reviews. Ultimately, you have to decide what timing is best for your business, but we recommend regular informal feedback so nothing comes as a surprise to the employee.

Should You Do 360 Reviews? – Pros & Cons

So you may be asking yourself if it is worth it to do 360 performance reviews, write all those questions, survey all those people, and aggregate all that data? There are people on both sides.

Here’s a summary of the pros and cons of 360 degree feedback performance reviews:

Now, let’s hear from some experts on both sides of the aisle.

Many HR experts and Business Owners Support Doing 360 Reviews

Linda Pophal, CEO, Strategic Communications, LLC

360 degree input from an employee’s team members, coworkers, colleagues and customers provided me with a broader range of inputs to form opinions on the employee’s effectiveness in meeting goals and supporting the organization’s mission, vision and values. Making judgments based only on my own observations, impressions or opinions, runs the risk that I might miss an important opportunity for providing positive, or constructive, feedback and also runs the risk that my feedback could be clouded by my own unconscious biases.

Lisa Philyaw, Consultant, FMG Leading

360 feedback offers the opportunity for the receiver to
gain self-awareness around strengths, development opportunities, and gaps in perception, and this type of feedback can be difficult to come by through other modes. Often times, we find our clients are unaware of how they are coming across to others; the 360 results provide them not only the insight to realize it, but also an understanding of how it impacts those with whom they work – a crucial first step in creating motivation for growth and change.

Natalie Frank, Head of Community, HoneyBook

We do 360 performance reviews twice a year because it
creates a culture of feedback built on the foundation of trust and honesty. It eliminates fear, ambiguity, and uncertainty in the workplace. When employees are empowered to give and receive feedback openly, they take more ownership in their roles and see that their words make an impact.

360 Performance Reviews Are Not for Everyone

In fact, a recent Harvard Business Review article stated that as many as one-third of US businesses are doing away with formal reviews altogether in favor of more frequent, informal feedback. Here are some perspectives:

Amber Hunter, Director of Employee Experience, A Plus Benefits

I hate 360 feedback because in my experience, peers
often stockpile the negative feedback and utilize the 360 process to dump feedback anonymously on the receiver rather than addressing concerns in the moment. Much of the feedback seems to be personal rather than constructive. I’ve been on the receiving and giving ends of 360 feedback and I think organizations that foster open, honest cultures of dialogue don’t need to use 360 feedback as a development tool. Teaching your team members to speak up when they have a concern with, or praise for one another, will build a stronger culture in the long run.

Mike Catania, Chief Technology Officer, PromotionCode

As a manager of 8 employees, I hate 360 Reviews because
it asks untrained people to do subjective evaluations of people who may or may not be doing subjective evaluations of them later. There are reasons that managers receive formal training on how to evaluate employees and don’t leave it to Yelp-style opinions from co-workers.

Guv Jassal, Director, Washington Frank International

I hate 360 feedback because personal bias can get in the way. I think a better method is to build feedback and coaching into your daily interactions and make it a part of the company culture.

360 Performance Review Q&A

Q: I have an employee I want to fire, but I need more data on his poor performance to do so. Can I do 360 feedback just on him?

A: I don’t recommend using 360 feedback for anything but performance support, employee coaching, and leadership development. In the case of poor performance, the only time it would be appropriate to do a 360 on that employee, is if you are doing 360 on all employees in the same category. For example, let’s say your poor performing employee is a sales manager. If you conduct 360 feedback on all the sales managers, then yes, there’s no reason to exclude this one. Otherwise, your best option is to do a performance improvement plan or progressive discipline and document, document, document.

Q: One of my employees refuses to provide feedback on her supervisor. Can I force her?

A: It’s not uncommon for reviewers to fear that their feedback will come back to haunt them. While you should not force anyone to do a review, you can reassure her, and all reviewers, during their training, that their feedback will be shared only in aggregate — no names used, and that you will guarantee anonymity.

Q: An employee found out that her co-worker, who she thought was her best friend, gave her negative feedback on the 360 survey. It’s now WW3 in that department. What should I do?

A: The best way is to prevent this by 1) training your reviewers to provide constructive criticism and 2) maintaining strict confidentiality — only sharing the data in aggregate — the overall themes, not the exact statements, and never the reviewers’ names. However, if you are in this situation, you need to take an HR approach, sit down with both parties and help them work through their concerns. It’s not your business whether they remain friends, but it is required that they work together, respectfully and peaceably.

Q: I don’t have time to aggregate the results; can I just print the survey summary and email it to the employee?

A: No, because 1) it could be emailed to others, and 2) feedback of this nature requires a sit-down-conversation. Even if the reviewers’ names have been stripped out of the file, your employee receiving feedback deserves to hear it in person. You need to be sure they clearly understand your intent is to coach, develop, and grow their career. They also need to be able to share their perspective, ask questions, and get your input on what areas of their performance to focus on. That heartfelt dialog can’t occur via email.

Bottom Line 

The smallest of small businesses may have no reason to use 360 feedback, but most businesses can benefit by helping their employees recognize and embrace their strengths, and shore up any skill gaps to improve overall business performance. If you want a well-rounded, fair view of your employees, 360 feedback is worth a try. But, and this is important, as some of our commentators pointed out, unless you properly train your reviewers, 360 feedback could backfire and lower employee morale and trust.

So if you’re going to do it, do it right by training the reviewers, using a 360 feedback software tool to prepare the reports, and sitting down to provide the feedback review in person.

Otherwise, you’re better off with traditional performance reviews.

We’d like to hear from you like some of our other contributors — do you or don’t you do 360 reviews and why? Share in the comments!