Is 360 Degree Feedback Appraisal an Effective Way of Performance Evaluation?
International Journal of Academic Research in Business and Social Sciences
The 360 degree feedback approach has been implemented by many organisations for development or performance evaluation objectives. This paper questions the effectiveness of 360 degree feedback implementations in rating employee performance. This literature review was conducted on 360 degree feedback practice with performance evaluation purposes. The aim of this review was to define and discuss the 360 degree feedback; contrasting the process with the other methods and identifying whether this is
... ing whether this is a good way of performing appraising or not. The superiority of multi-rater feedback to the traditional methods and the dominance of advantages over disadvantages lead us to conclude that the 360 degree feedback is effective in rating performance. development instrument is rightly proved (Tyson and Ward, 2004) and accepted by experts. However, the efficiency of the method in evaluating performance is not totally clarified. Fletcher summarized the position of multi-rater feedback practice as 'Initially, it tended to be used purely for development purposes, and often on a one-off basis, but increasingly; it is becoming part of the formal, annual appraisal process' (Fletcher, 2001, pp. 479). The question of whether it is effective or not to implement 360 degree feedback in order to evaluate performance in preference to development purposes has not been clarified in the literature. The motive of this paper is finding an answer to the question of whether 360 degree feedback appraisal is an effective way of performance evaluation or not. Conceptual Framework 1.What is Performance Management and Performance Evaluation? Performance management is an important HRM process that provides the basis for improving and developing performance and I part of the reward system in its most general sense. Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. As Weiss and Hartle (1997) commented, performance management is: "A process for establishing a shared understanding about what is to be achieved and how it is to be achieved, and an approach to managing people that increases the probability of achieving success". 'Generally speaking, a performance appraisal is an evaluation of an employee's performance along pertinent dimensions (e.g., results, participation, etc.), and feedback is the communication of the appraisal results to the person being appraised' (Kurtzberg et al., 2005) . The performance evaluation process is known to be a troublesome and vague approach. Baron and Kreps (1999) declared that there is no performance appraisal practice that works perfectly. Therefore, most methods have some defects. However an important point about performance evaluation is finding the most suitable method for an organization's culture, structure and employee profile. There is disagreement about the connection between performance ratings and 360 degree feedback scores in that the receivers who get high scores from their feedback are not really high performers (Maylett and Riboldi, 2007) . Notwithstanding some opposing arguments exist, the majority of authors in the literature claim that there is a correlation between multi-rater feedback and performance evaluations (Lepsinger and Lucia, 1997; Gallagher, 2008; Carter et al., 2005) . Additionally, there is a suggestion that some of the findings relevant to multi-source feedback are not pertinent to performance appraisals (Atwater et al., 2007) . What is 360 Degree Feedback? 360 degree feedback is also known as full-circle appraisal, multi-rater feedback, multi-source feedback, upwards feedback, group performance review, 360 degree appraisal, 540 degree feedback, all-round feedback, and peer appraisal. According to Ward (2004) all these terms convey the same meaning. Lepsinger and Lucia define 360 degree feedback method as 'the feedback process which involves collecting perceptions about a person's behaviour and the impact of that behaviour