Performance reviews shouldn't just be annual meetings – they should be opportunities for development and coaching.
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Shockingly, only 52 percent of companies conduct annual performance reviews. However, there are many approaches a company can take when delivering employee feedback. One growing option is 360-degree feedback.
When you first hear the term "360-degree feedback," you may feel overwhelmed. It can be a lot of information to handle, and it may sound complicated. Getting your employees used to a 360-degree review process may also take a little effort, but it will ultimately be worth it.
Here are the basics when it comes to 360-degree feedback success:
Understanding 360-Degree Feedback
When it comes down to it, 360-degree feedback is exactly what it sounds like – feedback from around the circle. It is a system or process in which an employee receives feedback from multiple sources. These sources are typically colleagues, direct reports, and managers. A 360-degree review will often also include some form of self-evaluation. The goal of this process is to allow the entire team to help each other develop skills and address any potential weaknesses.
There are multiple benefits when transitioning to a 360-degree feedback system, including the following:
1. Open Channels Of Communication
Adopting the 360-degree feedback system allows employees in the company to comment on each other's work. This fosters a communication-rich environment in which it is easy to address and resolve problems.
The overall communication process is improved, and issues that could potentially cause problems are often solved before they cause any damage. Effective communication makes an organization 4.5 times more likely to retain its best employees.
2. Better Feedback From Multiple Sources
Receiving feedback from peers, supervisors, and oneself allows for a more well-rounded and substantial review compared to a process that relies on feedback from just one individual. Employees are able to receive feedback more frequently, and peer feedback is just as beneficial as feedback received from superiors. In fact, 88 percent of employees who receive peer feedback are happier with their jobs.
A 360-degree review also allows trends and patterns to become clear. For example, let's say an employee is always looking for different ways to help other departments and collaborate. While a supervisor might not have seen any of this, colleagues from these departments would be able to praise the employee for their hard work. In this case, a 360-degree feedback process allows team members to recognize good work that may have otherwise gone unnoticed.
3. Team Development
The 360-degree feedback approach helps team members work more effectively together. Team members who give each other feedback create a sense of accountability when providing their input on each member's performance. A well-implemented 360-degree system can allow for improved team communication and development. Team communication is important, with 33 percent of employees saying a lack of open, honest communication has the most negative impact on employee morale.
4. Career Development
A 360-degree feedback process provides employees with excellent information about what they need to do in order to further their careers. It also keeps them engaged in their current roles: 98 percent of employees say managers who give them little or no feedback fail to engage them. A 360-degree process gives an employee many opportunities to learn what they are doing well and how they could improve.
What Are the Downsides of a 360-Degree Review?
For all the benefits, a 360-degree review process also has its downsides. It is important to understand these shortfalls because they can offer us a map of what to avoid when practicing 360-degree reviews.
1. What an Employee Decides to Do After the Process
In order for the 360-degree review process to be successful, an employee must be able to do a few things along the way. It can be overwhelming to receive large amounts of feedback all at once. If the information is to be useful, an employee must be able to understand the feedback, process it, and determine next steps.
Taking a microfeedback approach might be able to help here. Integrating this process into a complete performance management system makes employees accountable for following up and acting on the feedback provided by others.
2. Focusing on What Is Wrong
People tend to focus on the negative remarks rather than the positive during performance reviews. That means many employees focus on fixing their weaknesses. While it is important to address performance shortfalls, employees should also pay attention to the positive aspects of their reviews. Maximizing one's strengths has been shown to be rewarding, and it will certainly advance your team in the right direction.
A reported 25 percent of employees leave organizations due to lack of recognition. Try to emphasize the positives while giving feedback in the 360-degree review process. (Make sure to address weaknesses as well!) Encouraging employees to pursue their strengths will help counteract negative feelings.
3. Sticking to the Process
A 360-degree review is not a one-time event. This process should be implemented on a regular basis. Building a strong feedback culture can help when implementing 360-degree reviews.
Try to make feedback a daily habit. Then, when it comes time for the routine 360-degree feedback, the review process will be easier to implement and employees won't be overwhelmed. Use the feedback to create an action plan, and you will start to see an employee-driven process.
Every performance feedback system has its potential pitfalls, and the 360-degree process is no different. However, it can create a positive and powerful problem-solving environment when carried out correctly.
The 360-degree process can help increase employee engagement, company morale, and productivity levels. Given that only 32.5 percent of U.S. employees report being engaged at work, it may be time to take a chance on going 360!
A version of this article originally appeared on the iRevü blog.
Michael Heller is the CEO and founder of iRevü.