Why This Book?

In our role as consultants, we have done in-depth research in the field of 360-degree feedback for over twenty years. During that time, we developed several questionnaires that measure leadership competencies and influencing skills; we designed customized 360-degree instruments for a broad spectrum of clients and managed and administered 360-degree feedback processes for such organizations as Coca-Cola, Bayer, New York Life, and GE Capital. Our work has taught us a great deal about helping people achieve individual and organizational growth through the effective use of 360-degree feedback. This book is our way of sharing what we have learned, so you can make the best decisions about your own use of this important tool.

We have focused on answering the questions heard most often from the human resource people, line managers, and participants involved in the process: How do I know if 360-degree feedback is the right tool to address my business’s needs? Where do I start if I want to use 360-degree feedback in my organization? Will a 360-degree process purchased from a supplier get at the unique nature of my organization, or should I develop a system in-house? How can I get people’s support for the process? How can I ensure that the feedback will be kept confidential? What is the best way to keep the process alive?

How 360-Degree Savvy Are You?

Although articles describing the potential benefits or pitfalls of using 360-degree feedback have appeared in countless business and professional journals, many people are still unclear about what it is and how it can be used most effectively and, as a result, many organizations are not taking advantage of 360 feedback as a tool to enhance leadership or organizational performance. In 1996, as part of our preparation for a speech to the New York Metro Chapter of the Society of Human Resource Managers, we asked its members, “What best describes your company’s use of 360-degree (multi-rater) feedback?” While 21 percent reported some experience working with 360-degree feedback, almost an equal number did not even know what it was. In preparing for the revision of this book in 2008, we surveyed 1,876 line managers and 550 human resource managers about their use of 360. To our surprise, we found that only 12 percent of the line managers reported that they had participated in a 360 process, and only 15 percent of the human resource managers reported that their companies had used 360, with 28 percent of those companies reporting that they were not using it actively at the time of the survey. And in informal discussions with respected providers of 360 feedback such as DDI, Korn/Ferry, and PDI, it appears that anywhere between 9 and 20 percent of the Fortune 500 have engaged in a 360 initiative involving a moderate level of continuing participation over the period of the last two years.⁴ Based on this data it appears that many organizations have not yet realized the benefits of a 360 feedback process.

Before we move into a discussion of the ABCs of 360-degree feedback, take a moment to assess your own know-how on the subject. How prepared would you be to talk about this kind of feedback with your boss or colleagues so that an informed decision could be made about using it in your organization?

The questions that follow are ones you should be able to answer in some depth if you are going to become an advocate for 360-degree feedback. Read them over, and ask yourself how confident you are of your ability to discuss these issues persuasively.

1. What is 360-degree feedback? How would you define it?

2. What benefits would the organization and individuals realize from this process?

3. What kind of information is collected about people in the 360-degree feedback process? What are the different ways to collect 360-degree feedback? Which would you recommend?

4. For which organizational levels in your company is 360-degree feedback appropriate? Will people be required to participate? How can you allay their anxieties?

5. What methods can be used to present people with the feedback that has been gathered and to help them interpret the data? Which method would you recommend?

6. How can you ensure that people will take action on the feedback they have received and that ongoing progress is made?

7. How would you roll out a 360-degree process?

8. What resources do you need to make the effort a success?

9. What are the possible pitfalls involved, and how might you avoid them?

If you feel you can answer most of these questions without difficulty, you have a good working knowledge of the topic and are ready to begin your campaign for the use of a 360-degree feedback process in your organization. This book can be a resource to you as you develop and implement your strategy. If you feel you need to broaden and deepen your understanding of the issues before you can be a truly effective advocate, you should probably read this book in its entirety. And if you can give only sketchy answers, or none at all, to some of the questions, we are here to launch you on your journey toward becoming 360-degree savvy.

What Is 360-Degree Feedback?

The feedback process we discuss in this book involves collecting perceptions about a person’s behavior and the impact of that behavior from the person’s boss or bosses, direct reports, colleagues, fellow members of project teams, internal and external customers, and suppliers.

Other names for 360-degree feedback are multi-rater feedback, multi-source feedback, full-circle appraisal, and group performance review. The term “360-degree feedback” has come to be synonymous with feedback from multiple sources, even though the data may not be gathered from every possible source. We will use the terms 360-degree feedback and multi-source feedback interchangeably throughout.

A Short History of Feedback

There is nothing new, of course, about people getting feedback on their behavior and productivity. Initially, however, this feedback came from the individual’s supervisor or the owner of the business. Descriptions of working conditions at the turn of the 20th century indicate that it was not unusual for feedback to be focused primarily on productivity and to be given at the whim of the boss and, more likely, only when things were not going well.

In the early 1950s, two ideas helped shape both the content of the feedback that people received and the way in which it was given. The wide acceptance and application of management by objectives helped to formalize and focus the feedback process. Bosses and workers were now able to establish and work toward specific productivity targets. At about the same time, research on employee motivation revealed that both productivity and job satisfaction increased when people received information regularly on how close they were to performance targets and what exactly they were doing that kept them on or off track. Consequently, periodic performance review meetings between individuals and their bosses became the norm.

Such “downward feedback,” while a valuable tool for monitoring performance and clarifying the behaviors that were contributing to a certain level of productivity, provided only one perspective and was necessarily limited. Furthermore, research has shown that a boss’s evaluation may depend more on unit performance than on observations of the individual employee’s behavior. In addition, if not handled effectively, or if the boss and direct report disagree about results and the cause of poor performance, these discussions can have a negative effect on employee motivation.

During the mid-1960s and early 1970s, academics and practitioners began exploring the question of how to provide people with a broader and more accurate picture of their performance. Researchers began to investigate the effect of feedback from direct reports—those most directly affected by the boss’s behavior—on managerial performance. Several studies substantiated the hypothesis that the perceptions of direct reports about a boss’s behavior were accurate and had a positive impact, once the manager learned how others perceived him or her. For that reason, companies like IBM have been incorporating feedback from direct reports into their performance discussions for more than thirty years.

In the mid-1980s, a study was conducted by the Center for Creative Leadership—a not-for-profit research and training organization headquartered in Greensboro, North Carolina—and the researchers’ conclusions about management development are described in two books. One was written by Morgan W. McCall, Jr., Michael M. Lombardo, and Ann M. Morrison and entitled The Lessons of Experience: How Successful Executives Develop on the Job⁵ The other—Key Events in Executives’ Lives—is by Morgan W. McCall, Jr., Esther Lindsey, and Virginia Homes.⁶ These books helped get the idea of upward feedback into the mainstream.

Says Randall White, who was at the Center for Creative Leadership for fourteen years, “The work we were doing at the Center on the development of senior executives made it clear to us that people’s assessment of an individual varied depending on whether they were a boss, a peer, a direct report, or a customer. Our research also showed that people learned from experience—the events in their lives served as a classroom.”

Three key findings of the study focused people’s attention on the value of 360-degree feedback. The first was that feedback is an important element of a person’s professional and personal development. The second finding showed that the most effective executives were learners—they made everything into a learning experience. The third finding was that many people in organizations operated in feedback-poor environments.

In the case of middle and senior managers in particular, it was recognized that they often received very little feedback on their day-to-day performance; in many cases, they were evaluated in terms of financial results alone. Their personal development needs were seldom, if ever, addressed. But in the 1990s, two trends once again contributed to recognizing the importance of 360-degree feedback—increasing competition and the renewed focus on the customer.

The traditional hierarchical structure of most organizations had always made for a cumbersome approval process and limited sharing of information. As organizations attempted to succeed in an increasingly competitive environment and meet the expectations of a better informed and more demanding customer base, these weaknesses made it difficult to take advantage of new opportunities and respond quickly to changes in the marketplace. Therefore, many companies began evolving toward flatter structures that required communication and teamwork across organizational boundaries and empowered people at lower levels of the organization to make their own decisions. As this evolution progressed, organizational structures that had been designed to ensure that businesses and functions would be self-sufficient were replaced with structures that encouraged interdependence.

The result of these changes, and of the downsizing that has taken place in many companies, has been that managers at all levels often have more people reporting to them than ever before. In many cases, they are also required to work more closely with people in other parts of the organization over whom they have no direct authority but with whom they are expected to achieve results. In such circumstances, they are unlikely to witness an individual’s behavior personally for more than a few hours a week, and vice versa. Thus, the traditional forms of feedback, both downward and upward, yield less useful information than before.

Finally, neither upward nor downward feedback includes the perspectives of a significant population—colleagues, members of project teams, other senior managers, and customers—who depend on and are affected by the behavior of a given manager. These people are also in a position to observe a wide range of behaviors that might not be apparent to a direct supervisor or a direct report.

By including colleague feedback, insight can be gained into how the manager behaves in team situations; as teamwork becomes increasingly important for achieving organizational objectives, this information becomes key. Colleague feedback can also give unique insight into the use of influencing behaviors that serve to gain commitment when no direct authority can be exercised. At the same time, colleague feedback helps to foster and encourage teamwork by making employees aware that it is not just the boss’s expectations that are significant.

Feedback from customers and others outside the organization can provide yet another valuable perspective, since they are in a position to judge the extent to which an individual’s behaviors add value for the company. Their input can also serve to clarify any conflict the manager may be having between responsibility to the company and to the external client. In this way, barriers to responsiveness may be illuminated.

Fast forward to the challenges of today and tomorrow. In “The Changing Nature of Leadership,” an article published by the Center for Creative Leadership in 2006, Andre Martin identified several factors contributing to a required shift in leadership. Shifting competitive bases, globalization, increased expectations from various stakeholders, drive for innovation, and a need for reinvention will require aspiring and current leaders to respond to their external environments as well as their internal, or organizational, environments in new ways. And, within the last decade, rapid changes in technology have had an enormous impact on how people interact, the speed with which they work, and those people to whom they have access. Whether it is through the development of new skill sets, being more flexible and adaptable, or better leveraging diverse voices, individuals and organizations will need to know the degree to which they are effective in their work and roles.

All of this leads us to 360-degree feedback. By gathering information from many different people, it provides a complete portrait of behavior on the job—one that looks at people from every angle and every perspective, in their roles as direct reports, team members, managers of both internal and external relationships, and sources of knowledge and expertise. It is like having a full-length portrait, a profile, a close-up shot of the face, and a view from the back all in one.

When feedback from all these sources is presented within a framework that gives people the chance to practice key behaviors and plan for improvement, it can serve as a lever to bring about real, measurable changes in people’s behavior. Empirical research, as well as anecdotal evidence, has shown that 360-degree feedback can lead to improved performance in the areas evaluated.⁷

What Kind of Information Is Collected?

A 360-degree feedback process can be used to gather information on an individual’s skills, knowledge, and style. Because there is a lack of consistency about exactly what these terms mean, we have provided working definitions in Exhibit 1.1.

Your decision about which type of information to collect will depend on several factors—the business or leadership problem or opportunity to be addressed, the role and level of the individual who will receive the feedback, and the organization’s norms and values regarding what is considered acceptable and appropriate.

Exhibit 1.1 Working Definitions for the Types of Data Collected by 360-Degree Feedback

The most useful questionnaires request feedback about specific behaviors rather than asking for general judgments. For example, instead of asking, “Is this person an inspiring manager?,” the questionnaire might ask, “How often does this person present a clear and appealing vision of what can be accomplished with my (the respondent’s) cooperation and support?” By phrasing the items in terms directly relating to the person providing the feedback, you avoid asking the respondent to hazard guesses about the manager’s behavior toward others. Furthermore, the individual receiving the feedback will get a clear picture of which specific behaviors need to be changed or used more or less often.

Ideally, respondents should have a chance to rate not only how frequently and effectively each behavior is used, but also its degree of importance to them. Such information helps the individual receiving the feedback decide which behaviors it is most crucial to focus on when the time comes to map out a development plan.

How Are the Data Collected?

The most common methods for gathering feedback data are questionnaires and one-on-one interviews. Let us take a look at how each method works.

Questionnaires. Compared to just ten years ago when the vast majority of our clients used paper-and-pencil applications, over 90 percent of those who participated in our survey reported they collect questionnaire data either electronically or online. Questionnaires, which generally take the form of a series of multiple-choice questions, ask people to assess an individual’s behaviors and actions in certain key areas. Some questionnaires also include open-ended questions that give respondents a chance to make comments or observations on subjects of their own choosing. There are hundreds of questionnaires on the market today, and identifying the one that will get at the things that are most important to you and your organization is no small feat. The questionnaire you choose will depend, in part, on what type of data you want to collect.

Fortunately, there are several resource guides available that provide descriptions of the most widely used instruments. One of the best guides—Feedback to Managers: A Review and Comparison of Multi-Rater Instruments for Management Development—is published by the Center for Creative Leadership. Feedback to Managers specifies which questionnaires collect data on job-related skills. And, Resource A at the end of this book provides examples to give you a head start in your thinking.

Ideally, if you are using questionnaires, the process of administering them will include these basic steps:

• People are informed about why the data are being collected and how the information will be used.

• People receive a notification electronically asking that they identify raters.

• The individual and all raters complete the questionnaire and submit it electronically; a feedback report is generated.

• Individuals review their results, often with the guidance of a trained facilitator; they analyze the information and determine what next steps would be most appropriate, based on what they have learned about themselves.

In a client organization where we were involved in their new 360 initiative, participating managers who had never had experience with multi-rater feedback found the questionnaire process to be straightforward and valuable. When “first timers” were asked why, they spoke about the importance of having the groundwork laid related to objectives and how the data would be used. This important step as well as a smooth administrative process enabled them to be open-minded to the experience. They also said that the instrument focused on areas that had real meaning to them given the organizational and business challenges they faced. All of this meant that they could realize the full potential of the 360 initiative—getting feedback from multiple perspectives and determining how that feedback could help them be even more effective in their roles. It also meant, at an organization level, that a large population could be moved through the process efficiently and effectively.

One-on-One Interviews. Ideally, if you are using individual interviews, the process will include these basic steps:

• As with the questionnaire process, the feedback recipient is informed about why the data are being collected and how they will be used.

• The feedback recipient helps determine what questions will be asked and who will be interviewed.

• The interviewer schedules and conducts the one-on-one interviews.

• The interviewer prepares a summary report that includes the key themes and patterns, with representative (but anonymous) quotes about the person’s behavior.

• The feedback recipient and the individual who collected the data and prepared the report meet to review the findings and discuss the next steps.

• The recipient creates a personal development plan that involves specific activities, target dates, and progress review points.

Individual interviews can serve as a stand-alone method of data collection or as a complement to the data collected by questionnaires. The interviews can be conducted at the same time the questionnaire is administered or as a follow-up activity to elaborate on or clarify the findings provided by the questionnaire.

Many practitioners believe that multiple data collection methods provide the best picture of an individual’s behavior. One proponent of this approach is David DeVries, formerly an executive vice president of the Center for Creative Leadership and presently partner of Kaplan-DeVries, a consulting firm that specializes in using 360-degree feedback for executive development. DeVries feels that “feedback should involve different sources and different modes or media. I would argue for the addition of interviews as an integral part of any 360-degree questionnaire method. When you hand out a questionnaire, you collect a certain kind of data that are helpful but tend to be more global. It’s awfully useful to complement that with interviews, which provide a very different kind of data. They don’t negate or contradict what is in the questionnaire but offer concrete examples.” Randall White agrees: “Interviews provide context, not just strengths and weaknesses. They flesh out the questionnaire data.” He adds, “But most organizations don’t have the resources to collect that kind of data.”

Where Is 360-Degree Feedback Being Used?

Although 360-degree feedback is used at all levels in today’s organizations, its most frequent use is with managerial populations, especially at the more senior levels. In our recent survey of human resource professionals, we learned that 60 percent use it for executive levels, 72 percent use it with senior managers, 71 percent use it with middle managers, and 31 percent use it with first-line managers. In addition, 41 percent said multi-rater feedback was used with individual contributors and 31 percent use it with administrative /support populations. Respondents were able to select all responses that applied, so it is safe to assume that several organizations use the technology with more than one level of their population. (This also explains why the percentages add up to more than 100 percent.)

We asked several heads of human resource functions and managers of training and development how their organizations decided which level of manager should be the first to receive 360-degree feedback. The decision appears to be strongly linked to the purpose of the 360 initiative. For example, when Eisai, Inc., introduced their Leadership Expectations, they started the 360 feedback process with the senior executive team. “We developed our leadership expectations to clarify what it means to be a leader at Eisai,” says Janis Lane, the senior director of human resources. “We knew that to manage the transition and hold people accountable for these behaviors we would need to integrate them into our performance management system and provide people with feedback on how effectively they were currently using these behaviors. We decided we needed to start at the top of the house and the senior team was more than willing to get behind the initiative and model the behavior they wanted from the rest of the organization. This sent a clear message that we were serious about the change and about holding people accountable.”

At Wilmington Trust their 360 process is a tool that supports development related to succession planning. It is used as a standard source of feedback in two high-potential leadership development programs targeted primarily at middle managers. “Our leadership excellence model outlines the competencies that are critical to creating the kind of company we want to be,” says Gail Howard, the senior vice president of human resources. “In the beginning we used the model in the form of a checklist to collect data from the boss on strengths and development needs of possible successors. We recently moved to an electronic questionnaire, which allows us to collect data more efficiently and from many more perspectives.”

American Express uses 360 with their high-potential entry-level vice presidents. “The 360 is part of a broader initiative called the Compass Program,” says Paul Leone, Ph.D., manager of assessment and evaluation. “The program participants get a pre- and post-test, which is intended to create self-awareness and provide insights for how to target their learning experience. The 360 data is also used as input for each individual’s development planning, and we also use the results of the pre- and post-test to measure the effectiveness of the program.”

How Is 360-Degree Feedback Being Used?

When asked, “What are the three most frequent uses of 360-degree (multi-rater) feedback in your company?,” 40 percent of the human resource managers in our survey responded that it was being used for individual development; 16 percent said to enhance team effectiveness, 11 percent said to facilitate culture change, 7 percent said to inform the performance appraisal process, and 6 percent or fewer said to identify individual or organizational training needs, to support the achievement of business strategy, to help make selection decisions, or as part of a coaching intervention.

Our survey also asked line managers who had participated in multi-rater feedback to identify what they believed was the purpose of the process (they could choose all that apply, therefore percentages don’t add up to 100). At the top of the list was individual development (61 percent), followed by to inform the performance appraisal discussion (46 percent), to enhance team effectiveness (33 percent), to identify individual or organizations training needs (28 percent), and to support the achievement of business strategy (24 percent). Fourteen percent or fewer said as part of a coaching intervention, to facilitate culture change, or to help make selection decisions.

In our own practice we have found development to be the most frequent use, but sometimes just as a starting point. We have seen a trend toward a broader use of 360-degree feedback, as organizations become more comfortable with the technology and become more aware of its potential to facilitate change. Having helped hundreds of companies solve a wide range of business issues, we have seen 360-degree feedback used effectively in a number of ways in addition to development. What follows is a list of applications for multi-source feedback that have proved effective.

To Achieve Business Strategy and Culture Change by Clarifying the Behaviors That Are Required to Support These Initiatives. Once an organization has clarified its strategic direction and determined its business objectives, a 360-degree feedback process can be a key element in refocusing the workforce to attain changed organizational goals through changing their behavior.

Real culture change can be achieved only by getting people at all levels of the organization to behave in ways that support the change. Leaders must both adopt new behaviors and encourage different kinds of behavior in others. People need to know not only what will be required of them in the future but how much divergence there is between their current behavior and future expectations.