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"Marked differences suggest that competencies are the key to good performance, and that the focused development of 360-degree feedback is likely to pay off. "

Peter Goodge

How to Manage 360-Degree Feedback

By Peter Goodge

The growth in popularity of 360-degree feedback is unsurprising. When done correctly, the technique is inexpensive, widely applicable and clearly focused upon personal performance.

But a number of these projects have been failures, and more seem to be going wrong. This is usually a result of the way they are set up and managed. The Whitbread Group has worked out a six-step plan for avoiding the pitfalls and ensuring that the process will be successful.

1. What is your strategy?

How do people need to change to meet that strategy? Is 360-degree feedback a cost-effective method of achieving this?

To achieve the maximum effect, 360-degree feedback projects should not stand alone, but be part of the company's strategic effort. Where such a project is not linked to strategy it is seen as "nice to have", but not essential. Senior managers will not support it as strongly as they should, and individuals won't see its relevance. Some recipients of feedback might change, and their skills might improve, but the net contribution that is made to the business will be small.

At the Whitbread Group, 360-degree feedback is helping directors to develop their skills and teamwork, supporting strategic programmes and developing high-flyers. The group is using it to launch newly revised competencies linked to the company's strategic mission, and to change behaviour and improve performance.

2. Carry out a formal review of the feasibility of a project before any work is undertaken.

There are three questions that should form an essential part of that review.

Are there significant differences between strong and weak performers?

Marked Marked differences suggest that competencies are the key to good performance, and that the focused development of 360-degree feedback is likely to pay off. If every individual is performing poorly, then inadequate resources, impossible objectives or widespread mismanagement may explain the problem, but 360-degree feedback cannot solve these. If poor management is the reason for the difference between good and poor performers, then it is the managers who need 360-degree feedback, not their staff.

Does each individual involved have at least six "customers" who are good judges of their performance?

In flexibly structured organisations, individuals often work independently, managers may have little contact with their staff and people in the same department may hardly know each other. In these circumstances, people complete feedback questionnaires poorly because they do not really understand the individual's performance. Real customers -- those who depend on that person's performance -- may be found in faraway parts of the business, or even outside it altogether. Without a minimum of six proper customers, 360-degree feedback won't produce a credible picture of the individual's true performance.

Can you support people's development with training, coaching, projects and other development processes?

Using 360-degree feedback can provide a new understanding of skills and training needs, but it will be a frustrating and pointless exercise if there is no programme of development to follow it up. Making individuals responsible for their own learning does not excuse the organisation from providing useful training and development resources. And you will need to support the development of each individual who receives feedback.

Many organisations mistakenly believe that investing in the software means they are buying the complete 360-degree process. It does not. We suggest that organisations should spend 20 per cent of the project's budget on the assessment and 80 per cent on the subsequent development support. Sadly, these proportions are reversed in many cases.

3.The 360-degree feedback questionnaire will measure your competencies and the questions are usually best taken directly from your behavioural indicators.

This strengthens its validity to the business and builds managers' understanding of your competencies. If competencies are ambiguous or woolly, they will produce ambiguous, woolly feedback. Feedback is a mechanical process that exposes and magnifies the smallest technical problems with competency sets. If the recipients seem confused or indecisive, it is almost certainly your competencies that are at fault.

To check your competencies, look carefully at their definitions and behavioural indicators. Are they really about one aspect of the job or two? If more than one indicator is involved, the results will be inconclusive. Do different competencies share similar behaviour indicators? If so, feedback will show only small differences and strengths, and development needs will be hard to identify. At Whitbread, for example, the indicator "the ability to develop and apply appropriate technical skills/specialisms" became two questions: "actively keeps up to date with developments in his/her specialism", and "adds real value to business decisions with his/her technical skills".

Avoid long questions and qualifiers, or double negatives, and don't use questions that ask about results rather than behaviour. Also, ask for some critical feedback. If you don't do this, almost everyone will get huge amounts of praise and very little criticism. Brewers Fayre, part of Whitbread, solved this by demanding at least 10 critical answers from each respondent. This made development needs easy to identify.

4. Piloting the 360-degree feedback process is surprisingly helpful.

A pilot will provide information about the practical problems, how well respondents answer, which questions don't work, how helpful the feedback reports are and much more. For example, piloting helped Whitbread to discover that averages and graphs often removed key information from the report, because they masked differences in individuals' perceptions, so it replaced these with direct representations.

Trying out the whole process with a dozen or so representative individuals is a good test. It is important to pilot the whole process, because simply testing the questionnaire and software will not check the feedback, development planning and management support aspects. Those involved need to be representative of different parts of the business. Strong performers don't react to 360-degree feedback in the same way as average and poor performers -- and neither will different parts of your business.

5. Start where it is easy.

Some initial resistance is almost inevitable. Managers may claim the process is pointless and will add no value. Secretly they may feel that their management is under scrutiny. The recipients of feedback are often understandably nervous about having their weaker areas exposed. Subordinates worry about the implications of being critical of their managers and say they can't be completely candid when completing the questionnaire.

Well-managed 360-degree feedback will remove these concerns quickly. Recipients of feedback appreciate the huge benefits and no longer feel threatened, and respondents discover that critical questionnaire answers don't result in witch-hunts.

Easy starting places will be receptive parts of the business -- probably those that are used to discussing and improving personal performance. Or perhaps departments with acute problems suited to 360-degree solutions. You could ask senior managers to show a lead - the board of TGI Fridays asked for 360-degree feedback before their staff.

Or you might try packaging the process differently, for example, by incorporating it into a training course. Doing so usually means there is a controlled and supportive context. Whitbread introduced the process through its middle management development centre. This offers lots of supportive, yet honest, feedback, and a great deal of help in planning and managing personal development.

Start small, with a few groups of individuals, and roll out the process gradually. This enables you to manage the planning and support workload as it grows, and to build "corporate experience".

6. For feedback to work really well, it has to be understood and accepted not only by the subject, but also by their manager.

And the feedback has to lead on to an agreed action plan that is supported by the company. None of this is surprising -- the surprising thing is the number of companies that don't do it.

Best practice is for the individual recipient of feedback and their manager to work through the feedback report together. They can then agree strengths and development needs, and put the feedback in a work context. You will also need to provide both of them with a simple, yet innovative, method of action planning to improve performance. And, establish an effective review and replanning process.

Whitbread's middle management development centre initially provides input on the 360-degree feedback report's format -- how to interpret it and how to check it. Candidates and their managers then work through this report together and agree their findings. We learnt to provide only one copy of the report in order to ensure that the pairs work together. Lastly, candidates and managers design the first of a series of short, practical action plans. These plans are reviewed .with senior management mentors after three months, renewed, and reviewed again.

Best Practice

We suggest that organisations should spend 20 per cent of the project's budget on the assessment and 80 per cent on the subsequent development support.

360-degree feedback checklist

Link 360-degree projects to business strategy.
Conduct a feasibility review to make sure 360-degree feedback is the right tool to improve performance, and that organisational conditions favour its use. Ask the following questions: Are there significant differences between strong and weak performers? Does each individual have at least six "customers" who can report on their work? Can you support development for all those receiving feedback?
Check that your competency definitions and behavioural indicators exactly specify the performance you need to measure.
Run a pilot and use the results to adjust the process accordingly.
Start where there is least resistance, or where the process can be introduced in a controlled way.
Make sure that the managers of those being assessed also understand the process.
Agree action plans based on the reports and follow these up with reviews and development.

The psychology 360-degree appraisals

Research conducted jointly by the IPD, the British Psychological Society, the Department of Trade and Industry, the Roehampton Institute and SHL suggests that individual differences are crucial in delivering and responding to feedback ("The Feedback Project", see Further reading panel, below). Other issues to consider include:

To what extent has the role of feelings been considered in managing the 360-degree feedback process?
Are those giving the feedback aware of the role of personality and the importance of tailoring feedback to the individual?
Is the process designed to ensure that the feedback is trustworthy? Issues to consider here are the confidentiality of the feedback and the degree to which the individuals are free to choose their own "raters".
Is the process designed to ensure the feedback provides useful information? Using an appropriate 360-degree instrument is critical in ensuring the individual sees the information as constructive and as providing new and useful information.
Does the organisational culture provide support for career development? If not, individuals will be less likely to be motivated to change.

Best Practice

Ask for some critical feedback. If you don't, almost everyone will receive huge mounts of praise and very little criticism.