Often times our clients ask us if it is a best practice to integrate a 360 assessment process with the annual performance appraisal process. Our consistent answer over the years has been to tread very carefully if you are about to embark on an integrated process, or even better, intentionally separate the two processes.
First, let’s look at the intended purpose of each tool.
The performance appraisal is an evaluation used to determine results, purposefully designed to measure and evaluate an individual’s contribution to the organization in terms of results. Often time monetary rewards are tied to the appraisal. Performance appraisals provide the employee with a clear picture and measurement of the performance goals that were met. However, in the absence of clear goals, managers are forced to measure other things. What often times gets measured are attitudes and behaviors.
The 360 feedback process is designed to identify, measure, and develop skills, competencies and behaviors related to an individual’s job. It is more about how they are going about getting results. Competencies often rated via a 360 are those found in the Emotional Intelligence bucket. Skills like relatability, empathy, resolving conflict, teamwork, generous listening, leadership, etc. Some tools can assist in identifying attitudes and thinking patterns that drive behavior. Performance appraisals in contrast, are meant to measure outcomes and results.
Performance appraisals indicate if an employee has been successful, and 360 Feedback informs us if an employee as been effective.
Performance evaluation and employee development are separate and distinct processes with different purposes and they do complement one another.
Linkage Can Cause Problems
Providing multi-rater feedback and perspectives is efficient and effective for development purposes. Using multiple raters for a performance appraisal can invite those that may be less able to provide objective and balanced perspectives to weigh in on an individual’s performance, and impact the overall rating of the appraisal. Often times well intended raters have a hard time separating honest observations from personal differences and/or biases. Ultimately, peers and direct reports are not always qualified to provide evaluative feedback that affects pay.
The following are some examples of the impact of linking the two processes:
- Unreliable data from raters who want to take a swipe at the person being evaluated can create unreliable performance appraisal results
- Increased suspicion around the performance appraisal and 360 tools and processes
- The effectiveness of each tool is diluted
- Employees may shift blame to raters due to poor performance appraisal ratings and lower merit increases and not choose to be accountable for behaviors that do indeed need to change
In the event you are tempted to link the two processes, before you do, ask the question: What is it that I am trying to achieve?
So, when our clients ask us about best practices in terms of performance appraisals and 360 feedback assessments, our answer is that performance reviews are best used to set goals and measure results. The 360 feedback tool is best used for developmental purposes resulting in creating a pathway for development. It is designed to help the individual change and grow. At the end of the day, we think that each tool is best used separately in order to be the most effective.
If you would like to learn more about how Fortis Leadership can help you or your leaders create a pathway for development through leadership coaching, please contact us.