In this era of complete total quality enhancement, organizational learning, business process reengineering and downsizing, performance assessment has become the chief tool for reckoning workplace activity and documenting behaviour change (Allan H. Church, Janine Waclawski, 1998). One such tool is multi-rater feedback also knows as the 360-degree feedback. In simple words, 360-degree feedback can be defined as a “systematic collection and feedback of performance data on a number of a stakeholders on their performance” (Peter Ward, 1997). It is a process, which encapsulates input from an employee's colleagues, sub-ordinates, supervisors, and probably, customers. It provides insight about the skills and behaviours desired in the organization to accomplish the mission, vision, and goals and live the values. The purpose of 360-degree feedback is to assist each individual to understand his or her strengths and weaknesses, and to contribute insights into aspects of his/her work needing professional development. It can be best defined as “a process comprised of many elements; the most salient of these being the use of multiple evaluation sources, varying along hierarchical levels (e.g. peers and/or subordinates) and organizational positions (e.g. customers) (London and Smither, 1995; Dunnette, 1993; Tornow, 1993).
Though 360-degree feedback adds significantly to the money, time and complexity to the appraisal administration process, it has been employed by a large number of SME's (small and medium sized enterprise) and multinational companies. The rapidly increasing list of 360-degree feedback users (currently) include pioneers of the corporate sector such as PWC, AT&T, General Electric, IBM. According to London and Smither (1995), virtually all the 500 fortune companies are now using 360-degree feedback appraisal system and the number of organizations using the 360-Degree programmes in the United Kingdom is increasing on a very fast pace (handy et al, 1996; Geake et al, 1998, toolan, 1998). Advocates of 360-degree feedback consider it as a valuable tool and it is perceived by them as fair, objective and reliable as it comes from multiple perspectives.
STATEMENT OF PROBLEM
Though the idea is not new (Edwards and Ewen, 1996), the debates are still going on regarding its effectiveness. According to Jorritsma and Naald (2004), numerous studies have been done on this question concentrating on the applicability of the methods and on the reliability of feedback tools for selection purposes (Hedge & Borman, 1995), to assess training effects (Jellema 2003) and evaluation of cultural changes (McLean 1997). In spite of the fact that 360-Degree feedback tool seems to have good interrater reliability and internal consistency, the question that whether it improves the user's performance remains unanswered (Van Veslor, Taylor & Leslie, 1993). Numerous studies are present to aid administrators in the implementation of 360-degree feedback. However, very little research has been done on recognizing ways to enhance the overall 360-degree process. this research analyzes individual and organizational processes within the 360-degree feedback that encourages or discourages the development process. It will further help in identifying the elements that supports the change in behaviour following the assessments.
RELEVANCE OF THE RESEARCH
This research study explores these issues by tracking the responses of the employees of various organizations in different sectors. However, in this research rather than presenting the views of the sponsors, I am seeking to solicit the views of the participants who have previously participated in a 360-degree feedback programme. I am going to focus on ‘the user', which is a less frequently explored but a significant aspect of feedback at least in practice. I believe this research will be helpful in determining the factors, which encourage an individual's willingness to change his or her behaviour during the developmental process, which in turn will help in designing a better system, which will ultimately accomplish its goal. The results of this study may be beneficial to the field of Human Resource by recognizing the various areas of the 360- Degree process that affected the results in the development.
OBJECTIVES are to find out the answers to the following questions:
1. On the whole, 360-degree feedback's contribution towards development of skills of the employees.
2. The contribution of various aspects and parts within the 360-degree feedback process towards employee skill development.
3. The employee's reaction towards the results of 360-degree feedback under the following heads:
a. Acceptance of the results.
b. Willingness to alter behavior for the better or the worse.
c. Results effected due to the feedback.
Employee's perception of the effectiveness of the 360-degree feedback will be positively related to the received organizational support and favorable overall ratings.
The chapter reviews the current literature on 360-degree feedback. It presents significant theories to validate the notion that multi-rater feedback or 360-degree feedback can be used as a technique to positively impact employee skill development. The chapter describes the effectiveness of 360-degree feedback, following the relevance of the various elements within the 360-degree feedback that facilitates employee skill development. Furthermore, the chapter describes how users or participants react to 360-degree feedback and what factors aid in enhancing their behaviour change and skill development.
The literature review presented here is a Thematic Literature Review based on the three objectives of the research.
2.1 Contribution of 360-degree feedback towards providing improving employee's behaviour and skill development
In the last decade, 360-degree feedback has been one of the most eminent and contentious movements in the sphere of human resource as a tool for improving employees' behaviour and skill development. It is estimated that in the United States, over one-fourth of the organizations are using some form of multi-source feedback system (Antonioni, 1996) and recent studies suggest that this practice is still gaining immense recognition (Rose and Walsh, 2004; Brutus and Derayeh, 2002).
As a process, multi-rater or 360-degree feedback sits alongside a number of other processes used in organizations to harness the potential of the individuals. It draws attention on specific strengths of each, bringing them together to a new form. The initial purpose for using 30-degree feedback was to enhance the personal growth of the high promising executives. However, later it extended as a tool for development to other layers of management. In a research of the members of the Society of Human resource Managers concluded that in 35% of the organizations, 360-degree feedback was used chiefly for executives, and in 37% of the organizations, it was used for upper middle managers (Rogers, Rogers, Metcalf, 2002). First and middle-level managers were also included in the process, but to a lesser degree (Ghorpad, 2000). Various studies have been done to documenting the benefits organizations gained from implementing a 360-degree process. In an initial study of 145 global organizations, more than 21.5% of the organizations regarded 360-degree feedback to be high of benefit, 57% found it to be moderate benefit, and the rest 21.5% found it to be low of benefit (Rogers, Rogers, Metlay, 2002).
A study surveyed a group of 360-degree participants in order to determine his or her satisfaction with 360-degree feedback one year after it was completed (Nowack, 2005). It was concluded that 87% of the participants believed that 360-degree feedback provided helpful insights and had increased awareness of his or her strengths and development needs. Whereas, 69% of the participants reported that the results were expected to a high extent even if the rating was low. 76% of them stated that they were likely to make a change as a result o receiving the feedback. Moreover, 73% reported that there was improvement in his or her behaviour following their participation in the 360-degree program.
Therefore, literature suggests that overall, 360-degree feedback has made a considerable contribution towards improving employee's behaviour and their skill development.
2.2 The contribution of various aspects and parts within the 360-degree feedback process towards employee skill development.
Combination of various elements determines whether the developmental process and follow-up support leads to a long-lasting positive behavioural change for the organization as well as the individual (Hazucha, Hezlett, Schneider, 1993). One of the prime factors that contribute to the successful implementation of 360-degree feedback is that the organizations should have a crystal clear idea of the purpose of the use of the feedback (Lepsinger and Lucia, 1997). Various organizations vary in their approach to 360-degree feedback. However, an organization considering implementing 360-degree feedback must agree on its purpose (Carlson, 1998). Since beginning, most of the 360-degree feedback applications have been used in a developmental context. However, more recently there has been a remarkable shift towards using it as a direct input to appraisal (Fletcher, 2008). The literature indicates that 360-degree feedback is more effective in a developmental context than in appraisal context. Antonioni (1996) believes that 360-degree feedback is most useful in performance appraisal when it is used for goal setting. 360-degree process can result in confusion as a development tool and cause a potential negative reaction in participants if linked with the appraisal process (Ghorpard, 2000). Moreover, 360-degree feedback when linked with performance rating and compensation is perceived by many participants as unfair (London, Smither, 1995).
Therefore, it can be concluded that if used inappropriately, 360-degree feedback can pose for challenges and threats for the individual as well as the organization and may result in disharmony in the organization.
The notion that feedback in itself is enough for development to take place is deceiving (Garavan et al, 1997). Various researchers have emphasized the relevance of follow through as a vital aspect on the 360-degree process (Farh, J. and Werbel, J.D., 1986,; Hazucha, J.F.Hezlett, S.A.& Schneider, R.J., 1993; Fedor, D.b.,Rensvold, R.B.and Adams, S.M., 1992) (18, 20, 29). Ensuring that the supervisor and the organization are involved in the follow through process i.e. ongoing coaching, training and development plans, will result in both personal as well as organizational development (Garavan et al, 1997; Carson, 2006). This idea is also supported by Hazulcha et al (1993), who found that individuals who perceived support from their supervisor stated increased effort in their development activities. They further state that the supervisor should offer support and coaching and the managers should be rewarded for taking this development initiative by the organization.
Rater fairness and Confidentiality affects the participant's ability to accept feedback. According to Romano (1994), anonymity and confidentiality is crucial for comforting employees. It can be a death knell if the anonymity and confidentiality is compromised or has been perceived as compromised. It has been suggested that it should be nailed down in at the outset which data is anonymous and which is confidential (W.Scott and Nowack, 1998.) Veslor et al (1993)) suggest that ratings may be inflated if the participants are conscious that their responses are not confidential. In a study conducted by London et al (1990), 24% of the respondents indicated that if the feedback had not been anonymous, they would have differently rated their peers or boss. London and Beatty (1993) emphasize that an external consultant should be employed to analyze the data and prepare the results. London et al (1990) and Bracken (1994)) have also advocated the use of an outside third party consultant.
2.3 The employee's reaction towards the results of 360-degree feedback under the following heads:
1. Acceptance of the results.
2. Willingness to alter behaviour for the better or the worse.
3. Results effected due to feedback
The other factor that is critical to the effectiveness of the 360-degree feedback is the employee's or the participant's reaction towards the 360-degree feedback (Nowack, 2005). How a participant accepts his or her feedback and how he or she is willing to participate in a follow-up programme is influenced by his or her reaction to 360-degree feedback Smither, London, Reilly, 2005).
According to Nowack (2005), it is very crucial for the organization to understand how the participant reacts to he 360-degree feedback and the impact of feedback on his or her behaviour either negatively or positively. Acceptance of feedback is significant to the 360-degree feedback process and it should be provided in a non-threatening way. If the participants consider the situation as taxing, he or she may respond negatively in denial or emotional outburst (Carver, Scheier, & Weintraub, 1989). Nowack (2005) further points out that participants often view the ratings provided by peers, subordinates and managers negatively and may demonstrate emotional reaction if the feedback is less than what they had expected or if it is used in contexts other than development context. it has been reported that leaders who received negative feedback felt discouraged and reacted with rage, whereas, the leaders who received positive feedback did not respond with anger (Brett and Atwater, 2001). Negative feedback is the conundrum of feedback. When it is delivered, it often leads to responses just opposite to what is desired. Even though the information about the negative feedback or the performance that falls short of the standard is essential, it is inadequate for motivating a person to improve. However, it has been reported that reactions to negative feedback often do not lead to desired outcomes of improving performance even if the person is capable of better performance (Ilgen & Davis, 2000). Even the best intentions to stimulate performance improvements with negative feedback seldom works that way (Kluger & Denisi, 1996) rather it often leads to opposite effect. Furthermore, they suggest that extreme negative feedback leads the participant to abandon his or her goal.
A meta-analysis of 24 longitudinal studies illustrated that improvement in direct report, supervisory and peer ratings is minute over-time (Smither, London, Reilly, 2005). London and Smither (2005) presented a model in order to suggest directions for upcoming research. They believe that eight distinctive features that help in determining the degree of change in behaviour and improvement in performance following 360-degree feedback are “1) characteristics of the feedback, 2) initial reactions to feedback, 3) personality, 4) feedback orientation, 5) perceived need for change, 6) beliefs about change, 7) goal setting, and 8) taking action”. It has been suggested that improvement is most likely to occur when “feedback indicated that change is necessary, recipients have a positive feedback orientation, perceive a need to change their behaviour, react positively to the feedback, believe change is feasible, set appropriate goals to regulate their behaviour, and take actions that lead to skill and performance improvement” (Smither, London, Reilly, 2005).
SUMMARY OF LITERATURE REVIEW
Literature suggests that there are several factors associated with the effectiveness of 360-degree feedback, which must be recognized with respect to the use of 360-degree feedback as an efficient tool for improving employees' behaviour and skill development. If used properly it can brighten up the future any organization but if it is used inappropriately, it can result in crisis. Organizations, which use 360-degree process, should understand the factors that may have an impact on participants' reactions to 360-degree feedback, willingness to change their behaviour and acceptance of feedback. Previous Research conducted on 360-degree feedback suggests that further research is needed to analyze the above-mentioned factors. If the organizations have a clear idea of the above-mentioned factors, they will be able to benefit more from 360-degree feedback processes.
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