How 360-degree reviews work

360-reviews (also known as 360-degree feedback) is a process typically administered by HR departments during the performance review process; typically employees are asked to answer a few questions about people they work with. This process is quite standard – nearly 1/3 of U.S. workplaces use this method in some form.

As you might imagine, this can be helpful, but it can also be extremely dangerous if implemented incorrectly. That’s why we put together this guide to 360-reviews for you.

At Friday Feedback, we’ve built tools for team leaders and executives to understand their team through continuous feedback (agile performance), and we aren’t fans of traditional 360-reviews for a variety of reasons. We’ll discuss the pros and cons of this process throughout the rest of this guide.

WHAT IS THE PURPOSE OF A 360-REVIEW?

The entire purpose of the 360 review is to collect a variety of viewpoints from a variety of people who interact with an employee on a continuous basis. The idea is that through multiple perspectives, patterns can emerge – all with the goal of helping the employee understand strengths (and where they might be able to improve in the future).

Typically 360 reviews are administered as part of an annual review, which tends to be tied to momentous career events like getting a raise or a promotion. 

HOW DO 360-REVIEWS WORK?

These reviews usually start with a selection of who will respond to questions for a particular employee. For example, let’s say I’m a middle-manager. Here’s what a list of people who leave feedback might look like:

  • My boss
  • My direct reports
  • Peers who have a similar role
  • (optional) key customers/accounts I work with on a frequent basis

Now that the select process is complete, each stakeholder (i.e. – the people listed above) will answer several questions on my performance. This involves open-ended questions, but traditionally includes a rating on a 1-5 scale.

360 Reviews

We’ve included some examples of open-ended questions that might be used during this process.

EXAMPLE OPEN-ENDED 360-REVIEW QUESTIONS:

  • What are [name]’s top three strengths?
  • What sets [name] apart in the organization?
  • What should [name] improve?
  • What should [name] start doing?
  • What should [name] stop doing?
  • What should [name] keep doing?
  • What is your favorite thing about working with [name]?

We’ve included the most helpful questions above. As you can see, we think the open-ended responses are the most valuable pieces of feedback that can be delivered (compared to a numeric score).

When the feedback rolls in, the responses are anonymized and I’m presented with a final report and instructed on areas that I can improve in the upcoming year.

So what don’t you like about this process?

PROBLEMS WITH TRADITIONAL 360-REVIEWS

There are two major problems with 360-degree performance reviews. Keep in mind, there are some great parts of this process, but also some major issues to avoid as well.

1.) RATINGS

The first issue is associated with the ratings being delivered on the 360-review. I’ll try to use a basic example first before diving into the science behind it.

360-review meme

Let’s look at restaurant reviews for a minute. Have you ever noticed that you rate things differently than someone you know? For example, you might think the coffee shop down the street is great because they serve your favorite coffee. Meanwhile, your friend thinks its mediocre.

The difference in the rating you might give on Yelp is partially a byproduct of the restaurant (quality of service, food, etc), but it’s also partially due to your taste (or personal preference).

Put simply, a piece of the rating is based on your personal preference, which is biased.

What I described above has a name, and it’s called the idiosyncratic rater effect. According to research, there are three factors that influence performance rankings (listed below):

IDIOSYNCRATIC RATER EFFECT

  • Actual job performance
  • Rater biases
  • Random measurement error

Rater biases have a huge influence on the score that’s given. If the score in a performance review determines career advancement or a promotion and the data is biased, decisions are being made on bad data.

2.) ANONYMITY

The second piece of 360-reviews is the anonymity of the results. If the point of the 360-review is to encourage development, people shouldn’t be giving important performance information in an anonymous matter. Many people will mention that you’ll get more honest feedback if it’s anonymous, and we agree with that.

We see this as a game of tradeoffs though, with anonymous feedback being the loser. Here’s why:

  • Anonymous feedback doesn’t encourage a culture of transparency (it encourages the exact opposite behavior)
  • Anonymous feedback raises the question – “who said this about me?” and distracts from the entire point of the feedback (to help an employee grow)
  • If you don’t know who gave what feedback, you can’t dig deeper and fully understand the areas to improve. It lacks the context needed to improve.
  • People need to get used to delivering feedback in a tasteful manner. Hiding behind a cloak of anonymity does nothing to help this.

If you’re interested in learning about a few more issues associated with 360-feedback, here’s 40 of them.

3.) SAVE IT FOR LATER MENTALITY

The final point we’ll make is that coaching conversations should happen on a frequent basis (learn more in our guide on continuous improvement), so saving all the feedback for a once a year “feedback dump” is a terrible process that is bound to go wrong.

SO HOW SHOULD 360-REVIEWS HAPPEN?

We have a few thoughts on how you can have more effective 360-reviews.

CREATE A CULTURE OF GIVING FEEDBACK

This first bit of advice revolves outside the 360-review process, but feedback needs to happen constantly at work. If you’re a manager, we recommend weekly one-on-one meetings. Yes, this will take effort, but it’s worth it. This is especially helpful, as teams can be more efficient because the feedback loop is working on a continuous basis.

NO RATINGS

Ratings are a way HR can categorize people into buckets for salary/promotion. Don’t use them. 360-reviews should be an employee development tool, NOT an HR tool. The confusion that has happened is why almost everyone hates performance reviews.

Find a better way to give out annual bonuses. The data is bad anyways (as we discussed earlier).

KEEP IT SIMPLE

We get it – you want multiple perspectives that 360-reviews offer. That’s why we recommend asking the following questions:

  • What should [person] start doing?
  • What should [person] start doing?
  • What should [person] keep doing?

If you don’t like those questions, here’s another lineup to try:

  • Here’s what we love about [name]
  • Here’s what [name] can improve upon
  • Here’s how we’re going to help you achieve your goals

These reviews don’t need to be complex. Employees like understanding more about their strengths, so make sure to include a section on this.

ENCOURAGE EMPLOYEES TO PROACTIVELY ASK FOR FEEDBACK

This last step will take some time, but do everything you can to encourage employees to ask for feedback on their own. Then, people can prepare themselves beforehand. It’s amazing how big of a difference this can have (it’s opt-in vs. being opt-out).

WRAPPING UP

360-reviews have value as a developmental tool – if you’re using this as a mechanism to collect HR data, employees will know. Avoid these pitfalls, your employees will thank you.