TERM PAPER

OF
HUMAN RESOURCE MANAGEMENT

TOPIC: 360 DEGREE APPRAISALS & ITS PROS &

CONS
SUBMITTED TO: SUBMITTED
BY:
Jaschetan Mam Ritesh
Kumar
Roll
No. B-54
Reg.
No. 11004058

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 ACKNOWLEDGEMENT

Success cannot come without inspiration, motivation & innovation. We

while doing the projections, ascribe our success in this venture under the
guidance of Ms. Jaschetan Without her guidance our project completion
would have been a distant dream.

Though we work hard to complete our project but from the core of my
heart I would like to thank my colleagues for the guidance to help me
out in this project. This project will definitely help me in the future.

Ritesh Kumar

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TABLE OF CONTENTS: PAGE NO.

1. Introduction………………………………….04-05

2. Emergence of topic…………………………. 06

3. Review of literatures………………………....07-09

4. Implication in companies…………………….09-10

5. Pros & cons…………………………………..11

6. Summary &Conclusion………………………12

7. Bibliography………………………………….13-14

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Performance appraisal:

Performance appraisal is the process of assessing an employee's performance based on a set of

standards. Performance appraisal may be defined as a structured formal interaction between a
subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-
annual), in which the work performance of the subordinate is examined and discussed, with a
view to identifying weaknesses and strengths as well as opportunities for improvement and skills
development. For any organization to achieve its goals and to sustain its growth in the present
competitive world, the performance of each and every individual employee plays a major role.
The performance of the employees should assess continuously to make their contribution to
higher extend. The process of measurement of the performance of employees at work is termed
as performance appraisal. Performance appraisal has long been regarded as one of the most
critical areas of human resource management. The Human Resource Department relies on
evaluation results in determining the soundness of much developmental decision, which have
direct impact on the business surplus.

Need of performance appraisal:

1. Most employers still base pay and promotional decisions on the employee’s appraisal.
Although a similar trend is becoming popular with the Indian private sector and MNCs,
pay and promotion decisions in the Indian public sectors and the more traditional private
organizations are still based on seniority. However the minimum level of performance
does need to be recorded to be eligible for promotions.
2. Appraisal plays an integral role in the employer’s performance management process. It
does little good to translate the employer’s strategic goals into specific employees’ goals,
if you don’t periodically review performance.
3. The appraisal lets the boss and subordinate develop a plan for correcting any deficiencies,
and to reinforce the things the subordinate does right.

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 4. Appraisals should serve a useful career planning purpose. They provide an opportunity to
review the employee’s career plans in light of his or her exhibited strengths and
weaknesses.

PREREQUISITES OF 360 DEGREE APPRAISALS:

• Top Management Support

• Confidence of employees on the appraisal methodology
• Objectives need to be measurable with performance requirements clearly stated.
• A detailed plan of implementation
• Collaboration between superior and subordinates
• Some prior experimentation and positive experiences Clear organizational philosophy
and policy objectives

Performance appraisal
system

180 270 360 720

degree degree degree degree

360 degree performance appraisal system:

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360-degree feedback is a full circle system of obtaining information from peers, subordinates,
and internal and external customers, about the employee's performance.

360-degree assessment is based on the assessment of an individual's management styles,

competencies and behavior by colleagues horizontally and vertically by involving his boss, peers
and direct reports in the organization.

It is generally believed to be a highly effective performance evaluation tool yet there are many
who doubt its benefits. Considering factors for the success and the failure of this popular method
will provide guidelines and suggestions for its use.

360-degree feedback is an evaluation method that incorporates feedback from the worker, his/her
peers, superiors, subordinates, and customers. Results of these confidential surveys are tabulated
and shared with the worker, usually by a manager.

The primary reason to use this full circle of confidential reviews is to provide the worker with
information about his/her performance from multiple perspectives. From this feedback, the
worker is able to set goals for self-development which will advance their career and benefit the
organization.

With 360-degree feedback, the worker is central to the evaluation process and the ultimate goal
is to improve individual performance within the organization. Under ideal circumstances, 360-
degree feedback is used as an assessment for personal development rather than evaluation

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360 degree performance appraisal:

360 degree Feedback

From multiple perspectives

Peer
Custom
s
ers

worke
rs

Superior
s Subordina
tes

EMERGENCE OF 360 DEGREE APPRAISALS:

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In today’s corporate culture 360 degree appraisal system became more viable to measure
employees performance. It provides values in following ways:

o 360-degree feedback provides a better understanding of individuals performance at work

o 360-degree feedback provides a multifaceted view about the employees from different
sources
o 360-degree feedback provides a better understanding of employed developmental needs
o 360-degree feedback provides increased the understanding about one's role expectations.
o 360-degree feedback provides increased the understanding of competence and
competency in various roles
o 360-degree feedback extends better morale to those who perform and contribute well to
the organization
o 360-degree feedback reduces training costs by identifying common development needs.
o 360-degree feedback increases the team's ability to contribute to the organizations goals
o 360-degree feedback helps everyone to work for a common standard and institutionalize
performance management.
o 360-degree feedback ensure better interpersonal relationship and group cohesiveness
o It promotes self-directed learning and provides a road map for employee's development
planning.
o It promotes better Communication within departments.

360-degree feedback Increases the team's ability to contribute to the organizations goals develop better
bottom line through boosting the capability of the organization to meet its objectives

REVIEW OF LITERATURE

McDowell A. & Mabey C. (2008) have found in their study developing a framework for
assessing effective developing activities that Ratings in appraisals are flawed, whereas their
developmental aspect appears dependent on the communication between managers and their
charges. Also, there is little evidence on what happens as a result of appraisal interviews in the
context of the manager-employee relationship, and how organizations could best optimize this
activity to aid long-term individual and organizational development.

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Appelbaum S. et al (2008) have described in their study Performance evaluation in a matrix
organization that Ineffective evaluation methods within matrix organizations can lead to lower
employee morale as well as an ambiguous understanding of employee roles within such an
organization. Employee and management buy in and support of an evaluation system and its
goals are crucial to the success of the program. The multi-rater system (360 degree appraisals)
appeared to be most effective.

Dierendonck et al (2007) have found 3 results in their study Effects of upward feedback on
leadership behavior toward subordinates that First, managers lack insight into the real impact of
their behavior. Second, only a small positive effect was found of the upward feedback program
on the leadership behavior as rated by their staff in terms of valuing diversity. Third, the
managers' self-ratings of Presenting feedback, Fairness and Integrity & respect decreased
between Time 1 and Time 2.

Rensburg T & Prideaux G (2006) have facilitated in their study turning professionals into
managers using multisource feedback that The MSF program (360 degree appraisals) was an
effective way of achieving change in the attitudes and behavior of the professionals, and of
improving their leadership and management skills. It contributes to knowledge concerning the
nature of professionals in organizations and their response to management systems and to
feedback processes. They contribute to understanding of the applicability of the use of 360
degree as a management system for professionals, as a means of achieving the development of
management skills, and of achieving organizational improvement

Morgan A. et al (2005) described in their study 360° feedback: a critical enquiry that at an
organizational level the use of 360° feedback, as a performance management tool, failed to
develop the self-awareness anticipated. Neither was it found to be aligned with other
development plans or the organization's core competencies. At an individual level some
participants believed that they achieved little from the process overall and this may be related to
an expectation that the organization's HRM system would be more proactive in planning
development action on their behalf.

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Hoffmanner A. (2004) has facilitated the use of 360-degree feedback programs with dozens of
companies. He lists many positive results to using the 360-degree method: He received frequent
feedback that it had an overall positive effect on the organization since as employees broadly
evaluated their managers on people, personal effectiveness and attitudes; it raised the
consciousness on these issues such that they observed changes/improvements in their
culture/relationships.

Randel A. (2003), formerly of Hewlett-Packard and Agilent Technologies, distributed 360-

degree surveys frequently and rarely had any surprise information revealed. Typical comments
received showed respect and appreciation of co-workers but seldom any negative remarks. This
perplexing result can be explained by the open methodology of the survey (they were not
confidential), and the fact that the workers usually made their complaints verbally to her.
Organizational climate indeed plays a large role in the effective use of this assessment tool.

McCarthy A, & Garavan T. (2001) has described in their study “360° feedback process:
performance, improvement and employee career development” that 360° feedback processes
have gained popularity as a performance management and career development tool in
contemporary organizations. This monograph explores the nature of 360° feedback, investigates
the factors which have influenced its emergence and contrasts it with more traditional
performance management processes used by organizations. It specifically ide.pngies the benefits
and problems associated with 360° feedback in the context of management of performance and
employee career development. The monograph considers the issues surrounding different
sources of feedback, i.e. peer, subordinate and self. The monograph concludes with a discussion
of the issues pertaining to the use of multi-rater feedback as a tool for performance improvement
and career development.

Hugget M. (1998) has stated in her study 360 degree – great expectations that 360-degree
feedback is gaining acceptance as a way of supporting development programs and appraisal
schemes. The experience of an engineering company using 360-degree feedback to help
managers and their staff have a more effective appraisal discussion is used to illustrate the
caution needed to ensure that the expectations of the organization are realistic and that the
employees’ natural concerns are taken into account.

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Hurley S (1998) has explored 360 degree performance appraisal in his study Application of team
based 360 degree feedback systems as an increasingly important performance measurement tool,
especially in the area of teams, is 360° feedback. This paper discusses the theories behind the
system, and provides an in-depth review of the techniques of implementing 360° feedback in an
organization. Steps for implementation include selection of raters, questionnaire construction,
feedback, presentation, and follow-up. Additional considerations such as rater responsibility,
cost, organizational change and support, benefits, and dangers of abuse or mis-usage of the
system are addressed. Special considerations are discussed for using the system in team settings
and how the system can be built-in to a developing team system or adapted for use in an existing
one. More research is currently needed in areas such as quality of samples, process information,
training effectiveness, and sustaining the process.

Cacioppe R. (1998) has demonstrated in his study Leaders developing leaders: an effective way
to enhance leadership development programs that how senior leaders in organizations can play a
greater role in the development of leadership within their organizations. Innovative “leaders
developing leaders” programs in PepsiCo, General Electric and Shell are described as examples
of tangible and effective ways that can be used for successful leadership development which can
also contribute to strategic change and business profitability. Suggestions and various options to
incorporate senior executive involvement in leadership development programs are put forward as
well as factors that need to be considered when first implementing this approach. At a time when
leadership development is recognized as a vital ingredient for organization success, the
involvement of senior leaders in the teaching and learning of future leaders has been shown to be
a powerful and effective tool.

Kelly J. (1996) has described in her study Glaxo welcome culture changes that 360 degree
appraisals Spotlights the cultural transitional process which has taken place following the merger
of Glaxo and The Wellcome Foundation to form Glaxo Wellcome in March 1995. Underlines
that management was proactive in developing a global culture, inviting a human resource
consultancy, Renaissance, to conduct a four-phase custom-designed leadership and cultural
change training programs, Claims that such training can achieve lasting human benefits,
encouraging commitment, accountability, creativity, trust, team spirit and self- management.

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IMPLICATION BY COMPANIES:

1. INFOSYS TECHNOLOGIES:

Infosys uses multi-rater performance appraisals (360 degree appraisals) to get feedback
of their employees at different level of hierarchy.

The objectives of 360 degree appraisals system in Infosys are as follow:

1. Do the various sources provide unique information?

2. Does 360 degree feedback result in improved performance 360 Degree Works Best
When?

• Managers meet with their subordinates to discuss their upward feedback.

• The Managers, receiving the feedback, were initially not the top performers.

• The Managers, receiving the feedback, initially think that they are performing
better than do their subordinates.

• The results are used for feedback rather than for decisions about compensation
and promotions.

At INFOSYS, 360 performance appraisal systems are implemented by following ways:

1. Draw a customer diagram showing the internal and external customers to whom you
provide products and service,

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 2. Create a list of results for your position,

3. Decide how to measure each result

4. Create performance standards for each measure

5. Check the performance standard.

2.WIPRO:

When Wipro first introduced click-360, its online 360-degree feedback application, 2000, it
experienced quite a lot of resistance to the whole 360-degree concept. Other exhibitors
experienced this, too. At that time, there were still myths and misunderstandings around its
value, as well as some people who had had negative experiences. Since that time, we have
worked with many national and international customers and helped them to see the real value of
360-degree appraisals. Once it is understood that this is not a “quick win” but that it must support
and underpin the overall strategic aims of the organization and function as a measure of a
company's accomplishment in the big and long-term picture, it begins to make commercial sense.

Like Infosys and Wipro most of companies chiefly MNCs uses 360 degree to rate its employees
performance because it consists feedback from all the side like immediate boss, subordinate, peer
employee in same department, and customer to whom they deliver product or services.

3.IBM:

IBM provides an interesting example highlighting a shift in use of assessments. Until recently,
IBM used 360-degree feedback as part of their annual performance review. This practice was
halted as the reviews had become politically charged and were no longer reliable. Since IBM
appreciated the value of multiple perspectives, a new employee satisfaction survey was
implemented to regain the benefits found in using the survey without the pitfalls

Companies handle this system in following:

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 1. What is your purpose? (Objectives of performance appraisal)
2. Is your organization ready(examine financial and structural condition of companies)
3. Have you prepare the soil(check whether employees are ready for the feedback or not)
4. How will the 36-degree feedback survey be run(define the procedure of feedback )
5. How will the 360-degree feedback be delivered?(evaluate the feedback process)

Some major companies follow 360 degree appraisal system:

AT&T, Mass mutual insurance, Bank of America, Digital, Tenneco, Exxon, General Electric, &
Daimler- Chrysler

PROS AND CONS OF 360 DEGREE:

Organizations that experience success with the 360-degree feedback methods have
many environmental attributes present. Some of these pros are:

• Organizational climate fosters individual growth

• Criticisms are seen as opportunities for improvement
• Proper framing of feedback method by management
• Assurance that feedback will be kept confidential
• Development of feedback tool based on organizational goals and values
• Feedback tool includes area for comments
• Brief workers, evaluators and supervisors about purpose, uses of data and methods of
survey prior to distribution of tool

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 • Train workers in appropriate methods to give and receive feedback
• Support feedback with back-up services or customized coaching

Factors Linked to Failure

Many organizations have rushed into 360-degree feedback without laying the foundation for
success. Typical errors include:

• Feedback tied to merit pay or promotions

• Comments traced to individuals causing resentment between workers
• Feedback not linked to organizational goals or values
• Use of the feedback tool as a standalone without follow-up
• Poor implementation of 360-degree tool negatively affects motivation
• Excessive number of surveys are required of each worker with few tangible results
provided to individuals

SUMMARY AND FINDINGS:

However the popularity of 360-degree feedback is undeniable. Yet, the perceived benefits will
help the personal development of workers only in the right organizational climate. When this
method is utilized in the wrong environment, the results can be detrimental. With close
consideration and evaluation of the environment, the decision to employ this tool, or another,

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should be made carefully. Still in India companies are hesitant to 360 degree performance
appraisal system. The reason behind this are:

1. The organizations are ruled as per hierarchy bases

2. people (subordinates) do not open up about their boss
3. Veterans kind of Managers
4. Power and Politics exists in organization
5. Majorly vertical (Top to Down) communication exists.

So that To ensure that 360-degree feedback has a better chance of producing a change, here are
some recommendations:

• The feedback must be anonymous and confidential. Involving enough participants is

critical to obtaining truthful, specific feedback. The promise of anonymity helps convince
people that they can be candid.
• Consider the length of time in the position. Valid feedback depends on people having
worked with someone long enough to get to know them. If time on the job is less than six
months, feedback from the person’s prior work group can serve as a benchmark for the
next appraisal.
• A feedback expert should interpret the feedback. Most people won’t act on something
that they don’t understand. Many feedback instruments are complicated. An expert can
explain the scoring and present the results properly.
• Follow-up is an essential part of the process. Employees should develop action plans on
low-scoring areas on the initial appraisal and assess their improvement in follow-up
surveys about six months later.
• 360-degree feedback shouldn’t be used to determine salaries or promotions. The aim is to
open up a dialogue.
• Let feedback providers give written descriptions as well as numerical ratings. This
enables them to be specific, and the feedback will be more meaningful to the recipient.
• Ensure that the feedback instrument is reliable, valid, and based on statistical methods.
• To avoid survey fatigue, don’t use 360-degree feedback on too many employees at one
time. You’re likely to obtain unreliable feedback. That doesn’t mean that you can’t use

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 the process successfully with an entire work group. You just need to stagger the
distribution of the forms.

Whether it’s called multi-rater, 360-degree, or some other kind of feedback, it’s more useful and
reliable to obtain information about an employee’s performance from several people at different
organizational levels. If companies entertain the tips mention above, and look for people to
change their behavior for the better. Everybody will be benefited who are involved in this.

REFRENCES AND BIBLIOGRAPHY:

http://appraisals.naukrihub.com/360-degree-performance-appraisal.html

http://en.wikipedia.org/wiki/360-degree_feedback

http://humanresources.about.com/od/360feedback/a/360feedback.htm

http://appraisals.naukrihub.com/arguments-against-360-degree-appraisal.html

http://www.indianmba.com/Faculty_Column/FC345/fc345.htm

http://edweb.sdsu.edu/people/ARossett/pie/Interventions/360_1.htm

http://www.star360feedback.com/the-pros-and-cons-of-360-degree-feedback-making-it-work

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.
http://www.emeraldinsight.com/Insight/ViewContentServlet;jsessionid=A7EFBC8F1FA97DBB
FBCD63B0EBA45DF6?
contentType=Article&Filename=Published/EmeraldFullTextArticle/Articles/0440160212.html

BIBLIOGRAPHY:

K ashwathappa, human resource management, fifth edition, Tata McGraw-hill Co., Appraising
and Managing Performance, pp 267-270.

Dessler & Varkkey, Human resource management, eleventh edition, Pearson publication,
performance management and Appraisal, pp 338-365

McDowell A & Christopher M, 2008, “developing a framework for assessing effective

development activities,” vol.37 issue 6, pp 629-646

Steven H. Appelbaum, David Nadeau, & Michael Cyr, 2008, “performance evaluation a matrix
organization”, industrial and commercial Training, vol. 40, issue 6, pp 295-299

Dirk van Dierendonck, Clare Haynes, Carol Borrill, & Chris Stride, 2007, “Effects of upward
feedback on leadership behavior toward subordinates”, journal of management
development,vol.26, issue 3, pp 228-238

Tony van Rensburg, & Geoffrey Prideaux, 2006, “Turning professionals into managers using
multisource feedback, journal of management development, vol.25, issue 6, pp 561-571

Arthur Morgan, Kath Cannan, & Joanne Cullinane, 2005, 360 degree feedback: a critical
appraisal, vol.34, issue 6, pp 663-680

Alma M. McCarthy, & Thomas N. Garavan 2001, 360° feedback process: performance,
improvement and employee career development, vol. 25, issue 1, pp 5-32

Marriana Huggett, 1998, 360 degree feedback- great expectation, journal: industrial and
commercial training, vol.30, issue 4, pp 128-130

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Simon Hurley, 1998, application of team-based 360 degree feedback systems, journal: Team
Performance Management, Vol.4, issue 5, pp 202-210

Ron cacioppe, 1998, Leaders developing leaders: an effective way to enhance leadership
development programs, journal: leadership & organizational development, Vol. 19, issue19,
pp194-198

Janet Kelly, 1996, Glaxo welcome culture change, journal: Management development review,
Vol. 9, issue 4, pp 38-40

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