Does 360 Degree Feedback Lead to Improved Performance?

We wanted to understand for ourselves whether the use of 360 degree feedback has a positive impact on the performance of our clients organisations. With the My Talent database storing the data from something like 150,000 360 surveys we felt we must have enough data to do some meaningful analysis!

The techie bit.

We looked at everyone who has completed a 360 degree survey with us. This included those who used our Inspiring Leader competency framework (around 14,000 individuals) as well as those using their own competency frameworks. We sliced out the data from everyone who has completed a 360 year-on-year using the exact same competency framework and we looked at the ratings they received from those people who gave them feedback in both years (i.e. we excluded anyone who only rated them in one year). In this way we were looking at individuals rated by the same people, to the same competency framework, from one year to the next. We also only looked at clients who either used 360 within the context of a development programme and those who use it purely for appraisal and asked the question, what happens with their 360 scores?

What did we find?

We noticed two trends in particular.

Year-on-year scores went up if an individual was completing their 360 as part of a wider organisational development programme and year-on-year scores went down if an individual was completing their 360 as part of an appraisal process.

What does this mean?

Where the scores have gone up in the context of a development programme it doesn't necessarily mean that performance has improved, just that scores have gone up and we just don't have the data to tell us if performance has improved. It could be that scores have gone up because people expect a developmental programme to help make someone a better manager, so they have given better scores year-on-year based on that assumption. However, our experience of working with clients would suggest that a developmental programme, particularly when it is dovetailed to respond to the needs identified through the 360 degree process, does positively impact an individual's performance and how they show up for their colleagues at work.

There is also an interesting phenomenon which occurs when using 360 for appraisal, which may contribute to scores going down year-on-year. We find that when 360 degree feedback is used for pay or bonus decisions colleagues tend to give more generous ratings. In the first year of such schemes individuals don't want to provide feedback that risks negatively impacting their colleagues pay, so the scores people receive are inflated and raters are nicer, overly positive, or purposefully un-negative with their feedback. We have spoken to people where they don't think highly of a colleague and yet they give them high scores, because it wouldn't be fair to impact their pay. As these schemes bed in and greater honesty is requested by HR and Leadership, the scores start to come down over time.

In summary, our experience of working with clients backs up the stats. Where 360 takes place in a developmental context it adds value to the individual and the organisation, in the best cases transforming individuals, leadership and culture. Where 360 is used for appraisal it does not appear to have as positive an outcome.