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Improving the Payoff from 360-Degree FeedbackEvelyn Rogers, E. Rogers Associates; Charles W. Rogers, Pepsi-Cola North America; William Metlay,Industrial/Organizational Psychology, Hofstra University

H istorically, employees received feedback

only from their direct supervisor. With

flattened structures and the need to respond

quickly to customer demand, 360-degree

feedback ("360 feedback") was introduced to equip

employees with the infonnation needed to deal with

change and to leverage individual talent to meet

organizational goals. Today, many companies fully

customize the 360 feedback process to the specific

competencies and values required to meet their goals,

often creating multiple sets of competencies to ensure

relevancy to the business. Some companies have gone

further and linked the process to performance appraisal

and succession planning,

This article describes our research findings on the

360 feedback process. We have discovered six critical

factors, or best practices, to help leaders in organiza-

tions get the most from their investment in the process.

Additionally, we have found that organizations that

derive the most benefit from the 360 feedback process

use it for individual development planning, coaching,

and feedback; and carefully manage every step of the

process, from choosing who will participate to invest-

ing in extensive training for all involved employees.

44 HUMAN RESOURCE PLANNING

360-degree feedback. It is time-consuming,people-intensive, rife with politics, and comeswith a significant price tag. Yet almost everyFortune 100 company is doing it. Why?

While some firms may be attracted to theprocess for its sheer popularity, many companiesare gaining significant organizational andindividual benefits that they believe justify theinvestment. These companies are approaching360-degree feedback in similar ways. Ourin-depth research study of 43 global organiza-tions uncovered six critical factors, or bestpractices, that organizations use to get the mostfrom the process;

1. Use 360-degree feedback primarily for indi-vidual development.

• Linkage to performance appraisal, compen-sation, succession planning is risky unlessthe organization is ready and a developmentculture exists.

2. Link the process and align participants withstrategic imperatives.

• Build business-focused competencies andcustomize to specific functions, levels, and jobs.• Involve the customer

3. Exert high administrative control over everyaspect of the 360 feedback process.

• Choose the participants and manage thefeedback process closely, approving the raters.Train everybody involved in advance.

4. Use senior management as role models.• Invest time, money, and resources.

5. Use highly trained internal coaches to leverageyour investment.

• Participants need help understanding the feed-back and following through on an action plan.• Sharing results with the supervisor andcustomer can create a team approach todevelopment.

6. Evaluate the return on investment or effective-ness of the process as you would any businessendeavor.

• Identify individual and organizationaltrends.• Treat 360 feedback as a human resourcesystem that adds value to the business.

A Historical PerspectiveDifficulty providing honest and direct feedback

has plagued human beings since the beginning oftime. As far back as the 3rd century A.D.. during

the Wei Dynasty, an "imperial rater" was installedto evaluate the performance ofthe official familymembers, causing much internal debate about thefairness of his decisions.

Moving forward to the industrialization of theUnited States in the late 1800s, the typical work-place was characterized by autocratic authorityund a participant population without rights.Supervisor feedback to workers was random,harsh, and primarily focused on level of output.

After the Second World War. several forcesbrought additional processes to the boss-subordi-nate relationship. The events of the war raisedconcerns about the negative effects of authoritar-ianism and provoked an interest in democracyand autonomy in the workplace. A boomingeconomy, increased opportunity, a desire for the"good life." and labor relations issues combinedto mobilize an increased focus on participantmotivation and job satisfaction. The originsof 360 feedback can be traced to early participantsatisfaction surveys designed to improvecommunication and morale, and to an increasedunderstanding of the power of goal-settingand feedback to inspire performance. Regularperformance reviews between supervisor andparticipant became the norm.

Changes in the 20th century workplace havediminished a supervisor's ability to assess fullyhis or her participant's performance. Organizationshave streamlined their structures and flattenedhierarchies to become more competitive, creatingbigger jobs for managers who now have moredirect reports and less time. Participants arerequired to communicate and work with othersacross organizational boundaries and out of thesupervisor's reach, undermining the reliabilityof traditional supervisor-participant performancefeedback. With the pressure of global competi-tion, the focus of business has moved from thecompany to the customer and marketplace. Fortoday's participants to be responsive and adapt tochange, they need to know not only their bosses'views, but also the perceptions of peers andcustomers. The notion of subordinate feedbackrevolutionized the feedback process. Researchdemonstrated that the perceptions held by directreports of their supervisors were not only accuratebut also a motivator in changing managerialbehavior.

So 360 feedback - or multi-source feedback -began to sweep through organizations. Participantsbegan to receive feedback from a varietyof sources, including supervisors, peers, and

HUMAN RESOURCE PLANNING 45

customers, and were then able to compare theresults with their own views. The process provid-ed participants with information on how theymanage, work with others, and get results.

Hoping to gain a competitive advantage, orga-nizations in the 1990s began to align their feed-back processes with overall strategies and goals.The 360 feedback process was designed aroundthose behaviors, competencies, and individualcharacteristics that would lead to the accomplish-ment of strategic objectives. For example, manycompanies began the 360 feedback process bydefining key organizational capabilities. Theythen developed a competency model that detailedthee behaviors or skills necessary to achievethose capabilities. The competency modelbecame the basis for measuring participantbehaviors and skills during the 360 feedbackprocess. The reasons for heginning the 360 feed-back process were varied. One company becameconcerned about a shrinking talent pool, andplaced development of leaders as its highest pri-ority. Another defmed corporate values and needsafter a merger to clarify the new culture and mis-sion. In these companies, the 360 feedback sur-vey was fully customized to specific competen-cies and values.

The predominance of 360 feedback and lag-ging research about best practices led us toexamine why and how organizations are using360 feedback today. An initial survey, of seniorhuman resource executives from 145 globalorganizations completed in 1998, resulted in 43responses regarding the degree of benefit compa-nies had derived from the 360 feedback process(see Exhibits 1 & 2). These organizations repre-sented a mix of mid- and large-sized corpora-tions, with revenues ranges from $4.2 billion toS163 billion and employees numbering 4,000 to300,000. We then divided the organizations intothree groups - higher-benefit, low-benefit, andmoderate-benefit - based on responses to thetwo most frequently answered questions - 360feedback was beneficial to the organization and360 feedback process was worth the resourcescommitted (see Exhibit 3). It was discovered that21.5 percent of organizations found 360 feedbackto be of high benefit, 57 percent found 360 feed-back to be of moderate benefit, and 21.5 percentfound 360 feedback to be of low benefit. Thehigher-benefit organizations provide a model ofbest practices for those considering implement-ing, expanding, or improving 360 feedback intheir organizations.

EXHIBIT I

OrganfZItidtiStlthe Survey

Aetna

Alc-in Aluminum Limited

Allstate

AMR

Anheuser-Busch

Bank One

Bestfoods

Boc Group

BP Amoco Grotip

Bristol Myers Squibb

Campbell Soup

CiGNA

Citigroup

CNA Financial

Dell Computer

Deutsche Bank AG

Enron

First Union

Ford Motor

Goodyear Tire & Rubber

Home Depot

Johnson & Johnson

Kellogg's

Kraft Foods

Nestle, USA

NY Life Insurance

PepsiCo

Philip Morris

Piilsbury

Prudential Insurance

Ralston Purina

Raytheon

Rockwell International

Royal Packaging Industries

S.C. Johnson & Son

Sears, Roebuck & Co.

State Fann Insurance

TL^-CREF

Tricon Global Restaurants

UBSAG

USX

Utilicorp United

Warner-Lambert

We organized the research into five practiceclusters: the purpose of 360 feedback, proceduresused for implementation, resources used to sup-port the process, coaching resources and process,and evaluation for effectiveness.

The Purpose of 360 FeedbackOriginally, 360 feedback was used to accelerate

the growth and development of a talented participant.The belief was that understanding discrepanciesbetween how we see ourselves and how otherssee us would enhance self-awareness and lead topersonal development. High-potential executivesreceived a full assessment, with support from anexternal psychologist who designed and followedthrough on a detailed development plan.

Over the years, the uses of 360 feedbackhave expanded significantly to include not onlyexecutive development, feedback, individualdevelopment planning, and coaching, but alsocareer development, training, performance


The employee's job perfonnance improvedas a result of 360 feedback

360 feedback provided a competitiveadvantage to the organization

360 feedback helped the organizationstrive to achieve its major goals

360 feedback increased profitabilityin the organization

The 360 feedback process was worththe resources committed

360 feedback was beneficial tothe organization

EXHIBIT 3

lstnbutionbiHigher-Benefit, Moderate-Benefit, Low-Benefit

100%

80%

60%

40%

20%

High-Benefit

Moderate-Benefit

Low-Benefit

appraisal, compensation, succession planning,and team-building. As organizations began to use360 feedback for purposes other than individualdevelopment, the process often failed. Some par-ticipants felt penalized if scores on the feedbackreports were linked to their success within theorganization; others found the tie to compensa-tion to be unfair, especially in environments

where the commitment to development was inquestion. Buy-in and support for 360 feedbackamong participants was affected.

According to our survey, most organizationsare still using 360 feedback as a developmentand feedback too! (see Exhibit 4). Organizationsthat derive the most benefit from 360 feedbackuse it for individual development planning,coaching, and feedback much more so than com-panies that derived the least benefit (see Exhibit5). These higher-benefit organizations believethat with individual development as a primatygoal, a "development culture" will emerge,resulting in higher performance for the companyas a whole. As Jack Welch states in Straight fromthe Gut., "We build great people, who then buildgreat products and services" (Warner Books,2001). Individual 360 feedback results are sharedwith key people, leading to .shared ownershipover personal development and individual actionplans resulting in more open, communicativectiltures. Individual development, then, beginsto have broad organizational impact.

Some organizations use the individual infor-mation obtained from the 360 feedback measure-ment tool to create and maintain a database for avariety of organizational analyses. Companiescan assess their talent pool, determine leadershipgaps, detect organization-wide problems, andmeasure the alignment of participants with keyorganizational priorities.


Compensation

Team building

Succession planning

Perfonnance appraisal

Training

Career development

Coaching

Executive development

Development feedback

individual development planning

EXHIBIT 5

Best Practicesa. PURPOSES• Coaching• Individual Development Planning• Developmental Fccdhack

b. PROCEDURES• Participants were nominated for participation• Participaitts were trained in aJvanue• Participants' selection of raters was approved• Raters were trained in advance• The organization used multiple instruments• 360 feedback results were shared with ihe participant's

supervisor• 360 feedback results were communicated to

the participant• The organization u.sed less administration• Participants were raied by customers

c. RESOURCES• Commitment from Senior Management• Financial Resources• Time• People

d. COACHING• Coaching was used as part of the 360

feedback procedure• The organization used appropriate criteria for the

selection of coaches• The procedures for 360 feedback were communicated

ciearly to the coaches• Tlie coaches were trained in advance on the instrument• Tlie coaches helped build au action/development

plan for the participant

Implementation ProceduresThe instrument or questionnaire used in eval-

uating the participant is crucial to the 360 feed-back process. The questionnaire determines thequality of the feedback. A multitude of differentinstruments and items are available on the mar-ket today. Organizations are faced with a choiceof not just which, but how many instrumentsto use. They can choose to use one instrumentacross their entire organization, or they canuse multiple instruments for different levelsor departments. Both of these approaches havetheir advantages. Standardizing the use of oneinstrument allows the organization to compareindividual and group results across levels anddepartments, whereas the use of multiple instru-ments or sets of competencies allows the organi-zation to target skills that are specific or criticalto participants in different levels or positions.

Customizing CompetenciesWe found that higher-benefit organizations use

multiple sets of competencies to ensure participantssee the value and importance of the feedbackthey receive. With multiple sets of competencies,participants in different levels or positions receivefeedback tai'geted specifically to their job respon-sibilities, making the results more meaningful.As one executive commented, "Focus on theright competencies is critical. Customizing theprocess to what is important and valued has added


tremendous importance and credibility to oureffort. It has been rewarding to see how seriouslypeople are treating their feedback."

The customization of the feedback tool can beinstrumental in helping to create an open culture."Participants in our 360 feedback process likethe fact that the tool is customized/' one managersaid. "They can see how it directly applies totheirjobs as well as the organization. Participantsdiscuss their results with peers, who are strug-gling with similar issues. This is in keeping withour culture - tmst each other." Individual resultson strategic priorities link the participant moreclosely to the organization as well as to his orher supervisor, peers, and customers. Participantscannot discount the importance ofthe processbecause of its connection to the business andto their individual success.

Exerting ControlHigher-benefit organizations are clearly dif-

ferentiated by a greater level of administrativecontrol, discipline, and careful implementation -a striking finding with today's work environmentincreasingly influenced by the notion of individualempowerment. In each step ofthe 360 feedbackprocess, the participant's experience is cai'efullymanaged (see Exhibit 5). These organizationsprefer internal to external administration, imply-ing both control and ownership over the process.As the process begins, the organization choosesthose who will receive 360 feedback - there areno self-nominations. In our study, 67 percent ofhigher-benefit organizations exerted high controlover the nominating process, while 78 percentof low-benefit organizations utilized voluntaryparticipation. To ensure the process is understoodand beneficial, participants in higher-benefitcompanies are trained in advance. This reducesanxiety and also helps the individual accept andact on the final results. In one company, partici-pants and their managers are required to gothrough a full self-paced online training programbefore they participate.

These organizations also maintain a level ofapproval over the individual's selection of raters.More than 60 percent of higher-benefit organiza-tions approve the selection of raters (see Exhibit6). This ensures that a meaningful set of responsesis obtained and helps to avoid some of thetypical pitfalls and criticisms of 360 feedback -friends rating friends in a kindly but unhelpfulmanner, or raters assessing an participant with

whom they have had little experience. "Thereshould be a standardized process whereby youmust submit the questionnaire to specific individ-uals - direct customer, support function, boss,and direct reports. Otherwise, individuals sendthe survey to friends who only provide positivefeedback," one supervisor said.

EXHIBIT 6

Higher-Benefit OrganizationsApprove the Selectionof Raters

Higher-benefit 63%

Moderate-benefit 48%Low-benefit 11 %

Training RatersIn higher-benefit companies, those completing

the surveys, or "raters." are more likely to betrained in advance to ensure that results are asobjective and helpful as possible. Research hasclearly established that raters can commit errors,such as Judging too leniently or harshly. As oneexecutive said. "Raters need to be trained in boththe theory and objective of multi-rater feedback.Training the raters on the use of the survey tool,the rating scale, as well as definitions of compe-tencies, definitely leads to improved consistencyof results."

Communicating ResultsHigher-benefit organizations communicate the

results to the participant. These organizations alsotend to ensure that the supervisor is included inthe feedback proce.ss. Research has shown that theparticipant's productivity is determined primarilyby his or her relationship with direct supervisors.Sharing results with the supervisor, combined withinvolvement of the customer, can create an atmos-phere of openness and accountabiiily; however,sharing the results with the supervisor is likely toinfiate the ratings, as raters will work to reducenegative impact on their colleague.

When supervisors are involved, they becomeinspired to act as coaches and support theirsubordinates' plans. One participant in a higher-benefit company described his experience: "idiscussed my top strengths and top development


areas with tny supervisor and together wedetermined areas of focus for development."Another said, ''For the next year, working withmy manager, I incorporated the feedback into mypersonal development plan." When participantsshare the results with the supervisor, individualdevelopment becomes the primary focus.

Involving CnstomersIn 67 percent of the higher-benefit organiza-

tions, customers were asked to rate the partici-pants, compared to 22 percent of low-benefitcompanies. Involving the customer requires afollow-up action from the participant to providefeedback to the customer, "closing the loop,"and spurring a team approach to the resultingaction plan.

Rolling Down 360 FeedbackAs 360 feedback gained popularity, and tech-

nological advantages made it easier to imple-ment, the process often cascaded from executivelevels to non-exempt participants. One executivetold us that his organization had 10 managersparticipate in 1990; in 1999 there were more than3.500 participants who experienced the process,and additional growth was planned. Because 360feedback is time-consuming, most higher-benefitorganizations keep the logistics of the processsimple, leveraging internal electronic administra-tion, but using technology only for efficiency,not to depersonalize the process. Interestingly,paper and pencil methods for completing the 360questionnaires are still the primary tools used inmost (90%) organizations surveyed (see Exhibit7). Personal coaching from internal or externalconsultants is still found to be the most effectiveway to provide participants with one-on-oneassistance and support.

In the original model of 360 feedback, thehighest-potential executives received a fullassessment and built a detailed developmentplan, which an external consultant designed andfollowed over time. Today, many levels oftheorganization have the opportunity to receive thishigh-benefit feedback. Care should still be takento target high-potential managers. In The War forTalent, a McKinsey and Company report, mostcompanies could not even identify their high per-formers, much less develop them (Chambers, etal., 1998). In order for organizations to maintaincompetitiveness, they must provide more person-alized and ongoing feedback for this criticalleadership group.

Methods Used VS360 Feedback100

Tele media

Determining Confidentiality BonndariesWhile not a differentiating practice in our

study, confidentiality and anonymity occurred toEl great extent in 97 percent of all the companies.Maintaining the anonymity of the rater's feedbackis key to Ihe process. Just as a tie to compensationcan lead raters to soften their ratings, so can alack of anonymity. Over time, many organizationshave questioned the need to m<ike 360 feedbackresults known only to the employee and anexternal coach. For example, in some organiza-tions, both the HR department and the supervisorreceive the 360 feedback results. This level ofopenness can occur only in a development culturein which widespread understanding exists thatdevelopment is the primary goal and confiden-tiality boundaries are clear. Confidentiality ofthe participant's report and clarity regardingboundaries - who will and will not have access -sends the message that the organization isfocused on development versus evaluation.

The confidentiality boundaries a companychooses to use in the 360 feedback processshould be a function of "organizational readi-ness," a term we use to characterize the existingculture and level of trust. As we consult withorganizations that use 360 feedback, we helpthem assess five components:

1. Familiarity with 360 feedback data2. Purpose or objectives of 360 feedback in theirorganization (development, performanceappraisals, etc.)3. Underlying beliefs regarding development.


such as the degree of learning that can resultfrom 360 feedback4. A senior group that displays high integrity intheir communications and participation in theprocess5. Overall assessment of current cultural attribut-es as well as the level of trust in the organization

Promotion LinkageOne executive in a company that linked 360

feedback to promotion commented on the prob-lems that can ensue when 360 is used for purpos-es other than development. "Some people chooseraters to minimize negative feedback, presumablyto improve chance for promotion. My suggestionfor our organization is to make 360 availableonly to the participant for his or her own use.That way people can seek honest feedback fromthe right people, receive information that mighttruly be helpful, and not worry about hurtingtheir promotion chances."

Resources360 feedback is a time-consuming, expensive,

and people-intensive process. Our research clear-ly established ihat higher-benefit organizationsare fully committed to the 360 feedback process.Higher-benefit organizations provide resources toa great extent on al! fronts - senior managementsupport, fmancial, time, and people resources(see Exhibit 5). Commitment from senior man-agement appears to be critical in sanctioning theuse of work time for development and freeingmonetary and people resources to support theprocess. As one executive stated. "The presidentbelieved in the process and saw it as beneficial.This was the key to moving it through the orga-nization." Participants who observed their super-visor's involvement and buy-in to the processwere more likely to approach the process with anopen mind. "The participants look up to the CEOas a role model."' one executive told us. "Theywant to emulate him. They will follow his lead."

CoachingCoaching - or the process of using internal or

external individuals to explain 360 feedbackresults and assist in development planning - is acritical component of an effective 360 feedbackprocess in many organizations (see Exhibit 8).Higher-benefit organizations invest significanttime and exhibit high administrative control andorganizational discipline over the coaching

EXHIBIT 8

Coaching Is an Important P;

High-benefit

Low-benefit

process - beginning with careful selection ofcoaches against criteria, the clear delineation ofprocedure to the coaches, and intensive trainingon the instrument and process (see Exhibit 5).Coaches are well-informed and trained inadvance and fully linked to the organization andthe feedback process. Coaches in these organiza-tions are integrally involved with the manager inbuilding and following through on an action plan.

One executive described his experience work-ing with an expert coach. "I read and reread myfeedback report. What our outside facilitatorfound in that report was astounding - connectionsbetween practices and themes about my manage-ment behavior that were stunningly accurate."

Only 25 percent of higher-benefit organizationsuse external coaches, compared to 50 percentof low-benefit companies. In a related surveyof 77 participants involved in the 360 feedbackprocess, only 4 percent reported having extemalcoaches. This increased use of internal resourcesrepresents a striking change from the early daysof 360 feedback - when an extemal psychologistworked one-on-one with high-potential execu-tives and managers, explaining the survey feed-back and developing a plan. This phenomenonmay have resulted from the proliferation of 360feedback to all levels ofthe organization, makingit difficult to justify the financial impact of usingextemal coaches for many. Now. external coach-es are more often used to train intemal partici-pants to be effective coaches - delivering effec-tive feedback and building development plans.

HUMAN RESOURCE PLANNING 5 I

The trend may reflect a growing understandingof the role of HR staff as a strategic businesspartner. But it also implies that 360 feedbackworks best when the best-informed resources areinvolved - the supervisor and HR staff in con-junction with the participant - and able to main-tain regular contact and follow-up on an ongoingbasis. In a follow-up survey of 360 feedbackparticipants, 70 percent reported that having acoach helped them make more effective use oftheir feedback results.

EvaluationDespite the time, cost, people, and resources

involved, many organizations do not evaluatethe effectiveness of the 360 feedback process.Any other aspect of a company's functioning -from marketing to operations - would be underenormous scrutiny for results based on such aninvestment. In fact, evaluating the effectivenessof 360 feedback was the most discriminatingpractice in our survey (see Exhibit 9). More than55 percent of the higher-benefit organizationsevaluate their 360 feedback process to a greatextent compared to the 65 percent of lower-benefit organizations who did no evaluation.

EXHIBIT 9

Evaluation Is an Important Part

High-benefit

The companies who do evaluate the processoften build this assessment into a regular organi-zational climate or health survey to determinethe alignment of participant behaviors with orga-nizational goals. In one higher-benefit company,focus groups were utilized to revalidate the

competencies and gain information on how help-ful the process was to participants and the impacton behavior. Another conducted a survey ofparticipants, HR staff, and customers regardingawareness of the process, its importance, theirparticipation and satisfaction with the results.

Future Research: Using 360 to Assess 360Many aspects of the 360 feedback process

require further research. We are currently con-ducting research on how the participant viewsthe 360 feedback process. We believe we shoulduse a multi-source feedback approach to gaininformation about 360 feedback from the organi-zation, the participant, direct reports and peers,and customers.

The OrganizationWith the increasing customization of 360

feedback instruments and the tendency topenetrate at many levels of the organization,companies will have more reliable data ongroups of participants to measure progress overtime. For example, companies that have accesslo the resultant database from the 360 feedbackprocess can conduct organizational analyses todetermine und assess differences between func-tions and divisions. Some organizations use thedatabase to determine strengths and weaknessesby organizational level, tenure, performance, orpotential. In some cases, these analyses are usedto determine training and organizational develop-ment requirements across the organization.

Tlie ParticipantAfter conducting the organizational study,

we extended our research to examine how theparticipant views the 360 feedback process. Wecompared the participants' views with that of theorganization on the five categories described inthis article - purpose, procedures, resources,coaching, and evaluation. Preliminary findingsshow that participants do feel they received hon-est feedback, gained self-insight and an under-standing of how they were perceived by theorganization, and were able to build a personaldevelopment plan to improve performance.Participants recommended that the process beimproved by providing more coaching opportuni-ties, increasing commitment from the organiza-tion to the process, and ensuring that the feed-back is confidential or used for development,not pertbrmance. Many of these suggestions


represent the best practices that we found in ourorganizational study.

While both the organization and the participantindicated that suff'icient communication existsabout the 360 feedback process, participants andorganizations viewed the purpose of the processdifferently. Organizations in the study indicatedthat the 360 feedback process was being usedfor individual development, while participantsbelieved the process was being used for individ-ual development, performance appraisal, com-pensation, and team-building. The opportunityclearly exists for organizations to communicatemore effectively the purpose of 360 feedback,ensuring a climate of trust and shared under-standing about the process.

Additional research is needed to understandmore fully the value of 360 feedback to partici-pants and the differences and similarities betweenthe organization's and participants' views.

Direct Reports and PeersThe existence of participant individual devel-

opment plans provides organizations with theopportunity to measure progress at the individuallevel. Some organizations are beginning to usefeedback from direct reports and peers to mea-sure the change in participant's behavior overshort periods of time. Eor example, if a partici-pant is targeting his or her development effortsat improving cross-functional teamwork on keyprojects, requesting periodic feedback from peerswould help keep his or her development effortson track. Direct report information can be usefulfor managers who are working on improvingtheir style or behavior with subordinates. Onecompany also uses feedback from direct reportsto help managers having difficulty working later-ally with others. In this case, feedback fromdirect reports in both functions can demonstratethe mixed messages received from senior man-agers regarding the importance of teamwork.

In response to the desire of companies tofocus on actual improvement at the individuallevel, companies have begun to assess the retumon investment from the 360 feedback process.This trend has emerged as organizations try tojustify the costs associated with 360 feedbackand seek more immediate and objective signs ofresults. Companies now have access to tools thatmeasure the retum on investment and the degreeof individual change over the period before, dur-ing, and after implementing 360 feedback anddevelopment plans. These tools are designed to

reveal even small changes in skills and behav-iors, avoiding the typical one-to-two-year delayfor a repeat survey.

CustomersInformation about the value of 360 feedback

to customers and customer input regarding theusefulness of the process are nonexistent, in partbecause the number of organizations includingcustomers in their surveys is proportionately low.Customer satisfaction surveys could provideinformation to help organizations target the 360feedback process, just as organizational climateand health surveys do today. Benefits to the orga-nization and customer would result from anincreased focus on measuring progress, includingongoing communication, the demonstration bythe organization of real desire to change, and aclear commitment by both parties to the cus-tomer-company partnership.

Learnings from the preceding research modelwould not only benefit the participant in his orher quest for improvement, but would also yielda substantial benefit to the organization. Asorganizations begin to gain input from multiplesources about the effectiveness of the 360feedback process, they will have real proof thattheir investment of time and money is payingoff. Individual and organizational issues as wellas alignment of the employees to strategic goalscould al! be assessed, with progress measuredover time. The culture of the organization wouldbenefit from more open communication and anongoing focus on learning and improvement.

Roles In the Organization:A Business Partnership

The tendency of organizations to exert controlover each aspect of the 360 feedback processrepresents a .shift from the external to the inter-nal, changing the roles of line managers, internalHR staff, and the external consultant. The rela-tionship between supervisor and employee ispositively affected, as the 360 feedback processhelps to create a culture of ongoing learning.Managers who are in open communication withtheir staff and in ongoing dialogue regardingdevelopment and work-related improvementshave incorporated human resource managementas part of the job. Eor the HR executive, the 360feedback process offers the opportunity tobecome a business partner, defining organiza-tional capability and the individual competenciesneeded to achieve strategic objectives. Business


and HR executives work as a team, using 360feedback as a tool for developing talent andmanaging change.

Effective implementation of a complicatedHR system such as 360 feedback represents asizable administrative and management challengefor HR - designing the feedback to reflect corpo-rate values, selecting participants, approvingraters, training both in the process, and counselingspecific employees. The role of the external I/O

EXHIBIT 10

p60-Degree FeedbackFocus on • Use 360-degree feedback as aParticipant developmental feedback tool.Development • Suppress the inclination to link it

with compensation or performanceappraisal unless the organizationalculture is fully supportive and clearthat development is the top priority.

Align • Link the process and align withto the strategic imperatives.Business • Build business-focused competencies

and customize specific jobs, levels.and functions.

• Involve the customer.

Maintain • Exert control over the nominatingControl process.

• Target the participant with thegreatest need and/or piitcntial.

• Approve the manager's selectionof raters.

• Train all participants in advance toensure accurate and honest feedback.

• Decide in advance who will see theindividual results and communicatethis carefully - sharing results withthe supervisor can create an atmos-phere of openness and accountabilitybtit can also lead to intlated ratings.

LeverageResources

BuildCoachingCapability

• Involve the customer to createan environment of continuousimprovements.

• Get senior management supportand provide enough money, time.and people resources to make 360a success.

• Coaches are key - train them.Consider using external resourcesto train your participants to coachrecipients.

Return on • Evaluate the effectiveness of 360Investment in your organization to justify

the investment and learn individualand organizational trends to targetin the future.

psychologist changes as well, utilized less forone-on-one coaching and more as a trainer oftrainers, helping internal coaches learn feedbackand counseling skills.

Talent development is a top priority for mostbusiness leaders today. When implemented well,360 feedback can have the power to leverageindividual talent to meet organizational goals(see Exhibit 10). Organizations that can linkthe process to overarching goals, secure seniormanagement support, manage the implementationof key procedures and processes from communi-cation to training and ongoing support, andevaluate results have the opportunity to createa workplace where participants and mangershave a clear understanding of how they mustwork to fulfill organizational goals.

Biographical SketchesEvelyn Rogers holds a Ph.D. in psychologyfrom Hofstra University and has worked in thefield of industrial and organizational psydiologyfor more than 20 years. In addition to serxnngas manager of management development atPepsiCo, she was senior vice president ofWorldwide Human Resources at Young &Rubicam. Her Greenwich, CT-based firm,E. Rogers Associates, specializes in strategichuman resources management, executiveassessments, career and succession planning,competency modeling, pejformance management,and team development and effectiveness.

Charles W. Rogers is senior vice president, humanresources, for Pepsi-Cola North America andhas been with PepsiCo .since I97H. A graduateof Harvard Business School's PMD program,Mr Rogers is a frequent public speaker onhuman resources issues and is a memberofthe Conference Board's International HumanResources Council.

William Metlay is professor of psychology anddirector of industrial/organizational psychologyat Hofstra University. He is the founder andpresident ofthe Center for OrganizationalExcellence, a consulting company specializingin worker productivity and satisfaction, productand sen.'ice quality, and customer satisfaction.

ReferencesChiimbers. B.Ci. et al. "The War for Talent." The McKinsey Quarterly.3: 44-57.

Welch. J. (200!). Straigklfrnni the Gul. New York: Warner Books.


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