The Pros & Cons of 360 Performance Reviews for Your Business

As the traditional annual review loses ground, additional approaches have emerged to allow for more comprehensive feedback for employees. One of those evaluation tools is a 360 performance review. With this method, employees receive input from a variety of others they work with regularly, not just their manager. So what do you need to know to decide if this is the best type of performance evaluation method for your company?

At Complete Payroll Solutions, our certified HR professionals assist companies with all aspects of managing their workforce, including performance reviews. We know that each company is unique, so a 360 performance review isn’t necessarily the best approach for you. To help you understand what these tools are and whether they may be right for your business, here we’ll discuss:

What is a 360 review
What is the purpose of a 360 review
How do you write a 360 performance review
What are the benefits and drawbacks

After reading this article, you’ll know if 360 performance reviews are a good tool to try with your employees.

What is a 360 review?

A 360 performance review provides an employee the opportunity to get feedback on their performance, skills, and contributions from a group of individuals – typically 6 to 12. Those who usually weigh in may include:

Direct manager
Peers
Direct reports
Managers from other departments with whom the employee regularly works
HR staff
Customers

With a 360 performance review, typically, these individuals will be asked for input on an employee’s soft skills like decision making, listening, readiness to help, time management, accountability, and problem solving. Often, but not always, they are anonymous in order to encourage participants to give more candid feedback.

What is the purpose of these reviews?

To give employees a more holistic view on how well or poorly they’re doing, a 360 review is designed to expand feedback beyond just a manager’s input. By soliciting input from several other individuals, the employee often gets insight into topics beyond just whether work was completed and how well.

With this additional feedback, employees can get a more accurate picture of their impact and contributions. From there, the manager and employee can identify how to overcome challenges, build the worker’s strengths, and strategize on how to achieve their career goals.

How do you write this type of review?

When you adopt a 360 performance review approach, you’ll first have to establish a set of questions that you’ll ask each person for consistency. When selecting your questions, again, keep in mind that this type of review is less performance-focused and intended more to understand their soft skills. To solicit this type of feedback, you can ask closed- or open-ended questions or a combination of both.

Some examples of closed-ended questions are:

Does this person exhibit strong leadership skills?
Does this person prioritize teamwork?
Is this person open to receiving negative feedback?
Does this person communicate clearly and effectively with team members

For these, you may want to provide a scale for rating such as poor, neutral, good, or excellent.

Open-ended questions include:

Are there any interpersonal skills the employee lacks and should work to improve?
Do you believe the employee shows motivation and drive to complete their tasks effectively?
How well does the employee adapt to changing priorities?
What would you see as their core competencies?

With these questions, you’ll want to solicit written comments.

Once you have the questions, you’ll want to determine who you’ll invite to assess the employee. As we discussed previously, you’ll want to select a range of individuals to get insight from all angles for a 360-degree view. After you get all the responses, review the feedback to look for patterns. When you hold your review meeting with the employee, you can share all or some of the results to show both positive and constructive feedback. In that way, these reviews will help the employee learn ways to improve and advance in their role.

What are the benefits and drawbacks of a 360 review?

The 360 performance review has both several pros and cons you’ll want to consider before deciding to adopt this approach in your company. Some of the most common include:

Pros

Employees can get a broader, more well-rounded assessment
It can encourage better teamwork because individuals will want to strive to be better collaborators
The review promotes self-awareness by uncovering issues that may be hindering a worker’s growth, thereby providing an opportunity to grow
The anonymity may allow for more candid input and help employees understand where they stand

Cons

It can take a lot of time to thoughtfully participate, which is one of the reasons why Basecamp banned this type of review in 2021
A review may be impacted by internal politics so might not be accurate
Depending on the results, employees may have resentment towards others, leading to a negative culture
While anonymity has its upsides, it may also cause employees of a close-knit team to be afraid of being too critical, impacting the honesty of the review

How to Best Implement a 360 Performance Review at your Organization

A 360 performance review is one of many approaches available today to provide feedback that promotes employee growth and development. If you’ve decided that you want to try 360 performance reviews, there are some important steps to follow to maximize their effectiveness.

Make sure the employee understands the purpose and process of a 360 review
Use the outcome to support goal development and provide resources to improve
Use them in conjunction with other types of employee evaluation

At Complete Payroll Solutions, 360 performance reviews are one of several tools we offer to help companies provide feedback to employees. Read our next article on our performance review offerings to learn more about our services. No matter what approach you take, providing constructive feedback is a sign of a good manager. Want to know the other signs? Read our guide to find out about other ways you can avoid being a bad boss.