A rounded view

Summary

360-degree feedback is increasingly popular, and is in tune with today's flatter management structures and the trend for devolving responsibility for personal and professional development to the individual.

Here, we examine how 360-degree feedback has worked for Brighton and Hove Council and accountancy firm BDO Stoy Hayward. Both organisations stress the need for careful planning and introduction of such schemes. They report that, among its main benefits, the technique provides: a tool for measuring departmental effectiveness; a strategic approach to training; a focus on self-development and action learning; and a means of reinforcing culture change.

Millions of UK employees undergo a formal performance review each year. Large and small organisations invest much management time, energy and resources in appraisal schemes and development programmes for staff (See New ways to perform appraisal ). An increasingly popular form of assessment is 360-degree feedback, also called multirater feedback or full-circle appraisal, which is used in both the public and private sectors.

Peter Ward, a management consultant who has extensive experience of introducing 360-degree feedback into a range of organisations, claims: "It is a genuine innovation rather than a repackaging of older techniques." He believes that 360-degree feedback is the only means of comprehensively revealing how successful an individual is in all their important work relationships.

Traditionally, appraisal falls to the line manager, but 360-degree feedback derives its information from subordinates, peers, managers, customers and self-assessment. "It's based on your normal work and you cannot get closer to real life than real life itself," comments Ward.

Valerie Garrow, a researcher at Roffey Park Management Institute, claims that the business culture of the late 1980s and early 1990s was ripe for 360-degree feedback1. As organisations moved to flatter management structures with multiple reporting lines, 360-degree assessment was seen as giving a truer picture of someone's performance than relying on the views of a remote line manager.

This form of assessment also fits the vogue for putting responsibility for personal and professional development on to the individual. "Senior managers often don't know how they are getting on at work because people are frightened to tell them and there is no mechanism to do so," says Garrow. "360-degree feedback is an opportunity to learn some home truths, and can be part of the psychological contract, because giving people performance information makes them more employable."

Questionnaires are commonly used to gather the data, though many companies also seek extra qualitative information by means of open-ended questions or interviews. Respondents are usually assured of anonymity - this is particularly important for subordinates asked to comment on their manager's performance. A report is then generated, often using a computer, the results discussed with the appraisee, and a plan of action produced.

The theory of 360-degree assessment is that receiving feedback on how people you work with see you encourages self-awareness, and you will act to improve your performance. Supporters of 360-degree feedback also claim that the system can increase motivation, improve teamworking and communication and develop a more supportive environment.

Does more mean better?

But peers and subordinates can be just as biased as a line manager, and feedback from more than one person does not mean it will be any more objective. Ward does not see this as a problem: "360-degree feedback is a glorified opinion survey, but subjective feedback is useful."

Ward says that, in his experience, it is rare for colleagues to gang up on an individual, but Garrow points out that the risk is apparent from the term used to describe 360-degree feedback when it was introduced into the US armed forces - the "screw your buddy system". Ward acknowledges that 360-degree feedback can be personally threatening and needs to be approached with care. "Because it's so personal, it's very powerful. And it may contain surprises that the individual may need help to come to terms with if they're not to reject the information or feel worse about themselves."

Why do 360?

Ward says that 360-degree feedback does not purport to offer a solution to performance problems or issues. It is a measurement device that can help personal development, improve a team's performance and reinforce company values.

Enthusiasts assert that, if properly used, the technique can facilitate any of these strategies, but failure to think about the aims and communicate the intent will lead to confusion.

Colin Woodward, former senior human resources manager at the London Borough of Hackney, agrees with this assessment (see box). "If you're just doing 360-degree assessment because it's the latest trend, then why bother? Organisations should have specific objectives. You can't just take a 360-package off the shelf."

Christine Farrell, professor of business studies at Roehampton Institute, says: "360-degree feedback will struggle in any organisation that has a low level of openness and trust." Research by the Institute of Personnel and Development suggests that organisational culture is the main influence on whether 360-degree feedback works effectively or badly (see box).

Some personnel specialists are concerned that 360-degree feedback is increasingly being used less as a developmental tool and more as part of the formal appraisal process. They point to research showing that when people know that their comments are used for evaluation rather than for development purposes, and particularly when they might influence someone's pay award, over one-third give a more favourable assessment.

In Ward's opinion, any problems that arise are because of how 360-degree feedback is implemented, rather than any flaws in the process itself. "Good planning and communication are key to successful implementation. And the issue is what you do with the information once you have got it - that's really the beginning of the process, not the end."

Here, we look at the introduction of 360-degree feedback in two contrasting organisations: Brighton and Hove Council, which is responsible for delivering a wide range of services to the public, and the UK's sixth largest accounting firm, BDO Stoy Hayward.

BRIGHTON AND HOVE

On the formation of Brighton and Hove Council in 1997, the personnel department asked managers to undertake a self-assessment exercise against the Management Charter Initiative (MCI) national management standards. The council then decided to introduce 360-degree assessment to gain a comprehensive picture of its managers' strengths and areas where training, development and support should be provided to aid improvement.

Assessment not appraisal

Clearly, self-assessment may not be that accurate: managers may think they possess certain skills but their colleagues or subordinates would disagree. The 360-degree form of assessment not only allows a manager to say what their skills and weaknesses are but it also takes into account the views of those working with and for the manager.

Because some staff had previously had unhappy experiences of 360-degree appraisal, a lot of effort went into "selling" the council's scheme. Staff were assured that what was being proposed was 360-degree assessment for personal development purposes and not a formal 360-degree performance appraisal. So any information generated would be used by the personnel department solely to provide a development programme for managers, and not for any other purpose.

Cambridge Management Centre, which won the tender to run the scheme, devised a programme tailor-made for the council, which wanted a 360-degree assessment against the national management standards rather than a general assessment. "We didn't want a load of data which bore no relation to what the council had signed up to," comments Jenny Knight, the authority's corporate personnel officer.

Departmental directors nominated the managers to be assessed - these included people responsible for policy and strategy, as well as those who manage staff. The 360-degree assessment programme covers managers who work at first-, second- and third-tier levels of the authority; supervisors and first-line managers are not included.

Cambridge Management Centre runs a presentation for each group of managers to inform them about the process and remind them of its purpose. Each person being assessed is asked to give the 360-degree questionnaire to their line manager and up to eight others - so up to nine people may be involved in each assessment. Participants are asked to ensure that they receive at least five completed questionnaires, as well as their own, to provide unambiguous data.

The questionnaire has 63 questions covering nine key areas, and respondents are asked to grade colleagues using the following options:

  • positive;

  • area for improvement;

  • not relevant; and

  • don't know.

    Additional comments are encouraged, as these clarify and expand the results. Staff complete forms anonymously and the information is sent directly to the consultants, who handle all the administration, set up the meetings and send out forms. The managers and consultants correspond directly, so nothing is filtered through the council.

    The manager being assessed also takes a well-known psychometric test, the Myers Brigg Type Indicator, to provide additional information about their approach to problem-solving and decision-making. When all the results are in, the manager has a detailed one-to-one feedback session with a Cambridge Management Centre specialist, lasting about three-and-a half hours, during which the 360-degree assessment results are shared and discussed and integrated with the results of the Myers Brigg test. The aim of the session is to examine any apparent inconsistencies, explore themes and links between data and provide a context for the data.

    Personal feedback

    After the one-to-one meeting, individuals receive a written summary detailing their strengths and development needs in each of the MCI competence areas. The report also makes suggestions for suitable development activities where appropriate. The consultants report back to each group of managers being assessed, informing them of the nature of the group, which personality type predominates and the major themes about their management style.

    Asked how people are helped to cope with negative feedback, Knight stresses that the consultants are highly skilled in giving the feedback and adopt a constructive approach. In fact, Knight says, staff have found the feedback interesting and have wanted to share the results with colleagues. The consultants do offer a confidential counselling service, though nobody from Brighton and Hove has used it.

    Knight is happy that the personality test is run in conjunction with the 360-degree appraisal: "The psychometric testing supported people's comments and it was very interesting to see that we had a particular personality type at certain levels in the organisation. In fact, it may be quite different from those working at a lower level, so it helps you to think about how you sell your decisions to people who are very different from you."

    The first set of managers, 60 in all, were assessed during May 1999, and some 540 members of staff were involved in this first assessment. A further two groups have subsequently been through the process, and by the middle of this year some 1,620 council employees will have been involved in the assessment of managers against the MCI standards.

    When all the managers have received their feedback, the council is given a report summarising the areas of strength plus the development needs in each of the different levels of the management population, together with recommendations for activities and timescales for addressing areas of weakness. This report does not identify any individuals, but looks at aggregated anonymous data.

    "The report gives us a snapshot of where we are against the management standards we want to have in the authority, so our corporate needs are identified," says Knight. The consultants can analyse the data to see a group of managers' top 10 strengths, and identify the areas that need improvement. These strengths and weaknesses can be further broken down by management level or department to give the organisation a better awareness of the state of its management.

    Whose responsibility?

    The report helps Knight formulate her long-term development strategy and provide a corporate response to the needs that have been identified, but the message to individuals is that they have personal responsibility to develop themselves as managers. It is up to them to deal with any gaps and shortfalls in their skills and to develop their competencies with support from their own line manager, via appraisal.

    The council is trying to move to a culture of devolved responsibility, where managers have to develop themselves and their staff, rather than development being seen as a personnel issue. "Our approach is: you've signed up to a set of standards, you know what your weaker areas are, so what are you going to do about it?" says Knight.

    Training programmes are drawn up at a corporate level, and the personnel department is currently reacting to the assessment findings in addition to national initiatives and new requirements on the authority. The department also responds to requests from staff for support in particular areas as well as, for example, requests for project- management training.

    Knight believes that because Brighton and Hove was a new authority it was easier to get the 360-degree assessment accepted; people were enthusiastic and excited by the prospect, and were not threatened. But she stresses that this was also because a lot of time and effort went into getting the organisation ready for the process, by explaining its purpose, marketing the idea through meetings and articles in the staff magazine, and establishing a management development working group, with two representatives from each department.

    What's changed?

    It is easy to fall into the trap of putting on training courses for the sake of it, and while courses can be very motivating, people often go back into the workplace and carry on much the same. The authority adopts a strategic approach to training by doing research to find out what staff need - which is "discerning shopping", according to Knight.

    The council now favours self-development and action learning rather than training course attendance. Managers belong to groups whose members are drawn from across the local authority. They get together to talk through management issues and work with colleagues to find solutions. Knight says this is an active and supportive way of learning which encourages networking and devolves responsibility to individuals.

    To help managers gauge its effectiveness, the council's 360-degree feedback scheme was designed with a built-in capacity to be evaluated. To provide training and development, organisations need to know the skills of their staff and decide what they want people to be able to do and what the organisation wants to achieve. "Many organisations just lay on training courses, but how can you evaluate them if you don't know what position you are starting from? We are saying we know where people are now and where we want them to be and we have to provide development that enables people to get there."

    Knight says that the culture of the authority has changed as the general understanding of the logic behind introducing standards and the purpose of putting people through 360-degree assessment has grown. At the beginning, people had to be convinced. Now, they are queuing up to be assessed as they see it as beneficial for both the organisation and themselves.

    Organisations wishing to introduce 360-degree assessment will need to embark on a major selling and marketing exercise to staff. Knight says it is crucial to secure both the understanding and commitment of the most senior managers, who should be the first to go through the process. "Where organisations can go wrong is that the top level say they are deeply committed, but they don't actually know what they are signing up to," comments Knight. The council's trade unions were supportive of the scheme, as they perceived many organisational problems being due to a lack of confidence in managers.

    Knight advises that the introduction of 360-degree assessment needs to be entrusted to an individual who is perceived as trustworthy by the organisation, so staff know there is no hidden agenda. "The big problem is just doing 360-degree assessment and not being clear about its purpose and outcomes. A key thing for us is that we are only assessing against existing management standards. We are very clear about what people are being assessed against and why."

    BDO STOY HAYWARD

    Accountancy firm BDO Stoy Hayward has a flat management structure, with employees moving from one team to another to work on different projects. The organisation has many trainees undertaking courses of study for qualifications, and staff are expected to play a key role in developing one another.

    BDO wanted to enhance staff development, and decided that 360-degree appraisal could help: "We felt it would give a more complete picture, rather than a one-way view of the world," says Jo Adams, who was the training and development manager with responsibility for introducing 360-degree feedback into the organisation.

    The company introduced 360-degree appraisal in 1996, and over the subsequent four years it has made some changes to the programme. Initially, the scheme was just for BDO's partners; in the following two years it was extended to an additional 350 managers. In 1999, BDO introduced a competency framework, with which it aligned its 360-degree appraisal scheme, and the programme was extended to cover all qualified staff, 600 in all. This year, all staff, except for first-year trainees and recent recruits, will undergo a 360-degree appraisal.

    Computer-aided assessment

    Competencies are based on an "excellence framework" of core areas of behaviour, values and skills that the company feels are important for its future. The framework comprises three areas:

  • finding and minding clients;

  • right person for the job; and

  • ensuring our future.

    These are broken down into different areas. The "right person for the job" area has three dimensions: developing, leading and performing. In all, there are 10 dimensions against which people are scored.

    At the same time that BDO was developing its competencies, it was also implementing a new computer package for its human resources function, and the company used new technology to help it implement an in-house solution based on its excellence framework.

    The competencies are designed to look at outputs - what you see people doing - rather than looking at inputs. The behaviours under the three areas of the excellence framework differ according to which of six job families people belong to: partner; senior manager; manager; qualified or equivalent; trainee or equivalent; and secretarial and administrative.

    Compulsory 360

    At BDO, 360-degree assessment is compulsory for those staff covered by the scheme, though the mechanism for selecting people to give feedback is designed to be fair to the appraisee and the firm. The person being appraised is asked to nominate 10 people with whom they work closely and they will agree, with their line manager, on five people to give feedback. This gives people some control over the list but aims to prevent individuals picking their friends to do the assessment.

    Initially, BDO had between 15 and 20 people giving feedback on an individual, and then cut this back to between 10 and 12. Now, relatively few people - just five - carry out the assessment, because the firm found it could reduce the numbers without materially affecting the result.

    Because of the extension of the scheme to most of the workforce, people still have a lot of 360s to complete - about eight during the appraisal period. Jackie Ward, head of human resources, says that in future the company might stagger appraisals throughout the year, rather than confining them to a particular period, as happens at present.

    Adams says the company made an early decision not to use numbers to rate people. Instead, individuals are rated according to how they demonstrate required behaviour. In relation to each required behaviour, the categories used are:

  • often exceeds;

  • sometimes exceeds;

  • consistently demonstrates;

  • sometimes fails to demonstrate;

  • often fails to demonstrate; and

  • unable to assess the behaviour for this person.

    Assessors grade their colleagues' behaviour against 71 statements, and the form also has a space in which to write comments relating to each section. According to Adams, these form the most useful part of the assessment because they explain why someone scores well or poorly.

    People complete assessments directly on to a computer, which generates an excellence framework profile report, and a graph maps how well staff are performing against the 10 dimensions in comparison with the average of their peers in their strategic business unit.

    Confidentiality assured

    Those carrying out the assessment do so confidentially. Adams says that there was a very long debate about whether it should be anonymous: "As an organisation, we would feel happier with a system where everybody felt they could comment openly. We are looking to move in that direction, but at the beginning we thought people would feel more secure in an anonymous framework."

    At BDO, staff face three different types of appraisal:

  • 360-degree assessment, used once a year;

  • an appraisal meeting, which looks at an individual's overall performance, held twice a year; and

  • assignment appraisals, which are conducted throughout the year.

    So 360-degree appraisal is only part of an array of assessment and development tools used by the company. Adams describes it as: "Just an information-gathering process - it is what you do with it that makes the difference."

    Giving feedback is rated as an important skill at BDO because of the high level of on-the-job training that people receive from their managers and peers. Most appraisers have been through the in-house appraisal course, which offers guidance on how to give feedback and cope with difficult appraisal meetings. So line managers, rather than external facilitators, give individuals the results of their assessment.

    Individual responsibility

    Personnel staff tend to look only at the general trends revealed by the 360-degree assessment, which show the strengths and weaknesses within the organisation. People's results are followed up in their strategic business unit as well as in appraisal meetings. Individuals are encouraged to share their 360-feedback and their subsequent development plan with others. Adams comments: "If you tell others what you are trying to do, it's easier to achieve."

    The company's ethos is one of individuals taking responsibility for their own development. Ward explains that, while the firm makes a commitment to agree an individual's development plan and to help them work towards fulfilling it, the development plan belongs to the individual.

    Development is not just about going on courses. Activities may include one-to-one coaching, seeking assistance from particular people in the business who have a recognised expertise in certain areas, reading articles and visiting internet sites. BDO has developed a library of suggested development activities to help people alter their behaviour, and while this is in its infancy it is hoped it will become a substantial resource.

    Adams says there have been some changes to the culture of the organisation as result of 360-degree appraisal. She claims that BDO is generally seen as an open organisation and that the initiative has been welcomed: "Most people receive the feedback really well and even those who are a little more sceptical - maybe because of their experience with other organisations - recognise it gives a much fuller picture of how someone performs."

    BDO reviews and evaluates how well 360-degree appraisal is working by listening to staff feedback, and by including a question about it on the annual staff attitude survey. Ward says that the firm saw positive results soon after the scheme's introduction: "People who had not realised the effect they were having on others got some valuable lessons from early feedback."

    Linking to reward

    The company is looking to link an element of each individual's pay package to its competency framework and other business measures. While 360-degree appraisal is one of the mechanisms used to assess competencies, the use of other business measures means that this will not equate to a direct link between 360-degree appraisal and pay.

    Such a move is not on the cards just yet, because this year will be the first time that BDO uses the competency framework to review everyone's performance. Adams points out that one of the reasons staff at BDO accepted 360-degree appraisal was because it was introduced for development purposes. For this reason, the company will not be suddenly linking it to reward and, when it does, it will be just one review tool. She counsels organisations against implementing a 360-degree appraisal programme and then rushing into other areas, such as a pay link, too soon.

    Adams stresses that companies planning to introduce 360-degree appraisal must spend time communicating with their staff, especially if it is brought in with new processes such as a competency framework, as in BDO's case. "People need to be told exactly what to expect, how it will affect them and the timetable. If you are shifting the goalposts you have to announce the rules."

    Her advice is to start on a small scale and roll the programme out to enable managers to cope with the repercussions. Staff need to be told what the firm is doing, what it is trying to get out of the scheme and how it is going to be used. BDO introduced the scheme from the top down. This approach helped because managers who had been involved in giving feedback to partners knew how the scheme worked when it came to going through the process themselves. "It also showed the commitment of senior management to the scheme, which is invaluable," according to Adams.

    Ensuring success

    Staff appraisal and development programmes can be costly to design, implement and maintain. Organisations will want to be assured that they will see an improvement in individual and group performance before they decide to invest in a new scheme.

    360-degree assessment can work only if employees decide to act on the information they receive about themselves. Yet, as Roffey Park's Valerie Garrow points out, those people most in need of such feedback are often reluctant to do anything about it. She thinks that this supports the argument for using trained facilitators who present the feedback and then work with individuals on their development plan.

    The Institute for Employment Studies found that a strong development culture, and access to expert counselling or the use of a trained facilitator, is important to ensure the success of 360-degree assessment2. Staff are more likely to accept such schemes when the feedback is used constructively for an individual's own development and not as a stick with which to beat them.

    When 360-degree assessment is linked to performance appraisal, line managers play a more important role and may need to improve their facilitation skills.

    There is, of course, a tension between management control and staff development in 360-degree assessment, because it is a way of reinforcing the management behaviours espoused by an organisation. In common with many organisations using 360-degree assessment, the two subjects of our case studies tie it to a set of competencies that make explicit what the organisation values. For example, the focus at BDO is on promoting the organisation and securing new business.

    Widespread use of 360-degree assessment in an organisation can take up a lot of people's time. Schemes should therefore not be too bureaucratic, with large numbers of questionnaires to collate and score. The use of computers can speed up the process.

    Most 360-degree exercises of a reasonable size need a staff member to be responsible for their introduction. Everyone we spoke to emphasised the need to devote time to planning a scheme, as it is vital that organisations are clear about its purpose and spend time communicating this to staff - this stage cannot be skimped. It is also important that the top echelons of the organisation are seen to back 360-degree assessment, and piloting the scheme with the most senior managers can demonstrate this commitment.

    Both BDO and Brighton and Hove claim that 360-degree assessment has been successful in providing reliable data to inform training and development needs and to measure the effectiveness of departments, as well as reinforcing cultural change.

    1"A guide to the implementation of 360-degree feedback", Valerie Garrow, available from Roffey Park Management Institute, Forest Road, Horsham, West Sussex RH12 4TD, price £6.95 plus £0.71 p&p.

    2"Personal feedback: cases in point", Polly Kettley, Institute for Employment Studies, available from GBS, Isaac Newton Way, Alma Park Industrial Estate, Grantham NG 31 9FD, tel: 01476 541080, price £27 plus £2 p&p.

    The largest unitary authority along the south coast, Brighton and Hove was a finalist in Local Government Chronicle's "Council of the Year" award in 1999. The council's 7,000 employees deliver services to a population of 245,000 from an annual budget of around £200 million. Nestling on a narrow coastal plain, the conurbation extends to the rolling chalkland landscape, a recognised area of natural beauty. Brighton and Hove is a major regional centre for employment, education, shopping, the arts and leisure. Internationally famous as one of Europe's premier seaside resorts and conference centres, it attracts over four million visitors each year.

    www.brighton-hove.gov.uk

    BDO Stoy Hayward is the sixth largest accounting firm in the UK, with 313 partners and more than 2,000 staff. Worldwide the company employs more than 17,000 people. Its principal activities are audit and business advice, tax consultancy, corporate finance and corporate recovery. In 1999 its total fee income rose by 12.2% to £137 million and the annual average earnings of its partners increased by 7.7% to £140,000.

    Its international operation has more than 500 offices in 85 countries.

    www.bdo.co.uk

    360-degree feedback at the London Borough of Hackney

    The London Borough of Hackney has introduced 360-degree feedback to deal with indirect and institutional race discrimination.

    Two years ago the council was faced with the prospect of the Commission for Racial Equality (CRE) serving a non-discrimination notice on the borough because of racial discrimination in its management and employment practice.

    The CRE agreed not to implement the notice if the council implemented a race action plan that included a management development programme aimed at trying to educate people within a multicultural organisation.

    The programme is built around a set of competencies that are based on the qualities needed to manage in as diverse a borough as Hackney. The 360-degree feedback scheme uses the competencies and also encourages anonymous open-ended comments from up to 10 respondents.

    After a pilot scheme last year, all staff in the council, from team leaders up to the level below chief officer, are undergoing 360-degree feedback. The programme focuses on people's strengths as well as weaknesses and external facilitators help individuals develop an action plan for themselves. The council has also established action learning groups where staff can meet to discuss issues.

    The programme has met with a very positive response from staff, and the council hopes that ultimately it will result in more black staff working at senior levels.

    360-degree enablers and inhibitors

    Inhibitors

  • Blame culture;

  • lip service: "do as I say, not as I do";

  • conflict between business pressure and time for feedback;

  • bolt-on HR tool, not an organisational process;

  • conflict with other performance management processes; and

  • incompetent handling of negative feedback.

    Enablers

  • Communication of the purpose;

  • alignment of process to support development;

  • make and take time - senior management commitment and patience;

  • ownership of the process, organisational and individual;

  • encouragement of individuals to share action plans and demonstrate positive change; and

  • reflection on the process and monitoring of its effectiveness.

    Source: "360-degree feedback and organisational culture", Wendy Chivers and Philip Darling, IPD, 1999.