Evaluating employee performance in the workplace is an essential part of running an organization successfully and optimally. Analyzing the performance of an individual in a company as to their skill levels and potential for future growth are part of the performance evaluation process. There are several benefits to employing a robust employee performance system. Here’s a look at a few of them:

• It helps the management understand the strengths and weaknesses of an employee.
• It can guide the decision-making process when setting compensation and salary, providing raises, etc.
• It assesses an employee’s level of growth and development in terms of their skill and roles in the workplace.
• It serves as a platform to motivate employees
• It helps align the goals of the employee with organizational goals.

Typically, organizations use some performance review process to ensure that the workforce is performing as expected.

Performance Appraisal Methods

Here are a few different performance appraisal methods that organizations commonly adopt.

• Behaviorally anchored rating scale (BARS) – This system uses predetermined standards to act as a reference against the performance of an individual in an organization.
• Psychological Appraisal – Under this method, a psychologist analyzes the qualities of an individual in an organization to assess their future potential.
• Management by objectives (MBO) – This strategy involves managers and employees identifying goals and objectives to be targeted over a specific timeframe. At the end of the period, we assess the individual’s performance based on how they achieved their targets.
• 360-Degree Feedback – This is a multi-faceted approach to understanding the performance of an individual. Feedback is collected fr,om the individual’s peers, coworkers, managers, and customers to assess their competence.

Since the earlier annual performance reviews do not suffice anymore in this digital era, a more frequent and comprehensive feedback system is becoming more popular, such as the 360-degree performance appraisal system.

Also Read –> 6 Effective Ways to Conduct 360 Degree Feedback Process

Advantages of 360-Degree Performance Appraisal

There are a few strong reasons why the 360-Degree Feedback method of performance appraisal is gaining prominence in modern workspaces.

• The 360-degree performance appraisal system creates room for employee development by providing individuals with both direct and indirect feedback. Employees receive feedback from anonymous sources; they can accept information that may be otherwise difficult to process. This enables individuals to receive negative feedback with a positive attitude and adapt their behavior and approach to better suit the demands of the workplace.
• It makes for a holistic form of assessment. Since the information collected on each employee is from multiple sources, from different departments and employee levels, the scope is broader and has the potential for higher accuracy. It is possible to uncover factors that may otherwise go unnoticed under more typical performance appraisal methods.
• It develops a level of self-awareness among employees. As employees receive plenty of information regarding their behavior through different sources of feedback, they have the opportunity to journey inward to understand what they can do to improve their skills and character for that suit their workplace.
• The 360-degree feedback process enhances productivity and professional relationships. Since so much feedback and constructive criticism are gathered from coworkers, employers, supervisors, customers, and other additional sources, employees can be more open in the workplace. It encourages a growth culture and offers greater visibility into their performance.
• It creates transparency within the organization and establishes trust. The 360-degree feedback improves the level of trust between coworkers and the management of an organization. This results in creating a more positive working environment, improved productivity, and even spikes in revenue due to overall development in the organization’s efficiency.

Disadvantages of 360-Degree Performance Appraisal

Although the 360-degree feedback method has proved to be a very effective performance appraisal solution, it does have a few drawbacks:

• It creates unhealthy competition between employees and exposes personal biases. Since the trade of feedback can also be anonymous, employees who harbor personal grievances and general dislike of their colleagues can vent their feelings in a manner deemed unprofessional.
• It neglects positivity. When used incorrectly, the 360-degree feedback system makes it easy to play the blame game. Organizations may use this tool only to point fingers at an individual and demotivate the employee, leading to a poor working environment and decreasing productivity.
• It can be time-consuming. Due to the nature of the feedback process that involves collecting information from multiple sources, it takes a lot of time to carry out these assessments finally.
• It can create feelings of mistrust among employees. In cases where managers fail to communicate their findings from the feedback process, employees tend to consider the whole thing as an exercise in futility that only seems to consume time without providing any tangible returns.

To wrap up

Understandably, the 360-Degree Feedback method has plenty of advantages and appeal when carried out properly, with a few inefficiencies. Fortunately, we can iron out these wrinkles in the system with automation. With a fully-automated, intelligent software, we can accomplish the review process quickly and with minimal HR intervention. And, investing in such a solution makes it worthwhile to establish a focused, motivated, and highly productive workforce.

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Relevant Articles:

1. Guide to 360-Degree Feedback Evaluation
2. Why Should Companies use 360-Degree Performance Appraisal
3. 360-Degree Performance Appraisal Method Advantages and Disadvantages
4. What are the Best Practice Guidelines for 360-Degree Feedback
5. 6 Effective Ways to Conduct 360 Degree Feedback Process