about the use of
For Pay, Promotion, or Layoffs vs Development only Decisions
Christine M. Fahnestock
Multi-rater surveys -"360's" have
been used long enough to be considered, by thoughtful executives, as a management
tool that is able to impact management performance and productivity.
Business people, as always, drive for relevance and
accountability in the use of management tools such as 360’s.
Behavioral scientists are concerned about ethical application and
the tendency of business people to use 360’s for purposes beyond what
they can actually do.
I will attempt to
distill and summarize information from varied sources including the
views of current literature, national conference presentations,
articles, marketing materials and an independent benchmarking study [conducted
by Fahnestock & Associates], which included questions about the
issue of using 360’s for “development vs administrative
monograph from Development Dimensions International (DDI) provided an
useful review of data. Also
taken into consideration was information gleaned from many discussions
with fellow practitioners and clients, as well as my own first hand
experience. Any quotes
appearing in this article are from the a DDI monograph referenced on the
purposes for using 360 degree instruments are as varied as the
organizations that use them, such as for:
- Individual performance
- Training needs analysis
in the aggregate
- Career planning
- Culture change
- Team development
benefits of 360 degree feedback are numerous, such as to:
respect for employee opinions; increase employee involvement
values through the dimensions chosen
more effective work relationships
a basis for individual development planning
and resolve conflicts
While very informative and motivational for development, the 360
degree method has not been proved successful for decisions tied directly
to pay, promotions, selection or layoffs.
Some of the reasons are as follows:
1. The 360
evaluations are based on observations in the natural work environment.
drawbacks of this are:
Some environments ‘dampen’ or constrain job
Performance is based on the current job role only
Observations are based somewhat on chance opportunities for
2. The observers in
the 360 method have no special training, may use differing standards
and, therefore, can have low inter-rater reliability (agreement).
For a comparison, let us consider another well known multi-rater
method; the assessment center. Assessment
centers engage trained observers to watch all candidates perform the
same tasks and simulated job samples.
It compares to 360 surveys as a multi-rater method as follows:
centers provide the opportunity to observe performance in situations of
2. Performance is
scored by trained observers who can categorize behavior
centers “have a well established track record as strong predictors of current
and future job performance.”
In general, multi-rater methods such as assessment centers and 360
degree instruments “can complement each other, but they are not
interchangeable.” The 360
ratings “are simply averages of perceptions...[whereas] assessment
centers are designed to measure proficiencies and potential”.
Further comparison is useful as follows.
The assessment center method has been researched, legally
defended, and widely accepted as a valid selection and promotion tool.
The 360 degree survey method has performed spectacularly as a
tool to improve self-perception and motivate individuals for development
and performance improvement. However,
it has not been adequately supported as a basis for administrative
decisions such as pay, promotion, selection or downsizing.
Additionally, when 360’s
are used to drive decisions about pay, promotion or layoff’s,
“people [who are] not in positions of accountability and authority
over the target become responsible for that person’s fate…Although
 assessments can be very helpful for performance management, this
does not mean they should be tied directly to decisions about pay and
promotions. Such uses
should be avoided.” Using
360 evaluations “for downsizing is especially inappropriate and
fraught with risks to everyone involved.”
These reasons make them very hard to defend when used in
decisions associated with rewards or punishments.
The use of 360’s does
prove very beneficial for the developmental purposes listed at the beginning of the
article. Litigation in this area has made some producers of 360 instruments, as
well as many practitioners, very cautious about recommending them for
use in pay, promotion or layoff decisions.
* Multirater Assessment
and Feedback: Applications, Implementation, and Implications
by Ann Howard, Ph.D., William C. Byham, Ph.D, and Patrick
Development Dimensions International; Pittsburgh, PA
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November 09, 2012