Project report on

“360 DEGREE PERFORMANCE APPRAISAL”

IN PARTIAL FULFILMENT FOR THE DEGREE OF

MASTER IN BUSINESS ADMINISTRATION
DEPARTMENT OF MANAGEMENT
STUDIES BHIMTAL
(SESSION 2011-2012)

SUBMITTED TO: SUBMITTED BY:

Mr. ASHISH BISHT MEGHA KUKREJA
 DECLARATION
I undersigned, Megha Kukreja, student of department of management studies,
declare and confirm that work done by me is original and true to the best of my
knowledge & beliefs.

I declare that this project is my prepared by me and not copied or extracted from
anywhere else. It is the result of my efforts and dedication. This summer internship
project report is just a part of department of management studies and will not be used
else.

Date: Signature:
Megha
 Acknowledgement

First, I would like to thank God, who gave me the courage and patience to complete
this dissertation successfully.

I would like to express my profound gratitude to my family, who have supported and
encouraged me in every stage of this project.

I would like to thank my inspiring supervisor, Mr.Ashish Bisht for guiding me

throughout this project. It was amazing working under his guidance.

Last but not the least; I would like to thank all the children (interviewees), who took
part in the interview. This research would not have been possible without them.
 PREFACE

Industrial Training during studies helps the students to expose themselves to the
industrial environment, which cannot be simulated in the classroom. As the needs of
the industry are changing due to rapid change in technology, management practice,
competitive quality and productivity etc., it makes the students aware of the rapid
developments in the industry.

Summer training has helped me to appreciate the theoretical knowledge gained in

the classroom. It has taught me the importance of punctuality and the sense of
responsibility. It has helped me to understand the psychology of the employees, their
attitude and their approach to problems. Apart from this it has given me good
exposure to the current technology development relevant to my subject of studies.

I avail this opportunity to thank Department of management studies bhimtal for

imparting me the practical knowledge in the industrial field.
OBJECTIVE:-
To evaluate an employee by all the officials whoever connected with him on the job for his
Attitude as well as Job Performance. And to study the following:

1) To .

2) To study different techniques of analysis.

3) To study concept n process of 360 degree in detail.

4) To study prons n crons of 360 degree.

5) To improve the quality in performance

Background
 Contemporary 360-degree methods have roots as early as the 1940s, however, there is
some disagreement regarding the exact genesis of the technique.
 Despite these disagreements, one point that most scholars can agree on is 360-degree
performance appraisal has historical roots within a military context.
 During the 1950s and 1960s this trend continued in the United States within the Military
service academies.
  At the United States Naval Academy at Annapolis, the midshipmen used a multi-source
process called “peer grease” to evaluate the leadership skills of their classmates.
 In the corporate world during the 1960s and 1970s, organizations like Bank of America,
United Airlines, Bell Labs, Disney, Federal Express, Nestle, and RCA experimented with
multi-source feedback in a variety of measurement situations.

360 Degree Performance Appraisals

360-degree performance appraisal process is used as a tool that provides an evaluation about
employees performance. It is based on the opinion of different groups of reviewers who socialize
with evaluated employees. Many criteria must be considered in performance appraisal that may
have different nature and usually present uncertainty. Therefore, it seems necessary and
appropriate to provide a heterogeneous framework adapted to the nature of the criteria. In this
context, criteria can be asses by reviewers, according to their background and degree of knowledge
about evaluated employees. Furthermore, the interaction among criteria, as well as reviewers
weights should be taken into account to ensure an effective aggregation process of the information,
providing interpretable and understandable evaluations.

Performance appraisal process is based on the opinion of different groups

of reviewers who socialize with evaluated employees, since they can truly respond to
how an employee develops his/her job. Moreover, the process includes the opinion of
employee about her/himself (see Figure 1). This kind of performance appraisal process
is so-called 360-degree appraisal or integral evaluation [10, 12, 24] and it overcomes
some disadvantages from traditional evaluation such as lack of objectivity, prejudice or
halo errors, etc

360 degree performance appraisal is also a powerful developmental tool because when conducted
at regular intervals (say yearly) it helps to keep a track of the changes others’ perceptions about the
employees. A 360 degree appraisal is generally found more suitable for the managers as it helps to
assess their leadership and managing styles. This technique is being effectively used across the
globe for performance appraisals. Some of the organizations following it are Wipro, Infosys, and
Reliance Industries etc.
.
360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive appraisal
where the feedback about the employees’ performance comes from all the sources that come in
contact with the employee on his job.

The 360 degree evaluation process provides information to an employee from multiple sources a
circle of stakeholders – peers – supervisor – direct reports – higher mg levels – internal customers
– external customers – vendors – consultants –others, anyone who comes into contact with the
employee and can provide valuable insights and information or feedback regarding the
"on-the-job" performance of the employee. It is good for both development and evaluation. It
can be a very good approach because the information gathered is from so many sources.

Self appraisal gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance. Superior’s appraisal forms the traditional part of
the 360 degree performance appraisal where the employees’ responsibilities and actual
performance is rated by the superior.

Subordinates appraisal gives a chance to judge the employee on the parameters like
communication and motivating abilities, superior’s ability to delegate the work, leadership
qualities etc. Also known as internal customers, the correct feedback given by peers can help to
find employees’ abilities to work in a team, co-operation and sensitivity towards others.
360 Degree Performance Appraisal

Self assessment is an indispensable part of 360 degree appraisals and therefore 360 degree
Performance appraisal have high employee involvement and also have the strongest impact on
behavior and performance. It provides a "360-degree review" of the employees’ performance and
is considered to be one of the most credible performance appraisal methods.

The Comparation between traditional n 360 degree

The Process
Integral components:-360 degree appraisal has four integral components:
1. Self appraisal

2. Superior’s appraisal

3. Subordinate’s appraisal

4. Peer appraisal.

Contribution of different people:

SUPERIORS Contribution:
 The 1st line supervisor is often in the best position to effectively carry out the full cycle of
performance management.

 The supervisor may also have the broadest perspective on the work requirements and be
able to take into account shifts in those requirements

Cautions to be addressed:
 Superiors should be able to observe and measure all facets of the work to make a fair
evaluation.
 Supervisors should be trained. They should be capable of coaching and developing
employees as well as planning and evaluating their performance.

Self contribution:
 Self-ratings are particularly useful if the entire cycle of performance management involves
the employee in a self-assessment.

 The developmental focus of self-assessment is a key factor.

 Approximately half of the Federal employees in a large survey felt that self-ratings would
contribute “to a great or very great extent” to fair and well-rounded PA.

 Self-appraisals are particularly valuable in situations where the supervisor cannot readily
observe the work behaviors and task outcomes.

 The self-ratings tend to be consistently higher. This discrepancy can lead to defensiveness
and alienation if supervisors do not use good feedback skills.

 Sometimes self-ratings can be lower than others’. In such situations, employees tend to be
self-demeaning and may feel intimidated and “put on the spot.”

 Self-ratings should focus on the appraisal of performance elements, not on the summary
level determination. A range of rating sources, including the self assessments, help to
“round out” the information for the summary rating.

Peer’s Contribution:
 Employees report resentment when they believe that their extra efforts are required to
“make the boss look good” as opposed to meeting the unit’s goals.

 Peer ratings have been an excellent predictors of future performance and “manner of
performance”.

 The use of multiple raters in the peer dimension of 360-degree assessment programs tends
to average out the possible biases of any one member of the group of raters.

 The increased use of self-directed teams makes the contribution of peer evaluations the
central input to the formal appraisal because by definition the supervisor is not directly
involved in the day-to-day activities of the team.

 The addition of peer feedback can help move the supervisor into a coaching role rather than
a purely judging role.

Cautions to be addressed:
 Peer evaluations are appropriate for developmental purposes, but to emphasize them for
pay, promotion, or job retention purposes may not be prudent always. Generally, the
identities of the raters should be kept confidential to assure honest feedback. But, in
close-knit teams that have matured to a point where open communication is part of the
culture, the developmental potential of the feedback is enhanced when the evaluator is
identified and can perform a coaching or continuing feedback role.
 It is essential that the peer evaluators be very familiar with the team member’s tasks and
responsibilities.

 The use of peer evaluations can be very time consuming. When used in PA, the data would
have to be collected several times a year in order to include the results in progress reviews.

 Depending on the culture of the organization, peer ratings have the potential for creating
tension and breakdown rather than fostering cooperation and support.

Subordinates contribution:
 A formalized subordinate feedback program will give supervisors a more comprehensive
picture of employee issues and needs.

 Employees feel they have a greater voice in organizational decision-making.

 The feedback from subordinates is particularly effective in evaluating the supervisor’s

interpersonal skills. However, it may not be as appropriate or valid for evaluating
task-oriented skills.

 Combining subordinate ratings, like peer ratings, can provide the advantage of creating a
composite appraisal from the averaged ratings of several subordinates.

 The need for anonymity is essential when using subordinate ratings as this will ensure
honest feedback.

 Supervisors may feel threatened and perceive that their authority has been undermined
when they must take into consideration that their subordinates will be formally evaluating
them.

 Subordinate feedback is most beneficial when used for developmental purposes. But
precautions should be taken to ensure that subordinates are appraising elements of which
they have knowledge.

 Only subordinates with a sufficient length of assignment under the manager should be
included in the pool of assessors. Subordinates currently involved in a disciplinary action
or a formal performance improvement period should be excluded from the rating group.
Organizations currently undergoing downsizing and/or reorganization should avoid this
source of PA.

Customer Contribution:
 Customer feedback should serve as an “anchor” for almost all other performance factors.

 Including a range of customers in Performance Appraisal program expands the focus of

performance feedback in a manner considered absolutely critical to reinventing the
organization.
 Cautions to be addressed:
 Generally the value of customer service feedback is appropriate for evaluating team output
(there are exceptions).
 Customers, by definition, are better at evaluating outputs as opposed to processes and
working relationships.
 It is a time-consuming process.
Uses of 360 degree performance:-360 degree performance used for
1) Developmental purposes only. The information is gathered by neutral entity – not the
supervisor – and shared only with the employee.

2) Evaluation. The supervisor is involved in designing, gathering information, and in

communication with the employee.

Companies using 360 degree performance appraisals

Advantages
Disadvantage
Despite the fact that 360 degree appraisals are being widely used throughout the world for
appraising the performance of the employees at all levels, many HR experts and professionals
argument against using the technique of 360 degree appraisals. The main arguments are:

 360 performance rating system is not a validated or corroborated technique for

Performance appraisal.

 With the increase in the number of raters from one to five (commonly), it become
difficult to separate, calculate and eliminate personal biasness and differences.

 It is often time consuming and difficult to analyze the information gathered.

 The results can be manipulated by the employees towards their desired ratings with the
help of the raters.

 The 360 degree appraisal mechanism can have a adversely effect the motivation and the
performance of the employees.

 360 degree feedback – as a process requires commitment of top management and the HR,
resources(time, financial resources etc), planned implementation and follow up.

 360 degree feedback can be adversely affected by the customers perception of the
organisation and their incomplete knowledge about the process and the clarity of the
process.

 Often, the process suffers because of the lack of knowledge on the part of the participants
or the raters.

Problems

 It is the most costly and time consuming type of appraisal.

  These programs tend to be somewhat shocking to managers at first. Amoco's Bill Clover
described this as the "SARAH reaction: Shock, Anger, Rejection, Acceptance, Help".

 The problems may arise with subordinate assessments where employees desire to “get the
boss” or may alternatively “scratch the back” of a manager for expected future favors.

 The organization implementing this type of performance appraisal must clearly define the
mission and the scope of the appraisal. Otherwise it might prove counter productive.

 One of the reason for which 360 degree appraisal system might fail is because the
organizations attempt to assimilate the 360-degree method within a traditional survey
research scheme. In traditional survey research, investigators attempt to maximize data
collection with as many items/questions as possible and with large sample sizes. In the
case of 360-degree appraisal, creating measurement instruments with many items will
substantially increase non-response errors.

 Organizations must consider other issues like safeguarding the process from unintentional
respondent rating errors.

 The culture shock that occurs with any system that creates “change.” And especially with a
modern system like 360 degree performance appraisal; must be taken care of.

360 Evaluation of Performance

The DecisionWise Leadership Intelligence 360 for Appraisal is a customized multi-rater
assessment process designed specifically for use in the evaluation of employee performance.
Based on over 15 years of performance management research, these assessments combine the
power of 360-degree feedback with traditional performance appraisal to provide a more
comprehensive picture of individual performance.

Our online 360-degree feedback system allows for fast and easy access to the survey and report. As
DecisionWise handles the survey design, setup, and administration, our clients quickly find the
process results in a higher degree of appraisal completion, greater confidentiality, targeted and
actionable feedback, and a worry-free administration process with no expensive software to
purchase, install, and support.

A DecisionWise project manager and consultant team will guide you and your organization
through the 360-degree assessment process. We can even help your supervisors understand how to
interpret, debrief, and coach their employees on the results, which creates in a greater level of
development and action.

360-Degree Feedback for Appraisal

Although once used almost strictly for development, 360-degree feedback has proven to be a
valuable option for performance appraisal. Using 360-degree feedback for appraisal (performance
evaluation) carries with it some significant advantages:

 It provides a more complete picture than a top-down, single rater appraisal (a performance
evaluation that includes only the manager's feedback).
 Supervisors often don't have a full picture of their employees' performance. Multiple
perspectives highlight all sides of performance.
 360 feedback for appraisal evaluates more than just operational performance (which tends
to be the focus of most managers' appraisal feedback).
 Appraisal 360 feedback takes into account the effectiveness of the employee when
working with various groups and levels (supervisor, peers, direct reports, internal
customers, etc.).
 Organizations find it less biased (and even more legally defensible) than the evaluation
provided by a single individual.
 Organizations familiar with 360-degree feedback find it a logical step in assessing
performance.
 360 evaluations tend to have more process and structure than the haphazard performance
appraisals typically done in most organizations. This greatly increases the likelihood that
the appraisal will be complete, and will give useful feedback.
Important consideration:- In order to obtain a successful 360-degree performance
appraisal process to make right decisions in the company, three main aspects should be considered:

 A 360 assessment for appraisal is different from a 360 for development. Off-the-shelf
surveys typically do not take this into consideration.
 A multi-rater appraisal addresses both what was done and how it was done.
 It is important that the purpose be clearly communicated.
 Communication prior to beginning the process should be very clear, providing guidance on
the how and why of the process.
 The evaluation framework should be flexible, such that the reviewers can provide their
judgments within different domains (numerical, interval-valued and linguistic), according
to the uncertainty and nature of criteria and the background of each reviewer, i.e., a
heterogeneous evaluation framework.
 The application of an adequate set of aggregation operators that take into account the
interaction among criteria and reviewers weights.
 The evaluation of the results should be close to human natural language in order to be
understandable and interpretable by multiple members of the company.

When used for evaluation, in particular, it's important that the entire process be considered- not
just the tool. Our DecisionWise teams are the experts in 360-degree feedback for both appraisal
and development.
Guidelines for introducing 360 degree appraisals
Here is a simple guide for introducing 360 degree appraisals into an organization (and any other
management system for that matter):

 Consider and decide what you need the 360 degree system to achieve. What must it be?
How must it work? What difference must it make?

 Choose/design a system (or system provider), ie., research and investigate your options
(other local or same-sector companies using 360 already are a helpful reference point, or
your trade association HR group, or a specialist HR advisory body such as CIPD in the UK
if you are a member).

 Check the legal and contractual issues for your situation - privacy, individual choice,
acceptable practices and rules, training, data protection, individual rights, adoption guide,
etc. (360 degree systems are now well-developed and established. Best practice and good
reference case-studies are more widely available than in the early years of 360 feedback
development.)

 When you've decided on a system, pilot it with a few people to make sure it does what you
expect. (It's best to establish some simple parameters or KPI's by which you can make this
assessment, rather than basing success on instinct or subjective views.)
 When satisfied with the system, launch it via a seminar or workshop, preferably including
role-plays and/or practical demonstration.
 Support the implementation with ongoing training, (include an overview in your induction
training as well), a written process guide/booklet, and also publish process and standards
on your intranet if you have one.
 Establish review and monitoring responsibility.
 Ensure any 360 degree appraisal system system is introduced and applied from top
down, not bottom up, so everyone can see that the CEO is happy to undertake what he/she
expects all the other staff to do. As with anything else, if the CEO and board agrees to
undertake it first, the system will have much stronger take-up and credibility. If the plan for
360 feedback introduction is likely to be seen as another instrument of executive
domination then re-think your plans.
Format of template:
A 360 degree appraisal template typically contains these column headings or fields, also shown in
the template example below:

 Key skill/capability type (eg communications, planning, reporting, creativity and problem
solving, etc - whatever the relevant key skills and capabilities are for the role in question)

 Skill component/element (eg 'active listening and understanding' [within a

'communications' key skill], or 'generates ideas/options' [within a 'creativity/problem
solving' key skill]). The number of elements per key skill varies - for some key skills there
could be just one element; for others there could be five or six, which I'd recommend be the
maximum. Break down the key skill if there are more than six elements - big lists and
groups are less easy to work with.

 question number (purely for reference and ease of analysis)

 specific feedback question (relating to skill component, eg does the person take care to
listen and understand properly when you/others are speaking to him/her? [for the active
listening skill])

 tick-box or grade box (ideally a,b,c,d or excellent, good, not good, poor, or rate out of 5 or
10 - N.B. clarification and definitions of ratings system to participants and respondents is
crucial, especially if analysing or comparing results within a group, when obviously
consistency of interpretation of scoring is important)
FORMAT DESIGN:
It can be a single format starting from Down Level as follows:

Level 1. – By Sub-ordinates

Level 2. - By Co-ordinating Departments/ Officials while executing a job

Level 3. - By Vendors/Customers (if applicable)

Level 4. - Self Appraisal

Level 5. – By HOD (will refer all levels upto 5)

Level 6. - By APPROVING AUTHORITY (will refer comments of all levels)

IMPORTANT INSTRUCTIONS:

1. If you design a one single format, arrange the comments in such a way i.e. starting from down
level to top-level.

2. Separate the forms of Customers/Vendors and Self Appraisal.

3. It is better to have separate Format at each level to avoid influences.

4. All comments are kept as confidential.

360-Degree Performance Evaluation Form
This form will assist management in preparing the performance evaluation for the individual listed
below. As someone who works with this person on a regular basis, your feedback regarding his or
her performance will be useful to the overall review process. You are not required to put your
name on this form.

Employee Name: ________________________________________________

Relation to Employee:________________________________________________

Your Name (Optional): ________________________________________________

A few A few
times a times a Every few NA
Time Spent Every Day week month months (Never)
Your interaction with
employee

Strongly Strongly Not

Quality of Work Agree Agree Disagree Disagree Applicable
Sets high standards for
quality of work output
Ensures work is error-free
before submitting
Helps others improve the
quality of their work

Strongly Strongly Not

Communication Agree Agree Disagree Disagree Applicable
Communicates well orally
and in written-form
Displays good listening
skills
Shares information freely
with others

Strongly Strongly Not

Teamwork Agree Agree Disagree Disagree Applicable
Contributes positively to
team
Helps define team roles to
maximize output
Can be counted on to
complete tasks correctly

Strongly Strongly Not

Personal Qualifications Agree Agree Disagree Disagree Applicable
and Leadership
Presents a positive image to
outsiders
Is friendly and easy to work
with
Adapts well to change
Has high professional and
ethical standards

Expectation:-
Manager expects from his Engineer the following:

1. Organisation Culture practices

2. Value Addition by control of Man, Material, Time, Training
3. Continuous Improvement on Work Methods, Data Control, Safety, etc.
4. Effectiveness of Communication on work execution, MIS system, etc.
5. Leadership Skills like Personality, Attendance & Punctuality, Team Work, etc.
6. Time Planning
7. Stress Control
8. Scope for Development
9. Learning Skills
10. Training Needs

Lateral Level Departments expect:

1) Co-ordination
2) Communication
3) Team Work
4) Sharing Knowledge
5) Flexible Approach
DOWN-LINE Personnel expect:

1. Personal Cleanliness & Personality

2. Attendance & Punctuality
3. Team Work
4. Communication
5. Training
6. Concern for their developments
7. Sharing Knowledge and Skill
8. Listening Skills

CUSTOMER OR VENDOR LEVEL EXPECT: (Wherever applicable)

1. Corporate Culture
2. Effective Communication thro information and product knowledge
3. Flexible Approach
4. Follow-up Attitude
5. Listening Skills

SELF LEVEL EXPECT:

1. Knowledge
2. Job Satisfaction
3. Training Needs
4. Problems that were prevented him to perform
5. Positive Points that contributed in his Job Performance
6. Suggestions for Improvement
7. Suggestions for Welfare
8. Intra and Inter-personal relationships (All three levels viz. upward, horizontal & down
level)
9. Needs if any of infra-structure facilities
10. Suggestions for Organisation Growth overall
360 degree feedback stages:-
360° Feedback involves four stages of adoption:

Awareness: This comes from reading articles, attending presentations, talking to others etc.

Experimentation: In this stage individuals try it out in a limited way, either on themselves or
on a small population. The instruments used for this are either developed internally or generic
tools available from suppliers on the open market. The aim is to try out the technique to learn
more about it, and to see if it has relevance to the organisation.

Pilot: This is usually the prelude to larger scale implementation, and is intended to test out or
“de-bug” a new questionnaire and system.

Rollout: This is where the now proven system is spread to the whole of the population it was
intended for.
360-Degree Performance Appraisal Mode
Our aim in this paper is to present a novel integrated model for 360-degree performance appraisal
based on a decision analysis scheme with a flexible framework in which reviewers can express
their judgments in different domains, providing linguistic results, considering the interaction of the
criteria and reviewers weights.

To do so, the 360-degree performance appraisal model consists of the phases shown
in Figure 4 that cover the essential phases of decision analysis.

The following subsections present in further detail these phases

CONCLUSIONS
The growing interest by all types of organisation in experimenting with, and then using 360°
appraisal in a variety of applications leads me to believe that it will become a significant tool
which line managers and Human Resource specialists use to measure performance. This interest
also carries with it a worry, namely that after a peak it will go the way of other new techniques.
It is possible to see already the seeds of failure as well as success.

Here are the key issues which will cause 360° to get a bad name:

1. Insufficient attention to any aspect of the feedback loop - particularly not giving participants
sufficient support in reflection and action planning, or rewarding them for changed behaviour.

2. Lack of thought and preparedness when implementing 360° projects, particularly

underestimating the need for good communication, logistics planning, and facilitation

3. Lack of clarity on the real reasons for carrying out the project, with a consequent inability to
measure its true results.