a1 TDC The Powerful New Model for Employee Assessment & Performance Improvement Mark R. Edwards and Ann J, Ewen360° Feedback The Powerful New Model for Employee Assessment & Performance Improvement Mark R. Edwards and Ann J. Ewen American Management Association New York + Atlanta + Boston + Chicago + Kansas City + San Francisco * Washington, D.C Brussels + Mexico Cily « Tokyo TorontoThis book is available at a special discount when ordered in bulk quantities. For information, contact Special Sales Department, AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Edwards, Mark R. (Mark Robert), 1949- 360° feedback : the powerful new model for employee assessment & performance Improvement / Mark R. Edwards and Ann J. Ewen cm. Includes bibliographical references and index. ISBN 0-8144-0326-3 1, Employees—Rating of. 2, Performance—Evaluation. L Ewen, Ann J. HF5549.5.R3E33 1996 668.3'125—de20 96-6098 cIP © 1996 Mark R. Edwards and Ann J. Ewen. All rights reserved. Printed in the United States of America, This publication may not be reproduced, stored in a retrieval system, or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of AMACOM, a division of American Management Association, 1601 Broadway, New York, NY 10019. Printing number 10Contents Acknowledgments Part I The New Assessment Model 1 The Power of 360° Feedback 2 360° Feedback Evolution and Variations 3. Applications for 360° Feedback Part II Implementing 360° Feedback 4 Designing a 360° Feedback Project 5 Implementing 360° Feedback 6 Evaluating the 360° Feedback Process Part III_ User Concerns and Needs 7 Common Pitfalls and How to Avoid Them 8 Addressing Criticisms of 360° Feedback 9 The Promise of 360° Feedback 10 The Future of 360° Feedback Appendix: Sample Competency Assessments for 360° Feedback Recommended Reading Index 101 126 145 147 163 181 201 215 229 235Acknowledgments The authors would like to thank the many innovators who in the 1970s and 1980s were willing to test 360° feedback systems before they became popular. Special thanks go to Adrienne Hickey, Theresa Plunkett, and Richard Gatjens at AMACOM; development editor, Jacqueline Laks Gorman; our editorial assistant, Jeni Servo; and our production team, Karen Bruggeman and Mari Phipps. viiThe New Assessment ModelThe Power of 360° Feedback Any company that’s going to make it in the 1990s and beyond has got to find a way to engage the mind of every single employee. If you're not thinking all the time about making every person more valuable, you don’t have a chance. What's the alternative? Wasted minds? Uninvolved people? A labor force that’s angry or bored? That doesn’t make sense. —John F. Welch, Jr., CEO, GE No one would have doubted his ability to reign had he never been emperor. —Tacitus, Roman historian THE EMPEROR’S NEW CLOTHES: AN UPDATED LEADERSHIP TALE Once upon a time, the Emperor asked members of his court how he looked in his new clothes. Knowing the answer he wanted, his court- iers told him “superb,” in spite of the fact that he had on not a stitch of clothing. The Emperor had just read about how people often tell others to their face what they want to hear rather than what they need to hear. The Emperor was anxious because he had scheduled a large parade, and would be wearing his new clothes in it. At the last moment, he asked those in his circle of influence—those he most trusted—to pro- vide him anonymous feedback about the look of his new suit. The 34 The New Assessment Model anonymous feedback was unanimous: He was wearing only his birth- day suit. The Emperor used what is today called 360° feedback to over- come false information. Imagine how many kings, queens, presi- dents, generals, leaders, and individuals have been influenced by information gathered in a manner that reinforced their false as- sumptions rather than told the truth. The honest input from others can overcome false self-perceptions, blind spots, and just plain ig- norance. Candid feedback from relevant others may save careers when people can avoid making stupid mistakes (like parading na- ked in public). A New Model for Performance Feedback and Appraisal Like the Emperor, leaders and employees at all levels of organiza- tions are changing the way they receive feedback in order to im- prove the quality of information. The new model for performance feedback and appraisal turns the assessment process upside down. People are asking for performance feedback from those in their own circle of influence, that is, those with knowledge of their work behaviors, as well as from their supervisor. This information that comes from many asking for and getting information from people rather than just is more honest, reliable, and valid than traditional appraisals from the supervisor only. Moreover, feedback from these multiple sources has a more powerful impact on people than information from a single source, such as a supervisor. In fact, no organizational action has more power for motivating employee behavior change than feedback from credible work associates. The 360° feedback® process, also called multisource assess- ment, taps the collective wisdom of those who work most closely with the employee: supervisor, colleagues (peers), direct reports (subordinates), and possibly internal and often external custom- ers.* The collective intelligence these people provide on critical *360° feedback® is a registered trademark of TEAMS, Inc.The Power of 360° Feedback 5 competencies or specific behaviors and skills gives the employee a clear understanding of personal strengths and areas ripe for devel- opment. Employees also view this performance information from multiple perspectives as fair, accurate, credible, and motivating. Employees are often more strongly motivated to change their work behaviors to attain the esteem of their coworkers than to win the respect of their supervisor alone. As the 360° Feedback Process better serves the needs of em- ployees, it serves the changing needs of their organizations too. Organizations are reducing hierarchy by removing layers of management and putting more emphasis on empowerment, teamwork, continuous learning, individual development, and self- responsibility. The 360° Feedback Model aligns with these organi- zational goals to create opportunities for personal and career de- velopment and for aligning individual performance expectations with corporate values. Well-designed 360° feedback systems serve the many needs of employees substantially better than the traditional hierarchical, single-source assessments employees are so familiar with, such as management by objectives or results-only measures. Change agents, line and staff managers, team members, and employees in all disciplines are designing and implementing multisource assess- ment systems that work for people in nearly all kinds of jobs: nurses, lawyers, production workers, union members, hospitality personnel, engineers, military units, school teachers, librarians, re- search and development managers, and public safety officers, among many others. Any employee who needs better performance information may ask for and even implement a 360° feedback Process. Single-source assessments reinforce employee accountability and service to that single source, typically the boss. In contrast, multisource assessment creates accountability and service to all stakeholders: supervisor, external customers, and internal custom- ers, including coworkers and direct reports. This book offers a framework for understanding, designing, implementing, and evaluating the 360° Feedback Process. It also shows how organizations can build effective systems that support people and encourage their continued improvement.