6. 360° FEEDBACK – Hurconomics for Talent Management: The Creation of a Business-driven HRD Missionary

6

360° Feedback

The Cost of a Smile

Mr X, a senior VP (SVP) in an Asian multinational, is a chartered accountant. He became SVP in that company at the age of 37. He has received six promotions in the last ten years and the average promotion rate in that company has always been more than three years. He is considered very sincere, meticulous, honest, hardworking, loyal, attentive to detail and highly analytical. He has saved a lot of money for the company, manages its collections well and is a prudent administrator.

However, no one liked to work with him. There are 30 executives and managers in his department, mostly postgraduates in commerce and some chartered accountants. Employees often complained that the SVP worked very hard, came in an hour or more early and expected everyone in the department to do the same, as well as to work late regularly. No mistakes ever escaped his attention, and upon detection he lost his temper and yelled at employees. Employees admitted that they did learn a lot while working with him, but had to pay a heavy price in terms of their peace of mind and psychological energy. No one dared to give him feedback as he was thought of highly by the top management and had been promoted rapidly over the years. His output and loyalty had always been unquestionably high. The average tenure of his junior staff was about six months and every year at least 50 per cent of the people who reported to him requested transfers or left the department. Most of the time, these departures were explained away as resulting from a high demand for chartered accountants and commerce graduates from outside the department. Only a few people internally knew the truth of the matter.

When the HR chief suggested to the SVP that a 360° feedback should be conducted, his response was:

You see how hard I work and how much I give to this company. And look at the employees you post in my department and their commitment to work. They can’t even stand hard work for a few days. Tell me who needs 360° feedback: them or me?

The HR chief convinced the SVP, nonetheless, and the latter attended a 360° feedback workshop. Through the 360° feedback process, he understood his strengths and weaknesses for the first time. While he was happy to see that his strengths were noticed and acknowledged by everyone, the discovery that his interpersonal competence was rated as extremely poor, and that teamwork within the department was bad and his juniors’ morale low, shook him. First, he found it very difficult to reconcile his department’s high regard for his abilities and the results he helped bring about, with the assertion that he was very poor at team work and at maintaining interpersonal relations. The question he asked during the workshop was: ‘How is it that I am delivering results year after year and getting promoted faster than anyone else, if my team work is poor and interpersonal competence low?’

Within a few days of the 360° feedback workshop, the SVP initiated a number of changes. Everyone noticed the change in him and he no longer behaved as formally as before. He stopped insisting that people come early or leave late, as long as they completed their work on time. Gradually, he also cultivated the practice of holding informal departmental meetings. In three months, the SVP had changed visibly. According to some of the juniors, ‘He smiles now, which he rarely ever did before, and we are no longer afraid to approach him.’ A couple of years later he was adjudged one of the best presidents of the company.

What is the cost of his smile? What are the benefits of smiling?

If 360° feedback can help you to become more aware of your strengths and weaknesses, what is the ROI?

Some answers

A 360° feedback conducted with a proper tool costs about 5,000. Combined with a feedback workshop of two days (normally, 360° workshops are two to three days long and focus on leadership development), the exercise costs another 30,000 to 1 lakh for the top management, depending upon the institution that offers the workshop. Positing the cost of the SVP’s 360° feedback at 50,000, including the CTC for the two days of his attendance, travel costs, profiling costs and faculty fee, getting him to smile cost the company 50,000. The cost of his new-found humaneness is only 50,000.

The benefits  Now, let us estimate the benefits of his smile. The following is the list of benefits:

  1. Retention has gone up. Ever since the SVP changed his behaviour, employees have begun to feel more comfortable working with him. Earlier, employees in the department could be retained for only six months or so. Now the average period of retention has risen to two years. Every employee who left cost the company three months of adjustment time (for the new employee) and also transfer and other HR costs of at least 10 days per employee. These 60 days (20 days a month × 3 months) and an additional 10 days of loss of productivity) meant 2.1 lakh per person seeking change. If in a department of 30 people, 50 per cent change jobs every now and then, and even if five of the changes are attributable to the behaviour of the SVP, the annual savings due to his changed behaviour are 5 × 2.1 lakh = 10.5 lakh.
  2. Productivity has risen as there is now less tension. Employee morale has been boosted too. These are difficult to cost. Assuming a gain of half an hour per person per day due to the SVP’s friendly and supportive attitude (studies have shown that productivity is higher when the day begins on a positive rather than a negative note) and assuming that on an average about six people interact with the SVP, there is a gain of three hours of productive time per day. Annually this works out to about 750 hours.
  3. Satisfied employees tend to satisfy their customers too. The improved morale and enthusiasm of the commercial department has had some positive effects on internal and external customers. Assuming that every employee reduces half an hour of transaction costs for internal customers per day and 20 internal customers and vendors are served by the employees with a smile, there is a 10-hour saving per day, and the resultant goodwill.

Thus, with a 50,000 smile, you can win 10 lakh in return annually. These returns only keep multiplying.

Consider the benefits to a company if its CEO (whose strategic thinking is appreciated by the employees but whose communication skills are an issue) works hard to improve her/his communication skills and spreads the benefits of her/his strategic thinking to the rest of the company. Can we put a figure to the consequent development of five of her/his general managers as powerful strategic thinkers?

Similarly, another top-level manager of a company finds that contrary to her/his perception of herself/himself as a great delegator, her/his juniors do not think that she/he delegates adequately. On discovering this through 360° feedback, she/he begins to delegate more; as a result, a year later there is a saving of at least two hours of her/his time per day. This saved time can be utilized to help set up a new plant.

The need  You are a manager and you are doing a good job of your assignments. Year after year, you are receiving your promotions on time, and are being appreciated for your work. Your organization, like many others, is recruiting newcomers, changing its systems and beginning to use new technology. Sometimes you feel that the younger generation is smarter, more hard-working and career-minded, and has little loyalty to the organization. You also feel that with a little support—which you are not getting—you can do a lot more work. You think you are a leader in your own way but you don’t know what others think of you. You share good relations with others and mind your job. But is that all you should be doing? How can you help take your organization into the future? Do people think that you have the ability to lead them? You know what your strengths are but you are not sure if your seniors, juniors and colleagues see your strengths the same way as you do. You are wondering how to find out. A 360° feedback exercise gives you the answers.

360° Feedback or Multi-Rater Assessment and Feedback System (MAFS)

In recent years, 360° appraisals have become very popular because it has long been felt that one person’s assessment of another cannot be free of bias. In addition, with the focus on customers (both internal and external) and an emphasis on the softer dimensions of performance (leadership, innovation, team work, initiative, emotional intelligence, entrepreneurship, and so on) it has become necessary to get multiple assessments for more objectivity. A 360° appraisal is a multirater appraisal and feedback system. Almost every Fortune 500 company uses it in some form or the other. According to this system, the candidate is assessed periodically (once a year and sometimes even half-yearly) by a number of assessors, including her/his boss, immediate subordinates, colleagues, and internal and external customers. The assessment is based on a questionnaire specially designed to measure behaviours considered critical for performance. The appraisal is done anonymously by others and the assessment is collected by an external agent (for example, a consultant) or a specially designated internal agent (for example, the HRD department). The assessment is then consolidated, and feedback profiles are prepared and given to the participant after a workshop or directly by her/his boss or the HRD department at a performance review discussion session. Due to the innumerable variations possible in 360° feedback and appraisals, and its potency as a competency identification and development tool, it is important to understand the process and its dynamics.

Objectives of MAFS

The following are the objectives of MAFS:

  • Providing insights into the strong and weak areas of the candidate in terms of the effective performance of roles, activities, styles, traits, qualities, competencies (knowledge, attitudes and skills) and impact on others
  • Identification of developmental needs and preparing development plans more objectively in relation to current or future roles, and performance improvements for an individual or a group of individuals
  • Generating data to serve as a more objective basis for rewards and other personnel decisions
  • Reinforcing other change management efforts and interventions directed at organizational effectiveness (for example, TQM efforts, customer-focused interventions, flat structures, quality-enhancing and cost-reducing interventions, decision process changes)
  • Creating a basis for performance-linked pay or performance rewards.
  • Aligning individual and group goals with organizational vision, values and goals
  • Culture-building
  • Leadership development
  • Potential appraisal and development
  • Career planning and development
  • Succession planning and development
  • Team-building
  • Planning measures to improve internal customer satisfaction
  • Increasing role clarity and accountability

Advantages of MAFS

The MAFS or 360° appraisal system has certain advantages. These advantages are additional to those of traditional appraisals. Normally, MAFS should be viewed as a supplement to the regular KPA- or KRA-based appraisal systems rather than as a replacement for them.

The additional advantages offered by MAFS are as follows:

  • It is more objective than the assessment of traits and qualities by one person.
  • It supplements the traditional appraisal system.
  • It usually provides feedback that employees find more acceptable.
  • It can serve all the purposes of the traditional appraisal system, such as identifying developmental needs, reward management and performance development.
  • It helps focus on internal customer satisfaction.
  • It can point to the supervisory biases in the traditional appraisal systems.
  • It is a good tool for enhancing customer service, and the quality of inputs and service to internal customers.
  • It provides scope for candidates to receive multiple inputs to improve their role, performance, styles and ideas, and enhances their overall acceptability.
  • It is more participative and enhances the quality of HR decisions.
  • It is suitable for the new organizational cultures being promoted by most world-class organizations—participative culture, learning culture, quality culture, competency-based performance culture, team culture, empowering culture and leadership culture.

Prerequisites for participation in 360° feedback

A 360° feedback system can become a very sensitive issue. It can catch someone not prepared for it completely off-guard. It can also create certain new issues within the organization. If not designed and conducted well, it runs the potential risk of making the candidate develop wrong perceptions or notions about one or more of her/his assessors, and possibly developing negative attitudes towards them. It is therefore necessary and important to manage the process well and make it foolproof. The first important step is to determine if the organization is ready for it. The second important step is to determine if the candidate is ready for it. The following are the indicators of an organization’s readiness for MAFS:

  • The top management of the organization is committed to developing the competencies of employees on a continuous basis.
  • There are a number of HRD systems operating in the organization and their implementation is being taken seriously.
  • The top management is serious about creating opportunities for employees to learn from each other and also to learn from their mistakes.
  • The top management is willing to invest its time and effort in giving feedback to its subordinates.
  • The top management and senior managers take the current appraisal system seriously and do all that they are required to do to ensure its effective implementation.
  • The top management and senior managers conduct their performance review and counselling sessions regularly.
  • The top management is sufficiently committed to building competencies through multi-rater feedback.
  • The top management is willing to subject itself to an assessment by its subordinates and colleagues.
  • There are not too many status barriers and ego problems in the organization
  • People take feedback supportively and use it for development.
  • People are not likely to use the feedback to play politics.
  • A high degree of systems orientation is being attempted by the organization.
  • The organization already is, or is in the process of becoming, a customer-driven organization.
  • A high degree of teamwork is emphasized in the organization.
  • The HRD department has a high level of credibility.
  • Top management interventions are not regarded with suspicion by the employees.
  • Managers are interested in learning about themselves.
  • There is a high degree of process orientation in the organization.
  • The organization is a value-driven one.
  • The softer issues of management like managing people, professionalism and development are emphasized in the organization.
  • Managers take their jobs seriously and learn.
  • There is a high degree of emphasis on competency-building.
  • The organization has a history of taking all change management tools seriously and implementing them till the end.
  • People in the organization take feedback seriously and try to benefit from it.

The following are the indicators of a candidate’s readiness for MAFS:

  • The candidate is desirous of knowing herself/himself through the eyes of others. She/he is willing to receive feedback from others and does not become over-defensive.
  • The candidate wants to be better.
  • The candidate is open to, and respects, the views of others.
  • The candidate should be a learning-oriented individual.
  • The candidate has an attitude of healthy competitiveness.
  • The candidate has at least one-and-a-half years of experience (except in the case of management trainees).
  • The candidate has direct working relations with at least six individuals who can rate her/him.
  • The candidate has no history of psychological or psychiatric problems.

The RSDQ Model of 360° Feedback

TV Rao Learning Systems (TVRLS) has developed a model for top and senior management in India in terms of the required managerial and leadership competencies. It is called the roles, styles, delegation and qualities (RSDQ) model. This model views effective management and leadership as a combination of four sets of variables. These are:

  1. Roles: The extent to which the individual plays various leadership and managerial roles and activities. There are a number of roles that have to be played by every manager. These are both transformative roles (leadership) and transactional roles (managerial). Some of these are:
    • Articulating and communicating vision and values
    • Formulating long-term policies and strategies
    • Introducing and managing new technology and systems
    • Inspiring, developing and motivating juniors
    • Managing juniors, colleagues and seniors
    • Culture-building
    • Internal customer management
    • External customer management
    • Managing unions and associations
  2. Style: While effective managers recognize all the leadership roles and perform them well, it is not only roles or activities that determine their effectiveness, but also the way in which they are performed. The model envisages that managers may perform most roles well, and devote time and effort to them, but could be insensitive to the style in which these activities should be carried out. The leadership styles have been classified as follows, on the basis of earlier research that I had undertaken at IIMA:
    • A benevolent or paternalistic leadership style in which top-level managers believe that all their employees should be constantly guided and treated with affection, just as parents treats their children. This style is relationship-oriented: the leader assigns tasks on the basis of her/his own likes and dislikes, constantly guides and protects employees, understands their needs, salvages crisis situations by actively involving herself/himself, distributes rewards to those who are loyal and obedient, shares information with those who are close to her/him, and so on.
    • A critical leadership style is characterized as coming close to the theory X belief pattern where managers believe that employees should be closely and constantly supervised and directed, and reminded of their duties and responsibilities; the leader is oriented towards short-term goals, cannot tolerate mistakes in or conflicts among employees, is dominated by a desire for personal power, keeps all information to herself/himself, works strictly according to norms and rules and regulations and is highly discipline-oriented.
    • A developmental leadership style is characterized as an empowering style, where top managers believe in developing the competencies of their staff, treat them as mature adults and leave them on their own most of the time; the leader is oriented towards long-term goals, shares information with all to build their competencies, facilitates conflict resolution and the rectification of mistakes by the employees themselves with minimal involvement by her/him.

    It has been found that the developmental style is the most desired organization-building style. However, some individuals and situations require benevolent and critical styles. Research also shows that some managers are not aware of the predominant style they tend to use, and the effects it has on their employees.

  3. Delegation: The RSDQ model considers the level of delegation to be an important part of a senior executive’s effectiveness. This dimension has been included because most senior managers seem to have difficulties delegating, especially those effective managers who are promoted rapidly in their career. In view of these experiences, delegation has been isolated as an important variable of leadership. Those who delegate, release their time to perform higher-level tasks and those who don’t continue to perform lower-level tasks, and suppress their leadership qualities and managerial effectiveness.
  4. Qualities: The model envisages that managers should exhibit the qualities of leaders and world-class managers (for example, proaction, listening, communication, a positive approach, participative nature and quality orientation). These qualities not only affect the effectiveness with which top-level managers perform various roles but also have an impact on the leadership style and, hence, are critical.

The TVRLS instrument for 360° feedback for managerial and leadership development is based on the RSDQ model. In case of managerial qualities, there are about 75 activities identified under each of the roles just mentioned. An instrument (two versions—one consisting of 55 items for senior managers and another consisting of 75 items for top-level managers) has been developed to assess these measures and the extent to which the manager is perceived as performing these roles. In the case of leadership styles, a 51-item instrument assesses the extent to which the aforementioned styles are exhibited across 12 different situations or activities, and the impact the manager makes on her/his subordinates in terms of five variables: that is, feelings (dependence, incompetence, independence, interdependence, resentment, and so on), job satisfaction, work commitment, morale and extent of learning by the subordinates. Through this instrument, the participant comes to understand whether her/his style is benevolent, critical or developmental (dominant and back-up styles) and comprehends their impact.

The delegation questionnaire assesses the extent to which the participant is delegating, and releasing her/his own time for higher-level roles and tasks. The 10-item questionnaire measures the various symptoms of delegation or non-delegation. In case of behavioral qualities, 25 qualities are included at present using a semantic differential technique. Three open-ended questions at the end try to discover the most dominant strengths and weaknesses of the respondent, along with suggestions for improvement.

The instruments developed on the basis of the RSDQ model are updated periodically, according to the dimensions important to the top management roles/positions with changes in the business environment.

Applications and variations of the RSDQ model

The 360° feedback instrument based on the RSDQ model is being used by a large number of Indian organizations, including the Aditya Birla Group, IL&FS, Gati Corporation, Mafatlal Group, Dr Reddy’s Laboratories, Wockhardt, Taj Group of Hotels, Tata Cummins, Titan Industries, Gati Cargo Management Services, Interra IT, Novell Software, Amway India, Bajaj Auto and State Bank of India. It is also being used in countries like Nigeria and Egypt by the Kewalram Chanrai Group and Alexandria Carbon Black. The main purpose of using the RSDQ model in these organizations has been to provide insights to top-level managers about others’ perceptions, and thempact they make in the organization due to the effectiveness with which they perform various managerial roles and practice certain leadership styles. The data generated gives them a basis to formulate relevant action plans.

Trends observed in managers using the RSDQ model

Through various 360° feedback programmes for managerial roles and leadership styles for organizational effectiveness, TVRLS has gathered data from 4,000 top managers from over 150 different organizations. From the analysis of the feedback from over 40,000 assessors for these managers, certain observations about the leadership and managerial styles of top managers can be made.

In terms of managerial roles, managers score high on the following items:

  • Liaison with boss and top management, which includes:
    • Communicating effectively with the boss; maintaining good interpersonal relations and interactions
    • Understanding the expectations of the boss and the top management, and trying to meet them
    • Influencing the thinking of the boss and getting her/his support and resources
    • Taking guidance and learning from the experiences of the boss and other seniors
    • Liaising with other functionaries and the top management, and keeping them informed of various developments to get support for the region
  • Setting short-term tasks and targets for the unit in various areas of operation
  • Development of good working relationships with colleagues by interacting with them, showing respect, using tact and being frank
  • Understanding the top management’s vision for the organization and communicating it to the staff

The activities in which managers have a comparatively low rating are:

  • Keeping in touch with technological developments in the related industry and/or function
  • Building technological competencies of staff through training
  • Introducing new management systems to manage various activities and operations effectively
  • Instituting organizational processes and mechanisms to build the desired culture
  • Introducing new technologies for facilitating good products and services, and work efficiency
  • Monitoring the development of the desired organizational culture
  • Articulating the culture that should characterize the unit
  • Setting long-term goals and objectives for the unit
  • Investing time and effort in the growth and development of juniors and other staff
  • Handling staff grievances
  • Consistency and objectivity in staff decisions
  • Managing different viewpoints among staff members to build a collaborative culture
  • Seeking suggestions from customers in order to improve services provided by the unit, and taking the suggestions seriously

In terms of leadership styles, the following are the observations:

  • Indian top management mostly seen to have a predominantly developmental style of leadership (12 per cent) along with a strong benevolent style (5 per cent).
  • Twenty-eight per cent of managers perceived to be more critical than the desired level; high criticality in leadership style reflected through the following items:
    • High concern with immediate tasks and organizational goals, no concern for individual needs and goals
    • Thinking only in terms of immediate tasks and short-term goals
    • Preferring employees/subordinates who conform strictly to rules, regulations, procedures and norms
  • Twenty-nine per cent of managers perceived as having a positive impact due to a leadership style fostering interdependence and empowerment among subordinates; due to a strong benevolent style, 4 per cent of managers perceived as creating dependence among employees.
  • Twenty per cent perceived to have a negative impact because of resentment and counter-dependence (avoiding dependence on others by fighting authority figures or by defying others or opposing others) among employees.

As already explained, the RSDQ model recognizes the extent of delegation as an important attribute of top managers. Of all the managers whose data was analysed, only 44 per cent were perceived to delegate adequately. Low delegation was mainly due to:

  • High level of involvement in matters being handled by subordinates
  • Expecting subordinates to check back every time a problem arose in an ongoing project or assignment

In terms of critical managerial and behavioural qualities, the strong points of managers were that they were:

  • Active
  • Organized
  • Social
  • Encouraging
  • Clear and persuasive in presenting ideas
  • Positive in their approach
  • Ready to involve people

Certain behavioural qualities were found to need improvement. Some managers needed to be:

  • More calm and composed
  • Less formal
  • More receptive
  • Less status conscious
  • More innovative
  • Less authoritarian
  • More proactive

This analysis is part of the ongoing research at TVRLS on the RSDQ model and the data generated by using it. The research projects undertaken are:

 

(a) correlation studies of 360° feedback data and (b) studies of the effectiveness of 360° feedback by surveying those who had received feedback after a year to assess the changes in their roles and styles.

Effectiveness of 360° feedback

TVRLS conducted a study of the effectiveness of 360° workshops in the late 1990s (Rao and Rao 2003). The line of inquiry was based on the information gathered regarding the impact of the workshop on people, changes observed as a result of the workshop, actions adopted towards change, further support, if any, required, and so on. The study covered 32 managers who had participated in the workshop. They were assessed through personal interviews and one-to-one discussions. TVRLS reported the following:

  • Two months after the workshop, participants were still carrying the report and workbook with them for ready reference and reinforcement.
  • Of the 32 managers interviewed, 24 of them had shared the data and report, including the action plans, with respective bosses, peers and subordinates in an effort to solicit their support towards change.
  • The CEO of a multinational company, after attending the workshop, emailed the results of his profile and feedback to all employees. Additionally, he also made known his present focus area (based on scores in the report) and action plans for the future, inviting support as well as suggestions.
  • A good number of the 32 managers had initiated the practice of maintaining diaries to record their action plans and activities during the day or week, in order to meet their plans.
  • Of the 32 managers interviewed after the 360° feedback workshop, only two felt that the workshop had not caused any change in their action or behaviour. Incidentally, both these individuals quit the organization soon afterwards.
  • Of the 32 managers, seven actually took the report home and shared the findings/data with their family members, asking for their suggestions about how they might change. Not surprisingly, all seven of these participants felt they had achieved a high level of change, observable not just to colleagues at work, but to their families as well.

Of the 32 managers interviewed, only one individual had a negative experience despite his efforts to change his style. This individual’s open-ended feedback laid emphasis on his follow-up actions. His subordinates felt that they would be able to function better if he stopped breathing down their necks after assigning tasks to them. After the workshop, this person made efforts to reduce his follow-up activities. Unfortunately, his subordinates began to taking advantage of this and it resulted in them becoming more irregular in their work.

In another study at TVRLS using a mailed questionnaire, responses were sought on the following issues:

  • Insights gained into roles, styles, delegation and behavioural patterns; whether she/he discovered any dysfunctional aspects of the same
  • Changes brought about in roles, leadership styles, extent of delegation, behavioural patterns
  • Roles or activities specially focused on after attending the programme
  • Results that seem to benefit the participant and the organization, and feedback if some things had not worked well
  • Impact of the 360° programme on the self, unit and overall organization
  • Suggestions to make such programmes more useful and effective

In addition, the participants were given a separate questionnaire to be distributed to their ’significant others’ to gain their perception on changes observed. Feedback was sought on:

  • Predominant changes observed
  • Changes observed in managerial roles, leadership styles, delegation pattern, behavioural qualities
  • Negative changes/no changes observed
  • Suggestions for further improvement

The following were the most frequently mentioned changes in behaviour after the 360° feedback:

  • More focus on leadership roles:
    • Articulating vision
    • Spending more time communicating the vision and setting goals
    • Being more developmental rather than benevolent or critical
    • Attending to the individual needs of others rather than being preoccupied with one’s own
  • Internal customer orientation:
    • Better interaction with colleagues and subordinates
    • Learning from colleagues and benefiting from their experiences
    • Rapport with seniors
  • Increased focus on fostering team spirit:
    • Setting high goals for the team
    • Participative management
    • Conflict management
    • Developing mutuality
    • Sensitivity to others’ feelings
    • Collaborative culture
    • Cross-functional review mechanism
  • Marked increase in delegation and subordinates’ development:
    • Empowering subordinates to take on higher responsibilities
    • Leaving routine decisions to lower levels
    • Not interfering in matters being handled by subordinates
    • Encouraging subordinates to learn from their mistakes and being patient with them
  • Other behavioural changes were the following:
    • Assertiveness
    • Clear communication
    • Showing initiative
    • Being patient
    • Being proactive
    • Efficient time management

In terms of the impact on their unit/department/organization, the respondents felt that not only had they benefited from the feedback, the changes in them had increased motivation among their subordinates too. Also, increased sensitivity to their managerial and leadership roles had resulted in better working relationships and a more congenial work atmosphere. Most participants said that the changes were effected not just because the feedback came from people who knew them best at their workplace, but also because they were made aware of the differences between their self-perceptions and reality.

TVRLS experiences (feedback both during and after workshops) in the area of 360° feedback indicate the following (Rao and Rao 2003):

  • Feedback from multiple sources bears more credibility as individual biases are minimized and a more complete picture is obtained.
  • 360° feedback is a very efficient tool, chiefly because it emphasizes difference in self-perception and reality
  • The feedback definitely has marked positive effects such as:
    • Heightened leadership competencies
    • Increased customer orientation
    • Greater sensitivity
    • Increased team orientation.
  • 360° feedback does have its share of negative consequences. The primary reason is that people providing the feedback seem to feel that once the individual is made aware of her/his weaknesses, there will be dramatic improvements almost immediately. Automatically, others’ expectations rise with respect to the individual’s behaviour and the increased sensitivity of the participant may also be exploited.
  • Action plans are most effective when shared with the other members of the organization, principally because the changes desired in the individual undergoing 360° feedback require considerable organizational support. It would be useful for the organization to know how it can support the individual in terms of her/his action plans to improve

Rao and Rao (2003) have made some useful observations regarding how organizations planning to use 360° feedback could go about their intervention. Some useful lessons that can be drawn are:

  • 360° feedback should be projected as a developmental tool before using it for appraisal. The most important aid in making it successful is to provide organizational support for planning and managing it as a change programme. Initially it should be used for the top management and then gradually at all managerial levels.
  • The system should be communicated across the organization. The objectives should be well defined. The HRD department can perform a significant role in the definition of objectives. Unless all apprehensions are cleared, such a programme cannot be implemented successfully.
  • Effectiveness can be maximized by continual organizational monitoring. Quarterly review programmes of post-workshop improvements are a good idea. Moreover, those who have participated in the feedback programme could meet formally to discuss action plans, experiences, and so on.
  • Organizational support should be provided to aid individual development. This could be done by appointing senior participants as mentors to continuously counsel and encourage others. A good way of integrating the system would be to add the change plan as a key result area in their performance appraisal. Action plans would be reviewed like any other tasks and targets along with regular performance appraisal. This is a good practice to follow.
  • Convert it into 360° appraisal. This is the most logical step to follow, and is particularly applicable to those organizations that are looking for a 360° appraisal system. They may hesitate to start an appraisal programme and may use the feedback only as a starting point. In such cases, after the participants have received feedback once, their inhibitions and apprehensions may lessen. They become well prepared to receive feedback from others. In fact, some of the participants may then actively want feedback. Therefore, a logical extension of the programme is to design a 360° appraisal programme and make it a part of the appraisal process annually. The team undergoing the programme with the help of the in-house HR team or a 360° expert could design a simple format.
  • Conduct periodic re-assessments. Some of the participants undertake re-surveys using the same questionnaires after six to twelve months. The RSDQ questionnaire is long and may present problems for a continuous organization-wide re-assessment. In order to examine the changes in themselves, the candidates being re-assessed could use a shorter version of it.
  • Reward change with the help of a reviewing officer. Another way of reinforcing the process of change is to acknowledge and reward changes. This could be done systematically by instituting change awards or integrating into the reward or recognition system some incentives for effecting changes due to 360° feedback. Spread success stories, and document and reward successes.
  • Collect the trends in relation to commonly shared weaknesses and initiate training and other organizational actions. When a candidate undergoes a 360° feedback programme using the RSDQ model, data about her/him is generated on nearly 165 dimensions. Benchmarking data is also generated, and this shows company-wide trends. Common observations from such extensive data can be traced to certain organizational factors. This can help the organization to develop an agenda for its training and other development activities.
  • Use data for potential appraisal, career planning and development. This is a procedure commonly used by Fortune 500 companies. In such cases it should be announced at the outset that the data would be made available to the organization. The data could be used for placement and promotion decisions, and also for the purposes of career counselling. Of course, this is only additional data and should not be the sole input.

Experiences at TVRLS corroborate that 360° feedback has a lot of potential as a change management programme. It is hoped that many corporations will harness this potential.

Issues and their resolution

Some key issues faced in implementing a 360° feedback are as follows:

  1. Should 360° feedback be a development tool alone or a part of the appraisal process?

    Many advocate that it should be used as a development tool alone, and should not be shared with the supervisor. But for Wipro, TVRLS decided that it should form part of the appraisal. A key element of the appraisal system is the development of the employee. At Wipro, it is believed that the supervisor and the employee are partners in the employee’s development, with clear responsibilities assigned to both. The Wipro leadership questionnaire (WLQ) survey therefore needs to be shared with the supervisor so that she/he can enable the employee’s development and also commit the resources necessary for it.

  2. Should the concerned leader decide on her/his respondents or should the supervisor be involved?

    Initially, when managers were asked to give some names of the juniors they would sometimes give the names of those juniors across business units who were favourably inclined towards them. The junior was therefore re-termed as direct report. Where the actual direct reports were very few, TVRLS did not process the ‘junior’ part of the report to prevent direct identification.

    In case of peers, the leader could select those among them with whom she/he had interacted regularly. But the supervisor needed to approve the list to prevent mutual back-scratching associations.

  3. Should peers be kept confidential or not?

    While peers have no fear of being victimized, there is a fear that candid feedback might adversely affect daily interactions. The greater fear is that, realizing this, many peers would not be honest enough with the feedback. Hence, TVRLS decided to keep it confidential.

  4. Should qualitative comments be reproduced as they are or should they be edited to avoid personal comments or attacks?

    Any editing may affect credibility. The following question may be raised: If this has been edited, then who knows what else may have been edited too? TVRLS decided to reproduce all comments verbatim even if a few comments hurt.

  5. Do some people use this for political ends?

    In a way, this becomes the reverse of the confidential report (CR) because the feedback from juniors is anonymous, but the supervisor’s supervisor reads her/his comments. There is a temptation for some of the reports to use this as a tool to get even with their bosses or, in some cases, compensate for their own inadequacy. That is why TVRLS gives the mathematical distribution of the rating. It helps to understand if one respondent has taken an extreme stand, either positive or negative.

Preparation for implementing 360° feedback

It takes a lot of trust in an organization and a lot of preparation before one can move from using 360° feedback strictly for development purposes to using it to take decisions on promotions and rewards. Many companies are just not ready. The current literature on making 360° feedback an effective tool for performance and leadership-style reviews recommends the following:

  • Begin with development: It is advisable to introduce 360° feedback as an internal tool for personal development and growth if your company has no prior experience of this intervention. The feedback addresses a very basic change management process, and it can be frightening to a lot of people to think that they will be rated by subordinates and co-workers. Most companies have at least a one-year programme in place before linking it to performance reviews. GE pioneered the use of 360° feedback for over three years as a developmental tool, without seeing any change in the organization. The programme only gradually took root and has begun to be seen as an integral part of the company’s functioning and value system only in the last few years. One good alternative is to focus on a single department or division that seems most ready for 360°.
  • Link feedback with company goals: No programme as unorthodox as 360° feedback must be taken lightly. It must be ultimately linked to a significant business goal that is plain to everyone. Is the purpose of introducing 360° feedback to change the organizational culture? Or is it to enhance the performance management system? These are questions that need to be addressed.
  • Train everyone: TVRLS conducts training sessions for everyone who is likely to assess the candidate. Consultancy firms facilitating 360° feedback address issues such as data quality, confidentiality and accessibility of reports, and their ultimate use. Trust is critical to the accuracy of data and one way to ensure this is through training. Do executives view this as a constructive or punitive process? It is human nature to rush through to negative feedback. Training is required to focus on the positives, because that is where performance can truly be leveraged.
  • Follow up: The feedback report should finally contribute towards an action plan for improvement. The supervisor and the HR professional can help interpret the report so that the employee does not formulate a flawed action plan. As in the case of several contemporary companies, the action plan must eventually be tied to results as well as to the organization’s system of rewards and punishments. The focus is on individual accountability for bringing about the desired change in organizational culture. If employees, especially at the top and senior leadership levels, are not held accountable for doing something with their 360° feedback, they can simply ignore the findings and allow the perpetuation of negatives in that company.
  • Create a positive company culture: If your company’s culture is retaliatory and punitive, the 360° process will not work well. In an atmosphere of downsizing, where everyone is afraid to lose their jobs, 360° feedback could also poison people’s minds to the extent that they never want to use the process again. In fact, 360° feedback is most effective in a company which has a culture of learning and individual growth. If an executive is about to receive a 360° feedback but, during the previous year, she/he has either (a) not asked for feedback, or (b) has not taken action on the feedback received so far, or (c) feels that there will be some kind of backlash, then by the time this 360° process gets underway, there already exists an atmosphere of mistrust and fear. Unless some other development inputs are initiated to create a positive climate, 360° feedback will be of very limited value in initiating a culture change in that company.

In conclusion, it is important to note that 360° feedback can be a very significant behavioural intervention for ushering in a lasting change in Indian corporations that continue to be dominated by an autocratic top-down culture. Indian leadership at senior levels continues to demand obedience and gets it either through seductive or coercive means. Indian talent continues to flourish overseas or makes an unambiguous choice in favour of MNCs where a freer and more democratic climate prevails. The 360° feedback process, my experiences have led me to believe, helps top and senior leadership break away from the stiflingly hierarchical past, thereby developing competencies to attract and retain world-class talent so desperately needed to develop organizations with world-class standards.

Hurconomics: ROI on 360° Feedback

360° feedback is one of the least expensive HRD interventions or growth tools that have been developed in recent times. Though the term 360° feedback came from the USA, the practice has been followed in India since antiquity. Kings used to go about in disguise to find out what their subjects or people thought of them, and adjusted their leadership styles according to the feedback they got. Sometimes, they used gudacharis (spies) to collect the impressions they were creating in the minds of their public. For example, in the Ramayana, Rama sends his wife Sita away, based on a spy report of a dhobi’s impressions of Rama. In the mid-1980s, a programme that I designed at IIMA attempted to systematically capture the perceptions of managerial staff. This went on to become a very popular methodology, and is now known as 360° feedback.

At TVRLS, a 360° profile is done for a teacher or a headmaster for as little as 2,000. For managers, it costs a maximum of 5,000 per profiling. This includes the cost of the questionnaires, and so on. On the Internet, there are sites that offer free tools. Any interested manager can get herself/himself assessed even without involving a consultant. The real costs of 360° feedback are not the consultancy costs but the time required by assessors to assess the candidate. Each person seeking feedback is to be assessed on an average by ten people—the R-COT will be the equivalent of about 10 hours’ time. If this is done as a part of an in-house workshop, add to this another eight hours. The total costs are as follows:

Profiling cost = 5,000
Workshop cost = 5,000 (normally, feedback is given after the first workshop on how to use or not use 360° feedback)
Travel and workshop cost if the feedback is outside the city = 10,000
Time investment by assessors (R-COT) = 10 hours
R-COT of the assessee who has to mail the questionnaires, attend a workshop to receive her/his feedback data and gain insights = 10 hours
R-COT for 20 hours = 20,000 (at a CTC of 20 lakh and 200 work hours)
Total cost per head = 20,000 direct costs + 20,000
R-COT = 40,000

This is a one-time cost and normally a lifetime cost, as once you go through a 360° workshop a second one is not required.

O-COT for the time spent by the candidate ranges between 80,000 for the IT sector and 2,00,000 (2 lakh) for the manufacturing sector. The ROI expected from 360° feedback for each candidate = 20,000 direct or fixed cost + 80,000 O-COT = 1 lakh in an IT company and more in others.

Table 6.1 illustrates the benefits of 360° feedback.

One of the managers to whom I happened to provide 360° feedback could have avoided hospitalization if only he had taken the feedback seriously. He is a hardworking, loyal, sincere and dynamic person. He takes his job seriously, plans his work well, monitors his juniors and their work, and is always available to them. However, he was considered a very serious and introverted person. He rarely interacted with his juniors at the informal level or even smiled at them. He received feedback that while he was admired by his juniors and everyone else for his work and sincerity, he would be better liked if he became a little more informal, had lunch with them, joked around and appeared to enjoy his work more. His family also concurred with this feedback. The manager showed some change for a few days, but soon reverted to his earlier ways. A year after the feedback, he had to be hospitalized for stress and was off work for several months because of his stress-related ailments.

 

TABLE 6.1 Benefits of 360° feedback

Issue Possible benefits
What is the benefit of discovering your new talent? You will apply it more and benefit the company and also build your career. Perhaps, your income will double in the next five years. Only 1% of this is the expense you have incurred on your 360° feedback.
What is the benefit of finding out that you do not fully understand the expectations of your internal customers or your juniors, and that your wavelength is different from that of the company? You meet your internal customers and get to know more about them. There is more communication with colleagues and therefore more respect. There is more integration, teamwork and respect from your internal customers.
What is the benefit of discovering that you are not delegating work? You start delegating more. This may release a lot of your time from routine work and lift up your level of operations in the company. You will have more competent and well-rounded juniors who admire you more.
What is the benefit of discovering that you are a good leader, your juniors and seniors are happy with you, and that your leadership style is appropriate? There is more self-confidence and more dynamism, and at least a 10% increase in your efficiency, motivation and morale.
What is the benefit of discovering that your style becomes coercive when your juniors make mistakes and you lose your cool, and that this creates low morale and motivation problems in the company? You alter your style as you become more sensitive. Subordinates are more adjusting. There is better management of mistakes in the department and higher learning from them.
What is the benefit of discovering that you are not perceived as benchmarking with the best and that you need to be better-informed and get more world-class manufacturing practices into the company? You study other practices, get wiser and introduce new practices. You come to be known as a leader and initiative-taker. The company gains from your interventions in terms of cost reduction, greater efficiency, and better quality of products and services.

So do get your 360° profiling, but act on it too in order to reap the benefits.

On the other hand, 360° feedback also may have an emotional cost. Sometimes when people do not receive positive feedback or if someone is ultra-sensitive to negative feedback, the cost of the feedback is likely to be high, in terms of the candidate developing negativity and a vengeful attitude. Though such cases are rare, they cannot be ruled out. Beware of the costs if the seeker of the feedback is excessively defensive or is not ready to learn. 360° feedback is useful for learners. Hence it should not be used indiscriminately. The workshops prepare candidates for receiving the feedback and this is an important step.

References

Rao, T. V. and Rao, R. (eds), 2001, 360 Degree Feedback and Performance Management Systems, New Delhi: Excel.

———, 2003, The Power of 360 Degree Feedback, New Delhi: Response.