Benefits and Best Practices of 360 Degree Feedback

Leadership development is one of the heaviest human capital investments that organizations make today. This transition marks a fundamental culture shift in how organizations can most successfully manage talent. Today, the most successful organizations know that attracting and retaining top talent is only half the battle. Developing future leaders by preparing them for future responsibilities is the best way to create leaders that can navigate disruption and organizational change.

One of the most successful ways businesses can develop future leaders is through a simple, but powerful tool – 360 degree feedback. Nearly all Fortune 500 companies use some method of 360 degree feedback for their leadership development programs. These corporations use a variety of methods are used in leadership development interventions, including executive coaching, mentoring, and multi-source feedback tools. This study will focus on 360 degree feedback as a best fit tool for leadership development programs.

Benefits of Multi-Source and 360 Degree Feedback

Multi-source feedback refers to a method of performance review in which feedback comes from more than one individual. Multi-source feedback tools are instrumental to personal and professional development because they aggregate information from several important sources, including self, peers, subordinates, and supervisors. 360 degree feedback refers to a specific kind of multi-source feedback that includes ratings from all four of the raters mentioned earlier.

360 degree feedback is useful because it reveals hidden information about the perceptions of strengths and weaknesses among raters. Additionally, providing feedback from multiple sources makes negative assessments more difficult to deny or discount than if only a single rater provided the feedback. As a result, individuals receiving feedback from a 360 degree feedback tool may be more motivated to adjust their behaviors to lead to better ratings.

360 degree feedback tools have been shown to provide information that is unavailable in traditional feedback models. In a comprehensive meta-analysis, James M. Conway, Kristie Lombardo, and Kelley C. Sanders laid a scholarly foundation for 360 degree feedback in their 2001 article published in the Human Performance journal. To summarize, their work found that multi-source feedback provided “incremental validity” that could not be compared to non-traditional feedback sources. Furthermore, the addition of peer and subordinate ratings was shown to improve the predictive ability of feedback on objective business outcomes. The research of Conway, Lombardo, and Sanders, as well as the research of those before and after them, overwhelmingly suggests that more qualified opinions means much better feedback, and stronger feedback means stronger leadership development programs.

The Best Uses of 360 Degree Feedback For Leadership Development

Furthermore, a great deal of research has been conducted that defines the most effective means by which to use 360 degree feedback tools for personal development. A Personnel Psychology study conducted by James W. Smither, Manuel London, and Richard R. Reilly suggests that feedback is most likely to result in positive change when recipients have

  • a positive feedback orientation
  • change is believed to be achievable
  • subjects take actions toward specific, appropriate developmental goals.

These strategies can be assisted by preparing participants for the feedback within the leadership development process, managing employee perception of the process, and integrating the process into the greater organizational system of talent management and development.