An overview of the research on 360 feedback with advice on how to apply the lessons learned to creating an effective leadership development experience.

1. 360 Best Practices Presenters Burgess Levin, Senior Executive Consultant Mary Saily, Executive Consultant Kelly Packard, 360 Project Manager We did the research so you don’t have to

2. The Benefits of 360 Feedback To the individual: Helps individuals to understand how others perceive them, and uncovers blind spots Provides essential and quantifiable data for learning from the “right people” Allows individuals to better manage their own performance and careers To the team: Increases communication between team members Builds higher levels of trust as individuals identify the causes of breakdowns Enhances team environment as people discover how others want to be treated Supports teamwork and increases team effectiveness by involving team members in the development process To the organization: Reinforces corporate culture by linking to organizational leadership competencies and company values Supports career development for employees and promotes promotion from within Has the potential to improve customer service by having customers contribute to the evaluation process Supports relevant training Increases retention Supports “flattening” of organizations by promoting communications 2

3. Mercer Consulting The use of 360-degree feedback has grown dramatically In 1995, 40 percent of companies used 360-degree feedback In 2000, this figure had jumped to 65 percent Dr. Jeffrey C. Pfeffer (June 2002 quote in HR Magazine) Professor of Organizational Behavior at Stanford University 3 If we practiced medicine like we practice management--based on hunch, intuition and ideology--we would have much more malpractice...

4. OMG This Should Not be Happening Watson Wyatt (2001) 360-degree feedback programs may hurt more than they help In an ongoing study of the linkages between HR practices and shareholder value at 750 large, publicly traded companies, 360-degree feedback programs were associated with a 10.6 percent decrease in shareholder value Peer review accounts for 4.9 percent Upward feedback accounts for 5.7 percent Kluger and DeNisi (1996) Feedback interventions in general (i.e., providing feedback concerning individual performance or behavior) do not always improve performance About one-third of the effects were negative (i.e., feedback detracted from performance) and one-third reported no impact at all Extremely negative and discouraging feedback was shown to decrease the effectiveness of feedback interventions [confirmed by Smither and Walker (2004)] Smither, London, and Reilly (2005) In many cases not much improvement was found between year 1 and year 2 Jai Ghorpade (2000) The 360-degree concept has serious problems related to privacy, validity, and effectiveness 4

5. 5 The report of my death was an exaggeration Mark Twain The fact that feedback interventions are often less than successful points to the importance of understanding Whether upward or peer feedback can be effective The conditions that enhance or detract from its effectiveness

6. The Research Extensive, but not always useful or believable Over 50 studies contributed to this presentation Many in their entirety, some were referenced in the research reviewed Ranged from 1991 to the present Selected bibliography provided Also contributed HumanR research More sophisticated over time Have focused increasingly on deconstructing the process and understanding how each element contributes 360 feedback program outcomes Before beginning a 360 feedback program During the process Follow-up after the 360 report has been generated 6

7. 360 Program Outcomes The use of 360-degree feedback helps people improve performance(Hazucha et al., 1993; London & Wohlers, 1991; Walker & Smither, 1999) Walker and Smither, 1999 a 5-year study No improvement in overall ratings was found between the 1st and 2nd year, but higher scores were noted between 2nd and 3rd and 3rd and 4th years Reilly et al., 1996; Smither, 2003 Performance increased between the 1st and 2nd administrations, and the improvement was sustained 2 years later ______ Integration with goal setting is associated with improving 360 scores Alwater & Brett, 2006; Maylett & Riboldi, 2007 Improvements in 360 scores are linked to improved employee engagement and retention, and to better financial results 7

8. 360 Program Outcomes ___________ Participants with “Hidden Weaknesses” (where self-ratings are higher than ratings from peers and/or subordinates) show the most propensity for improvement 8

9. 360 Best PracticesBefore Beginning Be clear about the organizational context Program scope Leader self-service Programmatic leadership development Organization-wide implementation In response to a pressing organizational need to engage in different behaviors Commitment to multiple administrations Commitment to appropriate training and/or supporting infrastructure Strategy for communicating the purpose and desired outcome Negative indicators Faced with serious restructuring and/or downsizing Organizational cynicism Lack of a clear and careful implementation strategy 9

10. 360 Best PracticesBefore Beginning Make sure you have a robust 360 process Confidentiality, anonymity, trust, and honesty Rater feedback needs to be consolidated Provide ratees with assurances that their results will not be shared without their knowledge Process inputs off-site Instrument should reflect behaviors important to the organization Customize – one size does not fit all Tied to and integrated with organization’s competency framework Differentiate items for ratees at different organizational levels Differentiate ratings for rater groups (e.g., customer) 10

11. 360 Best PracticesBefore Beginning Customize the report to promote a “guided exploration” of the results as opposed to just “basic” item data Gaps Address each rater group independently 11

12. 360 Best PracticesIn Process Choosing raters Eichinger, 2004 The most accurate ratings come from knowing the person long enough to get past first impressions, but not so long as to begin to generalize favorably Raters in the group “known for 1-3 years” are the most accurate Followed by <1 year, 3-5 years, and finally >5 years Process concerns Manager exhaustion Mitigate using electronic collection methods Flexibility Be prepared to bend the business rules Trust In-house person must demonstrate integrity and respectability 12

13. 360 Best PracticesFollow-up Organizational support London and Smither (1995) Only 40% of respondents reported that feedback was linked to a specific development program Self-service vs. Programmatic Participate in facilitated training on how to interpret results Coaching Ties into how feedback will be distributed To ratee To ratee and their manager/coach To facilitator for distribution at a workshop Bolton, Katok, & Ockenfels, 2004 Online feedback promotes anonymity and trust in the process, as well as trust in the authenticity of the feedback Case Study In this organization, managers were rated by their direct reports on a few key organizational competencies prior to attending a week-long development program. On each morning of the program, the participants received upward feedback relevant to the competency that would be developed during the remainder of the day. At the end of day (after completing the training module), the participant would create goals and action plans related to the subject competency. 13

14. 360 Best PracticesFollow-up Build in ratee accountability London, Smither, and Adsit (1997), London & Smither (1995), Timmreck (1995) Managers often receive feedback solely for developmental purposes and are not accountable for doing anything with the feedback Many (about 40%) programs collect and provide feedback only once (so ratees do not expect that they will be rated again by their coworkers) and many do not require ratees to participate in specific developmental or training interventions in response to the feedback Alan Walker and James Smither (1999) What managers do with upward feedback is related to its benefits Managers who met with direct reports to discuss their upward feedback improved more than other managers Managers improved more in years when they discussed the previous year's feedback with direct reports than in years when they did not. Locke and Latham (1990) Feedback alone is not the cause of behavior change, instead it is the goals that people set in response to feedback Leadership Development Plan - commitment to a developmental process Meet with raters to discuss results and plans 14

15. 360 Best PracticesConclusions 15