Peers, Subordinates, Clients Weigh in on Employee Reviews
Ever wanted to tell your colleagues what you really think of them?
Someday in the not-so-distant future you may have to, if you don’t already, as part of an emerging trend in employee evaluations.
That’s because a growing number of companies are embracing review systems that use a variety of sources, including employees themselves, their peers and subordinates and even outsiders such as customers.
As companies eliminate layers of management and decentralize power structures, the traditional one-sided, top-down review of subordinates by their supervisors is becoming a thing of the past.
Over the last decade, businesses both big and small have switched to two-way reviews that incorporate self-evaluations from workers listing their contributions, strengths and weaknesses.
“By looking at both sides, the gaps between the expectations of employees versus the expectations of management become very apparent,” said Anita Gorino, president of the Professionals in Human Resources Assn. and a Thousand Oaks consultant. The next step could well be what’s known as 360-degree feedback, an evaluation process that can draw on the opinions of virtually anyone an employee does business with. Although few companies have adopted it, the idea has gained a lot of attention in human resources circles.
John Parkington, an organizational effectiveness expert in San Francisco, can relate firsthand experience with 360-degree feedback to his clients. The consulting firm he works for, Watson Wyatt Co., is in its second year of using the system to evaluate performance--so far, with good results, he said.
“One of the best aspects of this is that at the beginning of the year, every employee has the opportunity to create their own set of criteria that they will get feedback on,” he said. “So from the start, the process is very much personalized, and I think that means it becomes much more relevant.”
In addition, employees get feedback on a more frequent basis. Rather than receiving a year-end evaluation, they get input on their work every few weeks to every few months, typically at the end of a specific project.
To prepare for the new process, the company needed to educate employees, both as a way to encourage timely participation and to reduce anxiety about the change.
“People needed to know what they were expected to do, and that this wasn’t putting their job in jeopardy,” Parkington said.
Some companies such as Toyota Motor Sales U.S.A. Inc. in Torrance are testing the waters by offering 360-degree pilot programs as a supplement to two-way reviews, with no effect on merit pay increases.
Several hundred employees at Toyota have volunteered over the last year to undergo evaluation by seven to 10 of their co-workers and customers, who typically answer up to 40 open-ended questions on areas such as interpersonal and general management skills.
But while comprehensiveness is one of the 360-degree system’s biggest advantages, it’s also one of its biggest drawbacks.
Jul Hermosisima, a human resources consultant who has helped foster 360-degree reviews at Toyota, concedes it can be time-consuming, often taking six to eight weeks to process reviews.
Others point to increased costs, a difficult proposition for companies trying to do more with fewer resources. And some worry that 360-degree feedback can do more to hurt company performance than help it.
But whatever evaluation path managers choose, analysts said one trend is clear: Reviews no longer merely grade workers on their performance; they’re also increasingly used as tools to help employees develop skills.
One signal of this change has been the switch from ranking employees on numerical scales to basing reviews more on written comments.
“A lot of times ratings don’t sufficiently capture the picture,” Parkington said. “With comments, you can help modify specific behavior. You can focus on what someone does well, and you can identify areas for improvement. You can’t really do that with a number.”
