Performance Appraisal and Managers Perceptions of the Impact of 360 Feedback on Staff Self-esteem, Motivation and Job satisfaction in the Workplace
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Background: This dissertation sought to determine the impact of 360-degree feedback on staff self-esteem, motivation, and job satisfaction in the workplace. A range of relevant literature regarding the 360-degree and other staff performance appraisal systems was explored... This dissertation study thus adds to the understanding of the specific factors that mediate between 360-degree feedback and employee reaction to it.
Method: Further research through semi-structured interviews with 13 managers across 6 organizations was also conducted, exploring managers’ perceptions of how feedback affects staff self-esteem, motivation, and job satisfaction in the workplace.
Results: Results of this study indicate that if the context and conditions for 360-degree feedback are right, 360-degree is a very effective tool for improving individual and organizational performance. The results show that three contextual factors play a critical role in whether feedback impacts self-esteem, motivation, and job satisfaction negatively. The most important of these factors was how feedback is delivered. Secondly, a lack of proper training in giving and receiving feedback had the effect of reducing the quality of feedback which directly impacted employees’ self-esteem, job satisfaction, and motivation to use any such feedback. Thirdly, choosing the wrong feedback source had the effect of reducing source credibility which subsequently impacted the effectiveness of 360 degree feedback in motivating employees to use any such feedback. If the selected raters were not credible, such as those with whom employees have great relationships, the quality of the feedback becomes poor and potentially negative to employees' self-esteem, motivation, and job satisfaction.
Recommendations: Based on the findings, recommendations were proposed that incorporate best performance management practices of how 360-degree activity can help influence staff performance and development.
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Exploring 360 Degree Performance Appraisal and Managers' Perceptions of the Impact of 360 Feedback on Staff Self-esteem, Motivation, and Job Satisfaction in the Workplace Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand the impact of 360-degree feedback on staff self-esteem, motivation, and job satisfaction in the workplace
- Understand and discuss relevant literature regarding the 360-degree and other staff performance appraisal systems
- Understand the advantages and drawbacks of 360 – degree feedback
1.0 INTRODUCTION
Companies use a lot of tools to manage the performance of their employees. Performance management as it is commonly called in the language of HR has been around since the 1980s. It has been the main tool by which HR managers communicate to employees what is required of them as well as being a chance to provide feedback on how well they are performing. One of the most popular tools in performance management used for both developmental and evaluative purposes is 360 degree appraisal. 360-degree feedback appraisal systems are some of the best when it comes to staff development and training, the tool of choice for many organizations wishing to reach the next level of success (Armstrong 2009).
Reaching the next level of success, however, requires reliance on accurate feedback and honest communication in order for employees to understand their strengths as well as weaknesses. Once an organization has identified individual employees' weaknesses as a result of 360-degree feedback, then will it be able to improve employee performance by drafting developmental plans of action for such employees. This ability of 360-degree appraisal that allows employees to examine each other’s perceptions of their performance when compared with their own perspective is what makes it differ from traditional performance review approaches.
In other words, 360 degree stands out from other appraisal and developmental tools in one key area; its approach to performance appraisal differs because feedback comes from lots of other sources beyond one’s immediate line manager or subordinates. With a 360degree approach, feedback comes from other sources beyond the individual’s immediate boss or line manager (Torrington et al 2005). This can include subordinates, peers, and sometimes, external sources such as suppliers and customers can be consulted (Mabey 2001; Armstrong 2009; Handy et al 1996; Ghorpade 2000). Because of the collaborative effort in giving and receiving feedback, 360-degree activity is a mechanism that improves communication and workgroup trust.
But while the logic behind a 360-degree appraisal is simple enough—let peers rate each other—it is also one of the hardest practices to implement for reasons often to do with cost, which is why it tends to focus on the manager level and above (Pfau 2010; Torrington et al 2005; O’Boyle). There are also still question marks regarding its effectiveness with flaws such as raters bias, and collusion having been reported (Torrington et al 2005). Other studies show negative 360 feedback effects reportedly leading to reduced staff effort, dissatisfaction with rater peers, and lower commitment to colleagues (Armstrong 2009).
However, is also considerable research study results showing positive effects of 360 degree feedback such as improved leadership performance (see e.g. Atwater et al 1995; Gallagher 2008; Hazucha et al 1993) as a result of helping deepen employees' understanding of their own performance which leads to an improvement in both professional and personal development of staff after insightful feedback (Milliman et al 1995; Pfau et al 2002).
The result is studies into the impact of 360-degree feedback are contradictory and inconsistent. Given all the inconsistency, many studies have since come to the conclusion that maybe the impact of negative feedback is contextual and dependent on other mediating factors (Fletcher and Baldry 2001; London and Beatty 1993; Steelman & Rutkowski 2004). In fact, Steelman & Rutkowski (2004) hypothesized from their study results that this inconsistency may be an indicator that it is not the negative feedback that may be causing the negative reactions reported. Rather, they argued that three moderating factors namely; source credibility, feedback quality, and how feedback is delivered, maybe the main factors that affect reactions to 360-degree feedback hence leading to the negative impact experienced by participants.
Summary
360-degree feedback is a performance appraisal system that relies on multi-source feedback during the evaluation of an individual. It is both an evaluation and a developmental tool although most organizations use it mostly for the latter when developing employees into leaders. But the logic behind it is quite simple, its implementation is so difficult that many studies into its effectiveness contradict each other. But other studies have shown that much of its effectiveness may be contextual, dependent on other factors to bring out the best from the feedback. In other words, 360-degree appraisal and feedback don’t operate in a vacuum, its impact may be contextual as shall be explored in the rest of the dissertation.
The research aims and objectives
- The purpose of this paper is to explore the on-the-ground understanding of performance management and the concept of 360-degree appraisal as both an employee developmental and evaluative tool.
- Explore managers' interpretations of the impact of 360-degree feedback on staff self-esteem, staff motivation, and job satisfaction in workplaces
- Make recommendations based on primary research regarding best practices for effective application of 360-degree feedback and appraisal in the workplace
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