Hello Sanjeev, I agree with a lot of what you say, and it is the foundation for many 360 degree appraisal systems. Our experience and the experience of other senior HR consultants that we speak with see some significant risks in linking scores on 360 degree appraisals with salary increases and bonuses. I would say the same holds for linking to promotions and even whether the person will have a job tomorrow.
Where these outcomes are linked to what is a subjective evaluation instrument (yes, being multi-rater it is more “objective”, but essentially it measures people’s subjective valuations), we find and hear from others that there is a lot of argument about the validity of the results. Imagine for a moment that your bonus or your job was dependent on some number from a survey. Wouldn’t you fight for a favorable outcome. What we find is that in this process, people lose track of the developmental opportunities (How can I use these results to improve?) and focus on the all-important number.
Sanjeev, instead of this method removing favoritism and buttering as you hope, it can and does increase its incidence. The literature talks about how improperly implemented 360 degree appraisal systems lead to “collusion”, where raters and participants get together to promise giving each other higher scores.
Yes, getting feedback from customers, peers, managers, etc is very important, and yes, employees need to get multi-rater feedback using a survey form or via feedback meetings, or whatever. Many companies are now reaping the benefit of multi-rater feedback systems without the inherent risks by splitting the appraisal system in two.
1. Objective, meaningful, measurable and agreed goals are used to determine salary increments, bonuses, promotions etc.
2. Multi-rater feedback is used as a basis for discussions about future behaviors and development opportunities. With the heat taken out of these discussions about “behavior”, the manager and employee are free to now discuss in an open and honest way.
For those who are interested, we have some more information on
performance management systems at
http://www.businessperform.com/html/...anagement.html
Vicki Heath
Human Resources Software and Resources
http://www.businessperform.com