Hi! This subject matter keeps coming back. Since the creation of CiteHR by Sid in 2004, we have been discussing this 360-Degree Performance Appraisal System. And, this particular thread was first posted ten (10) years ago. Anyway, let me help out after 16 long years of endless discussion on this subject matter:
Understanding the 360-Degree Appraisal System
1) The 360-Degree Appraisal System is not an appraisal tool per se. It is simply a paradigm or framework for conducting or implementing the appraisal of employees in a company.
2) As a paradigm, the 360-Degree promotes the concept of "multiple raters" (multi-raters as mentioned by one above) compared with the traditional "single rater" (immediate superior) approach.
3) As a system that embraces the advantage of multiple raters, the 360-Degree suggests that all important contacts of the employee must be asked to rate the said employee's performance. The final rating that an employee gets will be the average of all the ratings given to the said employee.
4) The most common raters identified are: a) immediate superior, b) fellow employee, c) customer, d) subordinate employee, e) supplier.
Challenges in the 360-Degree Appraisal System
5) The usual problems and/or issues raised in the 360-Degrees are the following: a) the correct and appropriate weight of each of the rater's ratings that would be acceptable to both the employee and the company; b) the length of time needed for its rollout and processing, especially when the company has thousands of employees; c) the correct "appraisal form" that will provide the most objective and valid rating scores to the employees in a particular industry.
Many of the above issues have not been properly discussed and addressed by the most ardent promoters of the 360-Degrees. There are some who think that simply accepting the idea of multiple raters is enough to be able to implement it. But those of us who have been setting up appraisal systems worldwide know that it is not that simple - like eating a cake or making coffee.
Best regards.