As harini says, 360-degree appraisal is better as it minimizes bias from the manager. Each person has their own perspective and finding out those multiple perspectives may give a better picture of the appraisee’s performance.
However, with every benefit there is a risk. The risks of using 360-degree feedback are that:
-anonymity can be jeopardized with the appraisee going on a witch-hunt to find those who rated them poorly
-extra resources are required to conduct the survey and this may take time and money away from more critical business areas
-appraisers and appraisees may collude to give inflated ratings if the awarding of bonuses are dependent on scores
-you need a minimum number of participants to guarantee anonymity
-appraisees can be left very demoralised if the feedback is not given using a professional facilitator
I am a great fan of 360-degree feedback. The lesson is that if it is not implemented properly and professionally, there is a risk of it causing more harm than good.
Vicki Heath
Human Resources Software and Resources
http://www.businessperform.com