Our survey also asked line managers who had participated in multi-rater feedback to identify what they believed was the purpose of the process (they could choose all that apply, therefore percentages don’t add up to 100). At the top of the list was individual development (61 percent), followed by to inform the performance appraisal discussion (46 percent), to enhance team effectiveness (33 percent), to identify individual or organizations training needs (28 percent), and to support the achievement of business strategy (24 percent). Fourteen percent or fewer said as part of a coaching intervention, to facilitate culture change, or to help make selection decisions.

In our own practice we have found development to be the most frequent use, but sometimes just as a starting point. We have seen a trend toward a broader use of 360-degree feedback, as organizations become more comfortable with the technology and become more aware of its potential to facilitate change. Having helped hundreds of companies solve a wide range of business issues, we have seen 360-degree feedback used effectively in a number of ways in addition to development. What follows is a list of applications for multi-source feedback that have proved effective.

To Achieve Business Strategy and Culture Change by Clarifying the Behaviors That Are Required to Support These Initiatives. Once an organization has clarified its strategic direction and determined its business objectives, a 360-degree feedback process can be a key element in refocusing the workforce to attain changed organizational goals through changing their behavior.

Real culture change can be achieved only by getting people at all levels of the organization to behave in ways that support the change. Leaders must both adopt new behaviors and encourage different kinds of behavior in others. People need to know not only what will be required of them in the future but how much divergence there is between their current behavior and future expectations.

Gathering feedback on the relevant behaviors sends a clear message to people throughout the organization about what is important and what will be evaluated and rewarded. Since the manager’s boss, direct reports, and peers are often in the best position to observe his or her current behavior and highlight any gaps relative to expectations, 360-degree feedback can be a highly effective starting point for change.

Hy Pomerance, Ph.D., global head, talent management, human resources, UBS Investment Bank, describes how tailoring the feedback that is collected as part of their Performance Management and Measurement (PMM) process provides the opportunity to drive critical behaviors in the organization. At its inception, the 360 was a way to get alignment around culture and the best way to link pay to performance. The 360 and the PMM were a roadmap that continues to evolve and to send messages about what is important. “We will step back on occasion and make adjustments to the categories that make up our system. For example, if we feel that cross-selling or cross-organizational collaboration are not occurring at the levels that are required to meet our business objectives, these behaviors become part of the feedback that is collected. People learn what is critical for the business and get explicit feedback on how their behavior is or is not contributing to the accomplishment of those objectives.”

To Enhance Individual and Team Performance. As our survey data show, 360 feedback can be a powerful element in pinpointing and driving individual development needs. When applied at an individual level, a range of objectives can be met, including helping managers make the transition to a role with greater or more diverse responsibility, understanding the behaviors that are required for success at the next level, and clarifying skill gaps and highlighting development needs.

A high-potential manager in one of our client organizations describes how participating in a 360 process was an invaluable way to understand what would increase the likelihood of her ability to advance in the organization. The results from an internally developed tool helped her learn about what she was doing well and should continue to do and what she needed to improve. She says, “In most places it is easy to get downward feedback, but not as easy to get upward feedback. While my results were overwhelmingly positive, the constructive feedback was helpful in that I was able to attend to areas before they became blind spots that worked their way into my day-to-day behavior.” As a result of her development strategies, the manager was able to work more effectively with her project teams—she listened to their feedback about her need to be “present” in meetings, not letting competing priorities distract her, and to remain focused on the project objectives in front of them. She especially felt that the feedback she received was of high quality and from people who could “go beyond one point in time and give a perspective that provided themes and threads.”

The behaviors that contribute to an individual’s effectiveness as a member of a team are very different from those required in more traditional hierarchical relationships. As organizations increasingly turn to team structures—cross-functional teams of various tenure—to improve profitability through enhanced efficiency, responsiveness, and quality, people find they have to learn a new set of skills. Many companies are developing 360-degree feedback processes that focus on skills required for effective teamwork; the data they gather can both clarify which behaviors are most essential and help people understand what they have to do to help improve team effectiveness.

Penny Nieroth, president, Learning by Design, has found the use of 360 in team settings to be particularly valuable after a new team has been formed. She describes administering a 360 in combination with a personal style assessment. “A team that has been working together for several months can use the individual data and group data as a starting point to break down barriers and build relationships. Focusing on emotional intelligence factors was especially useful for helping members of a cross-cultural team acknowledge personality issues and personal challenges.” Nieroth, in following up with the team several months after her initial work, found that relationships had improved, business issues were being addressed more directly, and the strengths of each individual were being valued and leveraged by all.

UBS is one of many organizations where this is the case. Hy Pomerance says that the aggregated data from their PMM is used to inform the design and delivery of various talent management programs. In addition, UBS has a separate 360 that is used strictly for development purposes as part of a program for senior high-potential managers or key position holders.

Recent trends indicate that the use of multi-source feedback for administrative purposes is on the rise.⁸ More and more performance appraisal systems are being revamped to include evaluations from peers and direct reports.⁹ Fifty percent of companies that responded to a recent survey indicated that multi-source feedback was being used for formal appraisal, job placement, pay decisions, and downsizing. In fact, one organization that compared the predictive accuracy of its assessment center data and that of direct report feedback discovered that feedback of direct reports was a better predictor of leadership effectiveness. ¹⁰

Detailed examples of these applications are given in Chapter Two. In most cases, we found that the feedback process addressed more than one of these goals. This is because the goals themselves, as they are defined by the organization, may be intricately entwined. For example, promoting culture change and achieving business objectives are seldom approached as two distinct, separate aims; rather, the culture change itself is generally intended to serve a business purpose.