Although terms may vary from company to company, most organizations have human resource management (HRM) systems for planning, selection and placement, appraisal, development and training, and compensation. HRM systems are managed to align with and facilitate corporate or business unit objectives and strategies. While the subsystems of these components may have unique elements, the processes and structures of one system are likely to influence or be the source of information for another.

Attempts to integrate 360-degree feedback into these systems and processes can meet with significant hurdles. In The Handbook of Multisource Feedback¹ a significant number of contributors share their perspectives on these hurdles. As organizations explore the possibility of using 360-degree feedback to enhance HRM systems, we predict that many will be disappointed when they learn that merely applying the technology is not sufficient for successful results. They may not have clarified how 360-degree feedback can contribute to each HRM system or determined the role 360-degree feedback will have in the decisions that are made about employees. If their current HRM systems are weak or poorly implemented, multi-source feedback will not make them better. On the other hand, if their current systems are working well, they may be disappointed that the feedback has not made an immediately noticeable difference.

In this chapter, we will discuss the role 360-degree feedback can play in aligning three key components of a human resource management system—development and training, appraisal, and compensation—with organizational objectives. We will review both potential problems and the steps you can take to avoid them.