The Top 40 Problems With 360-degree Employee Feedback Processes (Part 1 of 2)

This “think piece” is part of a series of articles I wrote to expand your thinking about strategic HR.

360° employee feedback surveys are one of the most common HR practices, but unfortunately that popularity may have led to a degree of complacency. Whether you design, execute, or are merely asked to fill them out periodically, you should be interested in maximizing their effectiveness. After years of extensive research on the 360° process, I have found that there is far too little focus on the potential problems and the many weaknesses associated with the process. My research and experience with HR leaders has helped me compile a list of the potential issues, problems, and concerns that should be considered by anyone designing the process or interpreting its results. Your survey results will improve dramatically only when program managers and users are fully aware of all of its potential problems.

The following article highlights each of these potential issues within seven categories.

The Top 40 Problems With 360° Employee Feedback Programs

The top potential issues/problems are split into seven categories: Business Impact, Problems Related to Using the Results and Taking Actions, Employee Related Issues, Manager Issues, Issues Related to the Survey Process, Problems Related to Anonymity, and Program Administration. Part 1 of this series includes 22 issues within the first three of the seven categories. Within each category, the most impactful problem areas are listed first. Note: even though 360° surveys can be used for individual managers, the problems outlined here focus on company-wide surveys.

I) The Business Impacts of 360° Surveys

1. It may not improve performance— most organizations have no cause-and-effect data that actually proves that the 360° process directly improves productivity, increases retention, decreases grievances, or that it makes managers more effective. They don’t even have evidence of a correlation between high 360 scores and improved performance.
2. Soft goals make proving success and business impact difficult — almost every 360° process has “soft” goals, and the goals that are used do not cover business impact. For example, a goal to measure employee satisfaction with their manager or the company is not the same goal as using the survey results to directly improve productivity. Soft goals may include merely collecting and reporting data, increasing employee satisfaction, identifying people management problems, developing leaders, and helping managers understand employee issues. Business-impact goals could include improving productivity, raising revenue, cutting labor costs, increasing innovation, increasing quality, or increasing customer service.
3. It reports historical information — if the process itself takes months and if the survey is only administered once a year, this significant time delay may cause you to act on data and information that is no longer accurate. In a rapidly changing environment, the past may not be the best model to learn from. No process that I know of attempts to predict future employee attitudes.
4. One-on-one communications may be superior — research by Google indicated that unassisted one-on-one communications have the most impact on making a leader effective. New technologies like an internal social network may also be superior. Also, 360° surveys may only make a difference in “sick” organizations, because well-managed companies get better feedback, faster and cheaper, using other approaches.
5. It may limit other forms of communications — an overreliance on it may cause managers to reduce their use of other valuable communications mechanisms. Reliance on it may also cause HR not to “fix” or improve other communications approaches. It may also inadvertently make managers lazy and they may stop “managing by walking around.”
6. High 360° scores may be a byproduct, not a cause –– when employees are productive, well rewarded, recognized, well-managed, and when they produce a great product, it may be those workplace factors that eventually increase their 360° scores. Even if there is a correlation between the scores and productivity, it may not be that the higher scores are driving the productivity, but vice versa.
7. Outside factors may influence 360° scores — we know from morale and employee satisfaction surveys that many factors outside of the workplace influence survey ratings. The unemployment rate, the cost of living, the mortgage crisis, family crisis, etc. Even though they are completely out of the control of a manager, they are but a few of the many factors that may directly influence employee ratings. In addition, the results may be skewed by recent events and they may not be reflective of a manager’s performance over the entire period.
8. High survey scores may not prohibit turnover — even if employees give their manager a low score, they may stay anyway simply because they like the firm or there are limited external opportunities. Do your own research within your own firm to prove that improved 360° survey scores actually cause people to stay, work harder, or be more productive.
9. Employees can perform extremely well without liking their boss’s style — there is plenty of hard evidence from sports and entertainment that individuals can perform extremely well even without liking a manager or their approach to employees. Professionalism, pride, the pay, and job security are among the many factors that cause even discontented individuals to perform and to stay at an organization.
10. It is tactical, not strategic — most employees don’t understand strategy or the big picture, so their feedback may be limited to the tactical, and provide no real insight into strategic issues.
11. Feedback is not productivity or an output — using an analogy, feedback may be smoke but it is not fire. The primary concern of business leaders is increasing productivity, output, or innovation. Unfortunately, employee feedback and satisfaction may contribute to productivity but they are not productivity. A superior approach is one that looks at all of the factors that directly increase productivity, that lower labor costs, and that increase the value of labor outputs and innovation.

II) Problems Related to Using the Results and Taking Actions

1. Reaching a clear conclusion is difficult — some 360° surveys cover so many factors (i.e. satisfaction, performance, sentiment, trust, morale, happiness, burnout, commitment, and even engagement) that the results overlap or conflict. In addition, the results throughout the company may vary so widely that even though the overall average score may be good, there may be pockets of severe problems at the firm.
2. All employees scores are lumped together — 360° surveys treat all employees equally and the opinions are averaged. And even you should know specifically how high-impact employees (i.e. top performers, innovators, game changers, and pioneers) feel about and the firm, the anonymity of the process does not allow it. As a result, the scores from malcontents and low performers are counted the same as the results from top performers. If a manager has a small team and limited scope, there may not be enough employees participating to make the feedback statistically significant.
3. The results may not be actionable — the survey is one-sided in that it asks for problems but it doesn’t ask employees for solutions. Leaders have to guess or use trial and error to determine what factors to change and how to change them in order to increase productivity levels. It is also possible that employee attitudes and behaviors cannot be easily changed with the employee management tools available to firms.
4. Identifying the most powerful actions may be difficult — we know from the Hawthorne studies that merely paying attention to workers may increase their satisfaction and productivity levels. If that effect is present, it may make little difference which action you select to improve low 360° survey scores, because it is the mere act of taking action and paying attention that increases survey scores. Obviously if “anything works,” it will be more difficult for program leaders to identify the actions with the most immediate impact, with the lowest costs, and the highest bottom-line impact.
5. It may take too long for actions to increase survey/business results — you must know which actions directly improve employee scores, but you must also know how long those actions take to have an impact. Since with most surveys you are dealing with feelings and attitudes, it may take years of using the most effective approaches in order to permanently increase the scores. And unfortunately, if there is a multi-year lag between changing the way we treat employees and their resulting improved scores, most existing business and statistical process will never be able to prove a cause-and-effect connection.
6. Anonymity means you can’t target your actions — because the results are anonymous, there is no way to “target” your improvement efforts to key individuals, high-performers, high-impact jobs, and business units that have low 360° scores. Although some surveys allow you to separate scores by business unit, if you only have companywide results, your only options are companywide “shotgun” actions rather than a pinpoint effort.

III) Employee-related issues

1. Employees may purposely slant the survey results — employees may purposely slant what they say in order to help a manager they like or hurt a manager they dislike. This may force managers to put more effort into being liked than being effective.
2. Evaluating things they never see — the more individuals included in the survey, the higher the probability that some participants will not have ever directly observed the behaviors or attitudes covered in the question. The broader the participation, the more likely that managers will feel that they are being evaluated by individuals who do not understand the nature of management work. In some cases, they may barely know the person involved. If global employees, shift workers, or remotely located workers are involved, the likelihood that employees will have to “guess” increases dramatically. Workers who are new to a manager may have little experience on which to base their opinions and new managers may be rated before they are well known.
3. Employees don’t know their manager’s job — because the employees do not have copies of the manager’s job description or performance goals, they may misunderstand what a manager should be doing and therefore mis-assess their manager.
4. Diverse employees and different generations are satisfied by different things — most improvement efforts rely on the principle that the same factors decrease 360° scores and that every improvement action has an equal positive impact on every employee. However, we know from generational and diversity research that attitudes and expectations about work and management styles differ dramatically among diverse employees. Asserting that “one size fits all” when it comes to the factors that cause low scores and the actions that will improve those scores is not defensible.
5. Unions resist it — unions often want to own and influence employees opinions, so union leaders often claim it is a tool to fool/distract the workers from their unhappiness.

Next week, Part 2: covering the remaining four problem categories including manager issues, issues related to the survey process, problems related to anonymity, potential administrative problems, and some final thoughts.