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Organizations have most commonly utilized 360-degree feedback for developmental purposes, providing it to employees to assist them in developing work skills and behaviors. When 360-degree feedback is used for performance evaluation purposes, it is sometimes called a «360-degree review». There is a great deal of debate as to whether 360-degree feedback should be used exclusively for development purposes or for evaluation purposes as well. One of the earliest recorded uses of surveys to gather information about employees occurred in the 1950s at the Esso Research and Engineering Company. From there, the idea of 360 degree feedback gained momentum, and by the 1990s most human resources and organizational development professionals understood the concept.

However, due to the rise of the Internet and the ability to conduct evaluations online with surveys, multi-rater feedback use steadily increased in popularity. Outsourcing of human resources functions also has created a strong market for 360-degree feedback products from consultants. This has led to a proliferation of 360-degree feedback tools on the market. Today, studies suggest that over one-third of U. Many 360-degree feedback tools are not customized to the needs of the organizations in which they are used. 360-degree feedback is not equally useful in all types of organizations and with all types of jobs. 360-degree feedback programs in employment decisions because of problems with validity and reliability.

Still, these organizations continue to use multi-rater feedback in their development processes. A study on the patterns of rater accuracy shows that the length of time that a rater has known the individual being evaluated has the most significant effect on the accuracy of a 360-degree review. The study shows that subjects in the group «known for one to three years» are the most accurate, followed by those «known for less than one year,» followed by those «known for three to five years» and the least accurate dissertation those «known for more questionnaire five years. It has been suggested that multi-rater assessments often generate conflicting opinions and that there may be no way to determine whose feedback is accurate. Studies have also indicated that self-ratings are generally significantly higher than the ratings given from others.

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Several studies indicate that the use of 360-degree feedback helps to improve employee performance because it helps the evaluated see different perspectives of their performance. Some authors maintain, however, that there are too many lurking variables related to 360-degree evaluations to reliably generalize their effectiveness. Some researchers claim that the use of multi-rater assessment does not improve company performance. One 2001 study found that 360 degree feedback was associated with a 10. 6 percent decrease in market value, and concludes that «there is no data showing that actually improves productivity, increases retention, decreases grievances, or is superior to forced ranking and standard performance appraisal systems. They advise that although multi-rater feedback can be effectively used for appraisal, care needs to be taken in its implementation or results will be compromised.

The Ratings Game: Retooling 360s for Better Performance». Caution Required: Multirater Feedback in the Army». Speaking Out: The State Department Needs to Reevaluate Its Use of 360-Degree Reviews». Self-versus others’ ratings as predictors of assessment center ratings: Validation evidence for 360-degree feedback programs. The effects of scale type and demographics on upward feedback. Paper presented at the Society for Industrial and Organizational Society Annual Conference, May, San Francisco, CA. Should 360-degree feedback be used only for developmental purposes?

Greensboro, NC: Center for Creative Leadership. 360 degree feedback from another angle. Guidelines for multisource feedback when used for decision making. When does 360-degree Feedback create behavior change? And How would we know when it does?

Actionable feedback: Unlocking the power of learning and performance improvement. Rating formats and perceptions of performance appraisal fairness. Paper presented at the Society for Industrial and Organizational Psychology Annual Conference, April, New Orleans, LA. Feedback effectiveness: Can 360-degree appraisals be improved? The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. New York: AMACOM American Management Association.

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