Death to 360-Degree Performance Reviews

Please prove me wrong on this. I want to buy into the 360-degree performance review process, I really do. If I had been in the room when the idea for the 360-degree review was hatched, I probably would have jumped on the bandwagon.

In concept, 360 reviews seem to be the ideal solution to address one of the age-old problems with performance reviews: It’s difficult to capture the full picture of an employee’s performance and impact on the company. What better way to solve this than to involve HR, the employee, the manager, the employee’s direct reports, and any number of coworkers who interact with this person? More people filling out more forms has to be better, right?

Nice Idea, Not So Great After All

I say, wrong.

Here’s why:

1. The sheer burden of documentation required to do a 360 review calls into question the cost-benefit of such an approach.
2. Many of those involved in a person’s 360-degree review may not be qualified to assess the person in any or all of the categories.
3. Office politics and other personnel issues may skew a reviewer’s response unfairly, especially when it comes to peer-level reviews.
4. Most of what you ask people to rank with a number cannot actually be objectively scored on numeric skill. What, really, determines whether a person is a 4/5 or a 5/5 in communication skills?

The Death of Performance Reviews?

For a person whose job it is to make X number of widgets per day, it’s absolutely appropriate and possible to track and measure job performance against this well-defined benchmark. But most performance reviews also require rating the employee in more nebulous things like communication, efficiency, and motivation. Applying a 1-5 scale to categories like these is a well-intentioned attempt at quantifying something that is inherently difficult to quantify. But being well intentioned doesn’t mean it’s worth doing.

To some degree, all attempts at measuring performance suffer from this same problem. I’m picking on the 360 review because it requires the biggest investment of all performance review approaches, while only providing marginal additional benefits at best.

If 360 reviews are so problematic, should we stop doing performance reviews entirely? No, but it’s time to make some changes.

A Better Way Forward

All employers want to have productive, happy employees. If some form of performance review can help accomplish those goals, I’m all for it. I’m convinced the 360-degree review is not the best tool for most companies, however. And it turns out I’m not alone in this.

Instead of 360-degree performance reviews, I have 5 suggestions* for finding out how your employees are doing and for encouraging them to grow and improve:

1. If you only do one thing, do this: Change the focus (and even the name) of your performance reviews to be centered around the employee’s needs and happiness. We call our reviews “Check-Ins” and make it clear that the goal is to make sure our employees are happy and productive. Employees already know we want them to work hard and progress, and good employees want this too. Telling an employee we want to do a “Performance Review” sets the wrong tone. For many employees, “Performance Review” sounds a lot like saying “Let’s add up a bunch of numbers from a bunch of people, some of whom probably aren’t really qualified to judge you, and then we’ll see if you deserve to keep your job and maybe earn a bit more money.” Employee happiness is bound to dip downward at the thought of that.
2. Identify what can be objectively and accurately quantified and measured, and then track that. Don’t try to quantify or rank things that are largely subjective, like a person’s “motivation”. If an employee doesn’t seem motivated, ask them why. Figure out what the cause is and whether you and the employee can fix it together. Get rid of employees who can’t or won’t become motivated.
3. Ask the employee for feedback about the company, the office environment, and even about yourself as a manager. The message you’re sending in this moment is “we care what you think and how you feel.” In return, be candid and honest about anything the employee needs to change or do better. It’s demoralizing for employees to sense that there is something wrong but not be told about it.
4. For the things that can’t be accurately measured, do your best to make expectations clear and then have a frank and open conversation with the employee about these expectations to determine if progress is being made or if improvement is needed.
5. Do your check-ins at least semi-annually. Doing an annual check-in doesn’t really send the message that you care. It’s difficult to accurately remember things from a year ago, and the notes you took aren’t likely to capture things well enough to guide you. Ideally, do a more thorough semi-annual check-in and then do a few additional, informal check-ins along the way.

• Caveat: A huge part of HR is about risk mitigation. Some of that is necessary, but I believe too many HR professionals allow risk mitigation to obscure the greater goal of having happy and productive employees. Documentation is always a key component of risk mitigation so having extensive, defensible documentation from each performance review is part of what has led to the proliferation of formal review questionnaires and ranking scales. I recognize that my advice will make some people uncomfortable from this perspective. I think the benefits of an employee-first approach far outweigh the risks of moving away from a risk-mitigation-first approach. Document what you must, but don’t forget the real goal.