360 Degree Feedback Pros and Cons [All Business Sizes]

Tai
August 8, 2021
6 Min Read
Photo by
Daniel Bolyhos

Table of Contents:

What are 360 degree feedback pros and cons?

Ready to take your team evaluations to the next level? 360 degree feedback may be the way to do it, but before you start, have a good look at the pros and cons! 

360 feedback is a method of evaluating employees that encourages those being evaluated to look at themselves from the perspective of their supervisor, peers, subordinates and others. It includes peer review and upward feedback to provide a comprehensive evaluation of the individual being rated. The use of 360 degree feedback can provide valuable insight for employees and employers alike. It's important to responsibly weigh all the pros and cons of this method before deciding whether this is the right choice for your business.

The pros and cons of 360 degree performance appraisal are simply the advantages and disadvantages of using this method. Although many HR departments swear by multi rater assessments, it's not without its problems. Here we'll look at the primary pros and cons of 360 degree appraisal for small businesses, medium businesses, and large businesses.

Small businesses 360 degree feedback pros and cons

If you’ve got a small business, the benefits of 360 feedback review process include:

  • Cohesive work environments: Having everyone rate their coworkers on an assessment tells you exactly what issues are bubbling up in your team. You can't make improvements until you know where the problems are, and this allows for quick changes that can give a huge boost to employee performance and productivity.
  • Flexibility: Since everyone on a small team is likely to have a hand in their company's success, it's important to be able to offer them constructive feedback and the chance to improve. 360 degree feedback allows for customizing and tailoring based on who you're working with.
  • Satisfaction: Since more people get a say in their own evaluation, this can make for happier employees and increased satisfaction levels. High employee morale is wonderful in any organization, but when you've got a small team it's especially essential!

The biggest small business 360 degree feedback cons would be:

  • Time: There's a lot of time and effort involved in designing a suitable, administering, collecting and analyzing anonymous feedback. You have to ask your employees for their input, read through it all, analyze the data and consider coaching opportunities.
  • Room for error: The performance review method itself is very subjective - one person's take on a coworker could be vastly different from everyone else's. This increases the risk of skewed results for all involved.
  • Scaling: It's easy to let the momentum of an initial 360 degree feedback program fall by the wayside if you don't have a good system in place for keeping it up. Losing focus on this 360 performance review tool can lead to more issues within your company.

Medium businesses 360 degree feedback pros and cons

If you’ve grown past the small business class but can’t quite call yourself large yet, this is the category for you. Benefits of implementing 360 degree feedback are likely to include:

  • Improved communication: The ability to get different perspectives on everyone can improve communication. 360 degree feedback allows for employees to take a step back and reexamine how they communicate, which is important in every business setting.
  • Increased engagement: When employees receive direct feedback from their peers, it helps them feel more engaged. They're likely to take that multi-rater feedback and use it to better themselves, which improves teamwork and overall engagement levels throughout the company.
  • Increased productivity: When employees feel like they're working in a cohesive environment, their work is more likely to be productive. 360 degree feedback allows for increased productivity and higher quality work.
  • Critical thinking: Evaluations can help employees identify areas in which they can improve and communicate more effectively. Honest feedback can be essential in pointing out skill gaps so that employee development can be better targeted. After a 360 degree performance review, a team is typically better able to problem solve and think critically about how their behavior impacts other people.

Disadvantages for medium businesses could include:

  • Time: Similar to small businesses, there's a lot of time involved in designing, administering, collecting and analyzing feedback for this appraisal system. You have to ask your employees for their input, read through it all, analyze the data and consider coaching opportunities. Even if you outsource the process, there's still time spent on gathering data and analyzing what you've received.
  • Scaling: It can be difficult to keep up an initial 360 degree feedback program when it's scaled up. This makes it more likely for employees to not feel like giving input is worth their time, which in turn decreases participation levels.

Large businesses 360 degree feedback pros and cons

Large businesses are perhaps poised to reap the greatest benefits of 360 feedback, as a multi-rater feedback system can effectively mitigate some of the difficulties large businesses face: lack of recognition, appreciation, and engagement, face-in-the-crowd syndrome, and impersonality. Benefits of implementing a 360 assessment process include:

  • Different perspectives: Having people with different roles can give you a variety of fresh perspectives on your company's needs, leading to more accurate solutions. This also allows for more leadership opportunities.
  • Scalability: Since large companies are already used to scaling up processes, they're able to adjust 360 degree feedback to meet their company's specific needs in this regard.
  • Increased responsibility: This method of evaluating people takes some of the pressure off managers in terms of giving direct feedback. Instead, it creates a culture where people are held accountable for striving for self-development.

Large business 360 degree feedback cons would be:

  • Bias: Having so many people involved in the process makes it more likely that bias will seep into results, which could lead to faulty assumptions. Using a 360 feedback questionnaire without adequate vetting and review may also lead to biased feedback from unclear or leading questions. 
  • Lack of commitment: If the company doesn't have a clear plan for how to implement this 360 degree review feedback, it can lead to confusion. Without a good strategy in place, employees aren't likely to want to participate, which leads to decreased participation rates and flawed results.

Weighing 360 degree feedback pros and cons

If you are a small, medium or large business deciding whether or not to implement a 360 degree assessment program, this summary of pros and cons may be helpful. Go through and rate each one on a scale of importance for your organization, then go back and see where the numbers point. Remember, if you want to implement a 360 review in spite of some problematic 'cons' you may just need to tailor the survey for your company to ensure it meets all goals.

Whether or not you decide to go with a 360 degree feedback system, you may want to consider adding a continuous feedback dimension to your teams so they don't have to wait for the yearly feedback form to get employee recognition or constructive criticism. Something like the free Slack app Matter can help you build a feedback culture where constructive feedback is part of everyday life, and where leadership development and employee engagement help you meet your organizational goals.

360 degree feedback pros and cons are largely dependent on the company, the goals at hand, and how committed the organization is to the process. As long as your company takes these factors into consideration before diving in, they can be fit to your specific needs with no problem. By preparing for these pros and cons, you can begin to make small changes that will have big effects on your business.

Start Feedback Friday with Kudos, rewards, and feedback!
Free To Try. Easy Setup. No Credit Card Required.
Slack
Get started here!
Join Teams waitlist
Awwards cat
Awwards cat paws
Awwards ball purple
Awwards ball blue
More in
Performance & Feedback