Inquiries about online performance reviews has jumped over the last few months.  That’s a good sign that companies are recognizing the need to provide employees feedback more frequently.

As part of these conversations I’ve seen a significant increase in requests for information about 360 degree evaluations, too.  That too is a good sign except for the fact that the reasons for the inquiry are based on the wrong reasons.

360 evaluations are not tests. Let me repeat that – 360 evaluations are not tests. Although employees are rated on performance, they weren’t designed for “testing” employees.  360 evaluations are tools developed to allow an individual to get feedback from bosses, peers, direct reports, and even customers about their performance. 

Unfortunately many organizations want to use 360 evaluations to grade employees. With a grade, a manager can promote or demote and increase or deny pay increases based on other people’s opinions.  Some companies even use the 360 to terminate employees if they fail to receive a minimum rating. In a sense, the success or failure of an employee is based oncrowdsourcing when the right 360 evaluation is not selected or it is used incorrectly.

When a company uses the 360 evaluation as a test, the result is almost always failure.  When properly used, individual potential can be realized and maximized. Performance can be improved. And productivity can be increased. New leaders can be developed. Struggling workers can be turned around or moved into positions and careers that are a better fit. When an employee does need to be terminated, departures are generally mutual and amicable.


When used as a test, 360s become no more than another inane corporate exercise.  The real purpose of a 360 evaluation is to provide feedback to an employee on his performance.  The employee then should be given an opportunity to improve his performance in the critical areas that his boss, peers, or direct reports deemed were inefficient, inefficent, or lacking. 

But when a 360 is turned into a test with a grade, the whole system is gamed.  When the purpose is not a catalyst for individual performance improvement  but punishment for mediocre performance, the individuals most likely to benefit from candid assessment are ignored.  Honest appraisal becomes murky and biased. Well-liked but underperforming individuals get what is called the halo effect.  Top performing but aggressive and individualistic employees get dissed. To be effective, raters should feel they have the freedom to be honest without determining the salary or “promotability” of the individual…and without retribution. That never happens when the future role and success of the target being evaluated is pinned to the 360 evaluation.

Watch for our next post – What You Need to Know Before Using 360 Evaluations.