Why 360 performance reviews don’t fix anything

People hate performance reviews for many reasons – the office politics and bureaucracy involved, the weeks or even months the entire process takes, the inefficiency of the process and the potential bias introduced by only looking through a singular manager lens when it comes to evaluation.

What many companies still use today is known as the hierarchical performance review. This was actually created by the military after World War I and relies only on managers recording their opinions of staff. It’s really a very limited point of view and often introduces bias to the review process; in fact, 60% of a typical performance rating can be attributed to the idiosyncrasies of the manager.

Hierarchical reviews also don’t reflect how people currently work, which is in network models, in a cross-functional manner on teams through channels like Slack, Google and other online platforms.

For those who think 360-degree reviews are the answer, guess again. 360-degree reviews emerged in the 1930s, but all they really did was add more subjectivity to the process – everyone picks the people who will write good things about them, and management learns nothing new.

Here are other issues with 360-degree reviews:

• Cherry picking who will contribute to the 360 creates a popularity contest –this can cause conflict and unnecessary rivalry between colleagues, not to mention very inaccurate information included in the review.

• Data skews positive and lacks critical feedback because the recipient typically sees what is written which removes the ability for the writer to be fully honest about the employee’s shortcomings or what they need to improve their performance.

• Bias and subjectivity are introduced due to a small sample size: too few voices means the few voices included carry more weight and, again, are selected by the candidate based on who will say positive things about them.

• Time consuming: we’ve seen that the average person spends 52x more writing their self-reflection for their manager than the manager reads it, and managers spend similarly little time reading peer 360 reviews, because they know how biased and subjective they are.

• Stress and anxiety: knowing that multiple colleagues are evaluating one’s performance can create stress and anxiety for employees, which may affect morale and productivity.

• Most analytical data on employee performance is missing. We perform ONA (Organizational Network Analysis) for our clients, a technique to identify quiet contributors, toxic team members being shielded by their managers, and key influencers as seen by the people in your organization. By asking employees a few specific questions about who they go to for help and advice, who energizes or motivates them, who they are concerned about, etc., companies can quickly surface which team members are making the most impact on the company, and which are not. We learned from comparisons for clients that 90% of the critical/negative feedback you get from ONA is missed from 360s, and the numbers are almost as high for positive recognition as well.

All of this tells us that 360-reviews are not making things fairer or better than the outdated hierarchical performance review. To make the process smoother, more efficient, and fairer for everyone requires a rehaul of how it’s been done and that means stepping into the 21st century and introducing science and analytics to the process.

Related: Boosting employee performance management in a recession

ONA is a step in the right direction – in this process, every employee identifies who helps, advises, energizes, or motivates them, who they see as outstanding, and who they are concerned about, and they substantiate why they selected these people. This lets managers identify unusual outliers to keep it from being a popularity contest. With this data, executives can rank their entire organization from most influential to least, most problematic to least, and most outstanding to least as seen by the network, and know exactly why as seen by the network.

ONA-based reviews create a fairer playing field by ensuring performance reviews are based on larger sets of data rather than the opinions of a single manager, and it’s about time that the world wakes up to this new methodology as the future of performance management across the world.

David Murray, co-founder and president of Confirm