The Legal Environment for 360 Feedback

Many organizations rely on 360 Feedback to drive their strategic talent agendas. Even when 360 is purposed for development only, organizations are frequently reluctant to limit it to this use. The 360 data represent unique input that informs several talent management processes, from high-potential identification and promotion to performance management and succession planning. When 360 results are extended beyond development only and affect an employee’s status, however, a host of psychometric standards and legal requirements emerge. Highlighted is a series of considerations, beginning with design limitations as a decision-making tool (i.e., assessing performance while supporting development) and including score equivalence (across languages/cultures) and perceived fairness. After providing an overview of the legal framework of human resource decision-making, it is applied to the 360 Feedback process, including disparate impact, adverse impact, validation, and alternative selection procedures. The chapter concludes with recommendations for 360 practices, from design to implementation to use in making talent management decisions.

What Kind of Talent Do We Have Here?

This chapter describes a global pharmaceutical company that used 360 Feedback and other talent assessments to address critical strategic challenges in its business. The company collected behavioral data on approximately 400 sales leaders as part of a system-wide talent assessment that allowed a newly appointed leader to craft a talent strategy that would support his business strategy. By linking 360 Feedback data, personality assessments and sales results, the organization’s senior leadership team was able to critically examine its system-wide talent profile in the context of its ambitious commercial strategies. This system-wide profile was then used to shape short- and long-term plans for developing talent and shifting the culture at all levels to better align with business goals.

The Journey From Development to Appraisal

This case study describes an initiative to change a long-standing performance management process at a large manufacturing facility within General Mills that emphasized the attainment of objective performance measures (the “what” of performance) to one that also included the “how” of goal achievement. The organization embarked on a 3-year pilot evaluation of the use of 360 Feedback as a possible solution to replace or supplement their traditional single-source (supervisor) performance appraisal process. The two systems ran in parallel using 140 randomly selected employees. Results showed little correlation between the what measures of performance from the traditional appraisals and the how data collected using the 360 Feedback, supporting the view that job performance should be viewed as requiring both aspects of evaluation, using different methods of assessment. Ultimately, the organization maintained both systems but integrated 360 Feedback into the traditional appraisals as well, creating complementary processes that looked “forward” (development) and “past” (performance).

Rater Congruency

This chapter explores the meaning of, and implications for, differences in 360 Feedback ratings among individual raters (e.g., self, peers, direct reports). This chapter looks at possible causes and consequences for high and low agreement and why it is important. A detailed discussion of the history of rating difference research is followed by an analysis of these differences. This chapter addresses a number of issues related to congruity in feedback ratings: What is rater congruence? Why does it matter? Is it mainly due to people overrating themselves? What are the business implications for high or low congruence? What are the recommendations to increase it? The importance of self-other rating agreement in 360 Feedback is discussed.

Strategic 360 Feedback for Organization Development

This chapter focuses on the application of Strategic 360 Feedback specifically for large-scale organization development (OD) and change interventions. The emphasis is on (a) ways in which using data-based feedback for OD efforts is similar to and different from other applications and (b) the origins, evolution, and current state of the method as a key tool for OD practitioners. The chapter begins with an overview of the role and key differentiators of strategic 360 Feedback for OD and change-related interventions. Following a discussion of the importance of linking the process to a broader strategic organizational framework such as the Burke–Litwin model, case examples are provided for using 360 Feedback as either a transactional (managerial) or a transformational (leadership) lever for change. The chapter concludes with summary observations about the evolution and potential future of 360 Feedback for OD interventions, with an emphasis on trends in technology and the digitization of human resources.

What Is “Strategic 360 Feedback”?

Strategic 360 Feedback is defined as (a) having content derived from the organization’s strategy and values; (b) creating data that are sufficiently reliable and valid to be used for decision-making for talent management purposes; (c) being integrated into talent management, performance management, and development systems; and (d) being inclusive of all candidates for assessment. When these conditions are satisfied, Strategic 360 Feedback processes can create sustainable change in behaviors valued by the organization, create behavior change in key leaders, inform decisions integral to organization-wide talent management processes, and support the creation and maintenance of a feedback culture. All multirater processes should be developmental, and Strategic 360 Feedback in no way precludes its use for development purposes.

The Ethical Context of 360 Feedback

Ethical dilemmas originate when parties of interest interpret the basic charter of the 360 Feedback process differently. Open specifications, ambiguities, inappropriate assumptions, or simple misinterpretations of agreements over what information will or can be shared create dilemmas for the consulting psychologist. Individuals in different roles, including not only the participants but also the consulting psychologist and organizational sponsors, perceive the risks and rewards of 360 data differently. These different perspectives are contextually driven and have implications for the integrity of the Strategic 360 Feedback process and outcomes. By example and clarification of the ethical principles involved, this chapter identifies the potential challenges and difficult choices that face the internal or external consulting psychologist.

Using Analytics to Gain More Insights From 360 Feedback Data

Advanced analytical methodologies and data visualizations are transforming how human resource data are used in organizations. Through the application of these methods, 360 Feedback can be enhanced; conversely, a variety of talent management objectives can be enhanced by including 360 Feedback. This chapter discusses how analytics can help support organizations and individuals as they tackle these systematic questions. The chapter begins with an overview of major talent management functions (selection, promotion, learning and development, succession and workforce planning, analytics for measuring progress), showing how each can incorporate 360 Feedback data. Attention is devoted to multirater feedback as a target of inquiry itself, discussing how new analytic approaches (unstructured data, linkage analysis, network analysis, reporting, and visualization) can enhance traditional practice. We close with a discussion of key considerations about foundational issues such as data privacy.

Gender, Diversity, and 360 Feedback

This chapter examines the opportunities and challenges associated with using Strategic 360 Feedback to foster gender inclusiveness in organizations. Strategic 360 Feedback is an important transformational tool whose content must be derived from the organization’s strategy and values. It has the potential to create desired change in leader behaviors valued by organizations and supports the establishment of a feedback culture that creates awareness and accountability for such change. This chapter also examines the research evidence that shows how bias and stereotypical thinking may have a negative impact on 360 Feedback ratings of women’s leadership competencies and derailment potential by bosses and other raters. However, despite these challenges, recent research and practice in the areas of mentorship, allyship, and senior male champions for gender inclusiveness may offer strategies to decrease gender bias in measurements and demonstrate the support of top management to achieve inclusiveness in organizations.

Integrating Strategic 360 Feedback at a Financial Services Organization

This chapter describes a financial services organization that navigated the “Great Recession” while changing its leadership team and strategy. In support of this strategy, the organization worked with leaders to define a new organizational culture and competency model. The organization’s culture was in transition from complacency to rapid change. Employees were experiencing fear, distrust, and decision paralysis. The new competency model called for leaders to display courage and collaboration and to make timely decisions. To accelerate the desired cultural change and adoption of new leadership behaviors, the organization implemented a new 360 Feedback process based on the competency model. The 360 Feedback system was designed to be a powerful signal about the behaviors that were expected of leaders in support of the new organizational culture and strategy. This chapter focuses on the development, delivery, and evaluation of the 360 Feedback program and how it was embedded in talent management processes.