A 360-degree performance appraisal is an employee evaluation tool that includes feedback from a supervisor, subordinates, colleagues and customers. The purpose is to create a broader view of the employee's performance based on the impact of relationships with key stakeholders, according to an article by Terri Linman posted on San Diego State University's website.
The supervisor's assessment is similar to a top-down evaluation. The manager shares feedback on the employee's performance toward work goals and development of skills, notes Linman. For a manager, feedback from subordinates is helpful in recognizing strengths and weaknesses in leading and motivating workers. Colleagues can share insights on whether an employee is a team player or whether the worker is performing up to department standards. Input from customers or clients is especially useful in a customer-centric organization. If customers are not satisfied, the employee may need additional training or strategies.
The primary benefit of the 360-degree appraisal is its rounded perspective on the employee's performance. It minimizes the potential of a biased evaluation from a single supervisor. Steve Taylor for the Society for Human Resource Management notes that 360-degree appraisals may cause morale problems if poorly managed. When a company ties compensation and promotions to this type of appraisal system, risks include team conflict and misplaced goals. One strategy is to simply use it for feedback and communication purposes.