For those who are serious about improving their professional performance, asking for feedback and taking action on it is as vital as breathing. Those employees know that feedback is an essential ingredient for personal improvement, particularly for those who live and work in a complex, fast-paced market and work environment.
Considerable corporate time and resources are devoted to providing feedback to employees. In general, the vast majority of human resources professionals use the 360-degree competency assessment process as a primary means to provide feedback to employees regarding their performance. Employees, with the support of their managers, are expected to analyze this feedback to determine their strengths and weaknesses and to develop a plan to enhance their personal productivity and effectiveness. The process has become so widespread that its power to shape positive behaviors is accepted as fact. Legions of consulting organizations are willing to assist in devising competencies and generating feedback reports. But does the considerable time and investment devoted to this feedback process actually deliver a significant return? Do the reports and discussions with managers actually improve performance?
The issues involved with the 360-degree assessment include the determination of competencies, interpretation of results and subsequent efforts to use the data to create development plans. There are simpler, more cost-effective and more powerful methods for providing feedback that are more likely to improve individual and organization performance.
Validity: Determining the Right Competencies
To achieve statistical validity and ensure that the targeted competencies positively impact performance, managers must first identify the most competent employees. Then, they can pinpoint the specific knowledge, skills and abilities of these individuals that account for their higher performance. Establishing the validity of this data requires rigorous collection of job-specific behaviors and comparisons between highly and less productive employees. Further, focus groups, expert panels, behavioral interviews and psychological tests are often used to confirm that the right competencies have indeed been identified.
Because validating competencies is expensive and time-consuming, most human resources professionals avoid this expense by selecting a number of competencies from pre-established lists. Alternatively, they may decide to develop a competency list through the use of focus groups of senior organizational leaders. Such lists may or may not identify the competencies that lead to outstanding performance.
Applying a short list of competencies to all employees or to broad job categories could simplify the feedback process, reduce the upfront expenses and support a common set of values and norms. Also, learning efforts may be more efficient when focused around a narrow set of topics. Though a short list of competencies for an entire organization can support working together more effectively, the compromised list is less likely to identify the feedback that is needed to improve specific job performance of each individual. The effectiveness of this approach is therefore significantly diminished.
Focus On the Job
Most jobs require an array of competencies, which are usually defined from the perspective of individual managers. But flatter organizational structures and greater use of cross-functional teams require groups of people to perform in ambiguous and free-flowing situations. Knowing how employees should and do perform in specific group or project situations may be more important than knowing how they perform as individual contributors. The utilization of a unique combination of skills and personalities within a larger, constantly shifting structure determines organizational performance. A competency that is viewed as effective within the context of an individual job may be ineffective in a team environment. The general competency approach may not distinguish between these two work requirements.
The Assessment Part of the Process
In the usual 360-degree competency assessment, co-workers and managers are given a list of competencies and a set of behavioral anchors for each to use in evaluating individual employee performance. They are then asked to check their level of agreement or the frequency with which the employee must use each competency to perform in an excellent manner. Two clear issues emerge with this method of assessment. Generally, five to eight people are asked to make the assessment. As a result of the small sample size, one or two answers will have a significant impact on the averaged score for that item. Further, because relatively few people write in the comment sections on the form to clarify and further describe the behaviors they have observed and the rationale for their ratings, it is difficult to specify the context in which they expect a particular competency to be exhibited. Thus, the numerical score is likely an insufficient indicator of the behaviors that are expected to lead to desired employee performance.
Interpretation of Results
Most people are content with their performance of competencies where feedback suggests they are performing in the average to above-average ranges with respect to their peer group. However, feeling content with an average score on a critical competency may be an ineffective strategy for driving sought-after performance.
In their book “The Extraordinary Leader,” authors John Zenger and Joe Folkman, Ph.D., demonstrate empirically that the best leaders possess a few truly outstanding competencies. Leaders whose competency scores fall completely in the average range are perceived to be only 34 percent effective. Those with one strength above average are perceived to be 64 percent effective. Those with three strengths above average are perceived to be 80 percent effective.
The purpose of competency assessment should be to pinpoint and develop those few critical competencies that yield extraordinary and disproportionate performance. This is a more effective development strategy than shoring up less important competencies so that they are all perceived to be in at least the average range.
Managers are expected to work with employees to develop approaches to improve targeted competencies, but few managers have the expertise to actually develop such a plan. For example, managers have difficulty effectively differentiating those skills that can be taught from innate abilities that are less likely to be improved with development activities. Trying to improve what are viewed as innate abilities is likely to frustrate employees.
Employees are more likely to improve their performance by practicing new behaviors in a work environment that allows room for experimentation and offers specific, timely and helpful feedback. Unfortunately few managers today believe they can allow employees to focus on anything other than immediate work issues. Without management support, employees are likely to revert to old behaviors. In such situations, performance feedback will have only a momentary impact on employee performance.
On its face, the competency assessment process appears logical and relatively easy to administer. In reality, the process falls short of the goal of improving individual and organization performance. Two alternate approaches are far more effective: providing direct feedback and using leadership tools that are simple to learn and proven to have bottom-line impact. The direct-feedback approach actively involves the employee and all critical stakeholders in the improvement process. The leader’s toolbox approach skips the diagnostic assessment completely and instead provides a common language for leadership at all levels, as well as many management and leadership tools to more directly achieve bottom-line improvement.
In the traditional 360-degree competency approach, employee feedback remains confidential, presumably to encourage honest responses. Major stakeholders, such as peers and associates, have little involvement in the individual’s performance improvement beyond providing the initial assessment. This limited responsibility causes several problems. First, most organizational performance requires people to work together to make things happen. Even when one person improves his or her performance, the group may not perform better. More importantly, significant behavior change takes time and encouragement. Colleagues who are accustomed to an individual’s on-the-job behaviors may not notice an improvement in performance or provide the necessary encouragement to sustain the improved on-the-job behaviors.
Marshall Goldsmith and Howard Morgan studied more than 86,000 people for their article, “Leadership is a Contact Sport: The ‘Follow-up Factor’ in Management Development,” in Strategy+Business (September 2004). They state that the most critical factor in achieving positive long-term improvement is consistent, ongoing interaction and follow-up with colleagues. Dramatic performance improvement did not result from the assessment itself, but from the mutual discussion about development priorities with co-workers over time. Individuals who did not have the benefit of ongoing dialogue “showed improvement that barely exceeded random chance.” Creating direct and frequent dialogue about performance has far greater impact than simply assessing behavior.
Within the direct feedback approach, the role of human resources professionals shifts from providing assessments to teaching people how to ask for and receive feedback. They train managers and internal coaches to help employees process feedback information and to create effective development plans. In this approach, responsibility for performance improvement shifts from the human resources professionals to managers and employees. Direct feedback creates opportunities for honest dialogue between people and provides the impetus for them to work closely and effectively with one another.
Many excellent leadership tools are described in great detail in business books and articles, but few of these tools are actually adopted in practice. It is more effective to encourage leaders at all organization levels to use a common leadership language and to employ processes and tools that can be applied to a broad range of organization challenges. Teaching leaders how to develop organization and functional strategies, engage critical stakeholders and coach employees in their improvement processes will more likely lead to successful implementation of large-scale organizational change.
When leaders at all levels realize they face common obstacles to success, they are then more likely to open themselves to learning and personal growth. Learning and sound leadership practices address an organization’s performance needs for the long run. When using the toolbox methodology, the role of the human resources professional shifts from delivering individual assessments to determining the leadership language and processes that will have greatest impact on the organization’s success. The human resources professional works closely with senior management to create practice fields in which to apply new learning to real, ongoing business issues. Creating a direct relationship between learning and organizational performance shifts responsibility for learning, thinking and development to senior leaders, where it rightly belongs.
Suggestions for the 360-Degree Approach
If you do decide to use the competency approach, consider the following suggestions:
- Undertake the rigorous process of defining those few behaviors that truly make a difference to organization’s success. Avoid selecting competencies from a pre-established list.
- Identify your organization’s core organization competencies, which Gary Hamel and C.K. Prahalad define as the integration of skills, technologies and knowledge across the organization that provides disproportionate competitive advantage. Critical core competencies are difficult for competitors to emulate and are perceived by customers as delivering significant value. The contributions of employees toward shaping the organization’s core competence can then become a significant determinant of critical individual competencies.
- Rather than expecting employees to fill out a standard competency questionnaire, teach employees how to actively participate in the process of defining critical competencies. Ask them to be precise, to describe in detail the specific behaviors that support their conclusions. Tell them how to avoid such common evaluation problems as the halo and devil effects.
- Provide development opportunities that will support employees’ strengths. Focus only on those areas of weakness that will make a significant difference to effective performance on the job.
Ralph Jacobson is a principal of The Leader’s Toolbox, author of “Leading for a Change: How to Master the Five Challenges Faced by Every Leader” and faculty member at the Physician’s Leadership College, University of St. Thomas. He can be reached at email@example.com.