Employee Performance Appraisal and Performance Management Practice Manual

Author: Zhao Wenming, Zhao Jianwei
Publisher:
Publish Date: 2005-09-01
Features: Section 3: How Enterprises Should Apply the 360-Degree Assessment Method
360-degree feedback is regarded as an excellent tool for employee performance assessment in many Western companies and has achieved considerable results in practice. In recent years, after this performance assessment tool was introduced into China, some domestic enterprises have also started adopting this method. However, some companies that invested heavily in the 360-degree assessment method saw minimal returns, or even adverse effects—straining the relationship between assessors and those being assessed, and bringing unfavorable consequences to the company. The 360-degree assessment method is more of an assessment philosophy than a mere assessment technique. Without understanding its underlying management principles, simply imitating specific operational techniques may lead to the phenomenon of "imitating the ugly to try to be beautiful." If others find it effective, it doesn’t necessarily mean it will work for you, and it may even have negative effects. Therefore, domestic companies must exercise extreme caution when introducing and implementing the 360-degree assessment method.
Practical experience has shown that the 360-degree assessment method can be an effective way for enterprises to assess the qualities and abilities of middle and senior management personnel. Among these, correct questionnaire design and assessment communication are key to the successful application of 360-degree performance feedback. Below, we illustrate how to properly design and use the 360-degree assessment method through an example.
### I. Case Background
The company is a leading high-tech enterprise group in China, primarily engaged in the distribution of electronic products, with its headquarters in Shenzhen and branches across the country. After years of experience, many of its sales staff were promoted to managerial positions. However, problems also arose. These young managers lacked management awareness and communication skills. Although promoted to managerial roles, they continued to use their old solo-selling methods—either neglecting their subordinates or controlling them too strictly, leaving no room for their subordinates to breathe. In the sales department, employee turnover began to quietly increase, dissatisfaction started to grow, and sales growth began to slow. There was a gap in sales personnel’s capabilities. Faced with this situation, the company’s top management increasingly recognized that it could not simply evaluate managers based on sales figures or a few simple financial indicators. Instead, more management methods should be introduced to help these sales managers improve their management skills and capabilities. Therefore, the company decided to introduce the 360-degree performance assessment method in its sales department.
To ensure that this 360-degree assessment achieved its intended goals and truly became an effective management tool for managers, the company’s management closely integrated the specifics of its business in the design, communication, and use of the questionnaire, while also referring to the experiences and lessons learned from enterprises in China and abroad in performance management (including 360-degree assessments).
### II. Solutions
#### 1. Clarifying the Assessment Objectives
At the outset of designing the assessment plan, the company clearly stated the objectives of this assessment: to provide personalized services for the capabilities and development of sales department managers. By providing them with individualized capability reports based on assessments from superiors, colleagues, subordinates, and themselves, the managers would understand their strengths and weaknesses and, based on this, develop themselves more effectively (especially in terms of management skills). Additionally, by assessing the capabilities of sales department managers, the company would gain a decision-making basis for the selection, appointment, and training of these managers, as well as alleviate the management oversight pressure on top-level executives. It was also emphasized that this assessment would not be linked to bonuses. If 360-degree assessments were tied to bonuses, it could lead to significant deviations in assessment results, undermining the original purpose of the assessment.
#### 2. Designing the Capability Model
Effective 360-degree feedback is inseparable from the effectiveness of the capability model. Many 360-degree assessments focus solely on employees’ behavioral performance, resulting in assessment results that lack systematicity, persuasiveness, and acceptance by employees. The company’s top management referred to the capability models of internationally renowned multinational companies and summarized the capabilities required for sales managers in Chinese electronic enterprises. These capabilities were primarily concentrated in three areas:
1) Professional Competence: The abilities necessary to ensure work quality, such as customer orientation, responsibility, and communication skills. Professional competence has relatively consistent requirements for managers in the company.
2) Business Competence: The abilities required to create high-value outputs, such as decision-making and logical thinking skills. Business competence varies depending on the nature of the management business.
3) Leadership Competence: The abilities to effectively manage subordinates as a manager, such as supporting subordinates’ work and influence. Leadership competence differs depending on the company’s corporate culture and the main management challenges it faces.
After establishing the basic framework of the capability model, it was also necessary to express the capability requirements in language that employees could accept. Internalizing these requirements is a complex task. The company used methods such as focus group interviews, observation of work behaviors, interviews with key leaders, and questionnaire analysis to tailor 20 capability requirements across four dimensions for each assessed position. While there were overlapping capability requirements between different positions, there were also specific requirements with different levels and meanings. The company’s management strove to describe each capability in the company’s own management language to make the capabilities measurable and actionable.
#### 3. Questionnaire Design
Industrial psychologists have conducted extensive research on the design of 360-degree assessment scoring systems and found that a well-designed scoring system is crucial for the reliability and accuracy of scores. Specifically, the design of the scoring system should have the following characteristics:
1) The scoring system should be simple and easy to understand. An appropriate scoring system is 5 levels. If it exceeds 7 levels, the assessment results may become chaotic and uncontrolled.
2) The language descriptions for scoring should be clear and specific, and consistent with the content being scored.
3) The logic of score progression should be clear, otherwise, scorers may tend to select only one or two score values, leading to a "central tendency effect" in the scoring results.
In our case, we determined that each capability would be evaluated on a 6-level scale, with each level having a clear definition: Level 1 represents exceptional performance, while the other 5 levels range from lowest to highest, allowing assessors to choose a score from the four perspectives (superior, colleague, subordinate, and self-assessment). Additionally, to gather more assessment information, the company designed open-ended questions in the questionnaire, asking assessors to evaluate the assessed person’s main strengths and weaknesses.
#### 4. Communication and Selection of Assessors
After finalizing the list of assessors, the company’s management conducted one-on-one interviews with the managers on the list to understand their work, capabilities, and perspectives on the company’s business development. Additionally, the company held one-on-one discussions with some subordinates of the assessed personnel to gather their views on the company’s business and their superiors. Before organizing the completion of the assessment questionnaires, the company’s management provided detailed explanations to the participants about the assessment plan and the completion of the questionnaires to ensure that assessors correctly understood the objectives of the assessment and the specific meanings of each question, and filled out the questionnaires truthfully.
#### 5. Statistical Analysis of Feedback Results
Through appropriate data processing, the company’s management not only obtained the scores for each assessed capability but also conducted horizontal and vertical comparisons of the scores to identify differences in perceptions of the same capability among different roles (self, superior, colleague, and subordinate). This allowed them to analyze the causes of the problems and identify the root of the issues in the management of the sales department.
#### 6. Accuracy of Assessment Results
Due to the well-designed questionnaire and reasonable operational process, the assessment results showed high accuracy and were highly recognized by the business department and employees. This provided a solid foundation for the company’s personnel utilization, training, and capability development. The general manager of the sales department, known for his focus on results and currently troubled by personnel issues, was particularly impressed by the assessment results. The results provided him with a comprehensive and clear overview of the job competency of each manager under his command—showing who was strong and who was weak, and in what areas. This was exactly the management information he had hoped to obtain.
#### 7. Solutions Based on Assessment Results
Accurately identifying problems is only the first step. After submitting the assessment reports, the company’s management immediately communicated the results of the assessment. The communication was conducted on a one-on-one basis, with each manager personally explaining the assessment results. At the same time, the company designed individualized capability development requirements for each manager and developed suitable management courses. To ensure that the behavior and capabilities of managers were truly improved, the company introduced a management capability coaching program—through close, targeted coaching and follow-up, to enhance the management skills of managers and help them address various management issues they encountered.
P.49-53