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An International Approach to 360-Degree Feedback

360-degree feedback has well and truly conquered the world. There’s no doubting that it offers advantages at both an individual and organisational level, but the system — dependent on self, subordinate, peer and management appraisals — is far from objective. With extensive research detailing the biases introduced by cultural perception, I think it’s time we took a frank look at the international implications for 360-degree feedback.

Power Distance and Leniency Bias

Two cultural factors have the greatest impact on the objectivity of appraisers; power distance and leniency bias.

A measure of the degree to which society accepts the uneven distribution of influence and authority, power distance (PDI) is very highly correlated with cultural attitudes. Societies with high PDI are hierarchical and expect a clear division between high status and low status individuals. By contrast, individuals from countries with a low PDI see few distinctions between position and function and value being included in the decision making process, regardless of their status.

Leniency bias describes the inflation of performance scores by individual appraisers. This reaction can stem from respect for the appraisee, self-preservation or a desire not to give offence.

Australia - Power distance infographic

Source: PDI Index

Cultural Differences

Individualism and collectivism can also impact rating accuracy. In collective cultures, the image of group harmony is essential. Communication is indirect and non-confrontational, and individuals actively avoid embarrassing others. In individual cultures, communication is typically more direct, and it is the responsibility of each person to protect their dignity and keep face.

Countries characterised by a high assertiveness (i.e., negative and positive communications are commonplace) experience very little leniency bias, and both peer and subordinate ratings closely match an individual’s assessment of their performance. Similarly, self and subordinate ratings are positively correlated in countries with a low PDI, which means 360-degree reviews are well suited to individualistic, assertive societies with low PDI.

North America

Highly assertive with a low PDI, individualistic Canada and the USA provide the optimum environment for this system. It is quite literally made for them.

In this environment, agreement between self and third party appraisals is indicative of high performance. Interestingly, comparisons with other Western cultures found that even though they had the same attributes (individualism, low PDI and assertiveness), the correlation between self and third party assessments was not as accurate for identifying high performers outside North America.

Southeast Asia

High PDI countries are known to suffer from leniency bias, with subordinates regularly overrating their managers. PDI also presents another problem, since requesting feedback from subordinates can be interpreted as a lack of knowledge on the part of a manager. Similarly, superiors are less likely to consider feedback from junior staff valid or useful.

Collectivism hinders the delivery of assessments, with confrontation and criticism actively avoided. Additionally, ambiguous communicative styles and a tendency to deliver subtle feedback has also been shown to reduce the efficiency of performance appraisals in these countries.

Japan

Displaying many aspects of a collective society, but highly competitive, Japan is caught somewhere between individualism and collectivism. Borderline hierarchical, it was an early adopter of the 360-degree review strategy.

Industry-based studies do suggest a leniency bias here, with individuals receiving the lowest scores from superiors. This phenomenon appears to be unique to Japan and is likely the result of a meritocratic system that promotes high performance.

Europe

In mainland Europe, performance reviews are often linked to pay and promotions, and self-evaluation is less common than in the US. Of course, the use of performance appraisals is highly varied. In France, for example, it is unusual for fixed-term workers to receive reviews, while in Germany men are often appraised more frequently than women.

Individualistic and assertive, most European cultures closely mirror that of North America and 360-degree reviews work well here. The UK was an early adopter of the approach, which has been widely used since the 1990s. UK-based studies have credited the system with improved management competencies and increased self-awareness. A 2006 international study cited leniency bias as a problem, with own performance usually underrated by appraisees. Interestingly, the authors also noted a general reluctance to complete surveys and submit feedback.

Germany performance appraisal infographic

Source: FedEE Global

In Practice

If managers fully understand the bias and cultural values influencing feedback, then 360-degree reviews are workable in any country. By avoiding comparisons of results across cultures, ensuring the rating scale has enough points for respondents to differentiate, and recognising which cultures are susceptible to leniency bias, leaders can accurately identify high performers and areas for development.

How to make feedback less stressful

Regular feedback is one of the most erowerful tools in improving the performance of employees. Recent numbers say 65% of employees want more feedback than they’re getting, with 98% of employees disengaging when managers give little or no feedback.

With numbers like these, there’s no question that regular, meaningful feedback is crucial to business success and employee satisfaction. What is less certain is how to help ensure managers actually give the feedback that delivers better performance and more engaged people.

The answer relates directly to stress. People actively avoid giving feedback because it’s so stressful. If we could remove or lessen that stress reaction, we’d all be much happier to give and receive feedback more often.

A recent webinar from Harvard Business Review: “Making Feedback Less Stressful” aims to do just that.


The best webinar on feedback I’ve ever seen

Whether you need to encourage your leaders to deliver feedback more often – or you’d like to improve your own skills, this SlideShare is a great resource (If you’re working specifically in this space, I suggest bookmarking this 146-slide pack). It’s the brainchild of Ed Batista – executive coach, change management consultant and course facilitator at Stanford University. Batista facilitates ‘Interpersonal Dynamics’ (or ‘Touchy Feely’ as it’s more commonly known), which is one of the most popular electives at the university.

If you’re short on time, let me help. In this article, I’m going to talk about the two most important things that I took away from Batista’s webinar on making feedback less stressful.

Takeaway one: Why is feedback typically so stressful?

Before looking at how to reduce the stress around feedback, we need to understand why it’s so uncomfortable. Batista doesn’t beat around the bush here: “Feedback is a social threat”, he says. Just like all threats, it causes physiological, emotional and cognitive responses. These include:

  • Increased heart rate
  • Heightened blood pressure
  • Anger, aggression, fear and anxiety
  • A negativity bias

Of course, it’s the person receiving the feedback that experiences these stress-inducing reactions. However, being the person giving the feedback and being responsible for such uncomfortable reactions is no picnic either.

Takeaway two: How you can personally make feedback less stressful

If you knew your feedback was going to be accepted gratefully and acted on every time, how would that affect your management behaviour? My guess is that you’d deliver feedback much more often.

In his presentation, Batista suggests two frameworks for delivering effective  feedback. Both of the frameworks focus on feelings – but from different perspectives:

Framework 1: A simple equation (that’s quick to remember)

This framework is an easy-to-remember equation that requires you to draw on your own feelings (as the feedback giver). If you link the feedback to an emotion you are feeling, it tends resonate more and have a longer-term impact

“When you [X], I feel [Y]”

[X] specifies a behaviour and clarifies what you’re talking about.

[Y] specifies an emotion, creating interest and influencing future behaviour.

For example: “David, when you keep making avoidable mistakes in these mark ups, I feel really frustrated.”

Framework 2: The SCARF model (for when you have more time to plan)

When you give feedback, you risk threatening five components of social situations: status, certainty, autonomy, relatedness and fairness.

Before you give feedback, consider the recipient’s thoughts and feelings – and reframe your feedback accordingly:

Status

Status is a person’s relative importance to others. If their status is threatened they will feel like they are being spoken down to, undermined or patronised.

How to reduce the status threat

Encourage people to give themselves feedback on their own performance:

“How do you think that went? How might you do it better next time?”

You may also want to give praise in public.

Certainty

Certainty concerns the future – and how predictable or secure it is. At its worst, threatened certainty may manifest as a fear of being demoted or even fired.

How to reduce the certainty threat

Establishing clear expectations is the best way to increase certainty. While expectations would generally be set prior to a task beginning, you can give feedback during the task to help reduce certainty threat:

“Remember, the ideal outcome here is…”

Autonomy 

If someone has autonomy, they have a sense of control over events and they have choices available to them. If feedback is seen as micro-managing, it will feel like choices are being taken away.

How to reduce the autonomy threat

As a threat to autonomy could feel like losing choices, the best way to avoid a negative reaction is to give choices as part of your feedback:

“Here are two options that might work, which do you prefer?”

Relatedness

Relatedness involves deciding whether someone is a friend or a foe. A healthy manager-employee relationship can be damaged if feedback threatens relatedness.

How to reduce the relatedness threat

Encouraging friendships is a good way to reduce this threat, especially if people work remotely. At the point of giving feedback however, you may want to try personally relating to the task at hand:

“I had to do this last week/last year and I struggled, try this next time it might help.”

Fairness

To evaluate whether feedback is fair or not, the recipient will look at the actions of other employees and the feedback given to them. It is important that your feedback is based on fact too – not an assumption or a generalisation.

How to reduce the fairness threat:

Make it clear that you are not treating one person differently to another:

“Like I just said to Sid…”

For more detail, check out ‘SCARF: a brain-based model for collaborating with and influencing others’ by David Rock – the creator of the SCARF model.

In conclusion…

Increasing the frequency of feedback is a sure-fire way to improve performance and engagement – both at the individual and team level.

However, telling your leaders to give feedback more often is only part of the story. Address the reason/s why people don’t naturally give feedback: complacency can be a problem, but the more probable reason is the uncomfortable stress reaction people often experience when both giving and receiving feedback.

Training everyone (including leaders) in the art of feedback is a great opportunity for companies wanting to step-up performance and deliver stronger results. I recommend using this webinar as a starting point. The great news is, everyone can learn to give better feedback more easily, with less stress for both the giver and the receiver.

Have you seen any other great resources on feedback? Let me know via Twitter: @cognology.

Jon Windust

Jon Windust is the CEO at Cognology – Talent management software for the future of work. Over 250 Australian businesses use Cognology to power cutting-edge talent strategy. You can follow Jon on Twitter or LinkedIn.

Yes, you. Even the board needs performance feedback.

The topic of performance management for boards came up in my recent Talent Management Talk with Tania Hannath. As we talk about in the short clip below, the performance management of boards is a positive, major trend that we’re seeing across both listed Australian corporates and the Not-For-Profit (NFP) sector.

In this article, I explore the growth of performance management at the board level in more detail. We start with a quick look at where this recent trend has come from, look at some hard data around the impacts, and briefly explore the similarities/differences in board-level performance management.

Why have businesses started evaluating boards?

In my opinion, there are three reasons why board-level performance management has seen such recent focus:

1. A change in requirements for ASX boards post-GFC

In July 2014, the ASX set out additional governance principles for ASX-listed companies. The first is the requirement for companies to report on how they are evaluating the performance of their boards.


2. A shift in the responsibilities of boards

An international review of corporate governance published in 2005 states:

“As boards are held increasingly accountable for corporate performance, they become more proactive in the leadership of the companies they govern.”

True to the report, in the decade since 2005, we have seen a profound shift in responsibility of boards from management support to organisational leadership. This change in organisational thinking means boards are now being held accountable for strategic direction, change management and formulating corporate objectives. This has two impacts on performance management:

1) It makes performance management for boards critically important, and
2) It gives us tangible, measurable performance indicators for board directors.


3.  The undeniable benefits of regular performance management at board level

Now we’re getting to the real heart of the matter – the ‘business case’ for board performance management:

  • The opportunity to track and improve the performance of every board function
  • The ability to prove performance to all stakeholders, which in turn:
    • Increases the trust of shareholders
    • Allows transparency for the government, employees and customers
  • Individual development and growth of directors

The verified impact of board-level performance management

An increasing number of studies are being conducted into the impact of board-level performance management. As you’ll see, the data makes a powerful case for why performance management at the board level is so important:

  • 72% of those who expected board members to participate in formal skills and knowledge development expected revenue to increase. (Perpetual Philanthropic Services, 2015)
  • High-performing boards spent seven days a year on performance management compared to four by low-performing boards. (McKinsey Quarterly Review, 2014)
  • The board activities most strongly correlated with organisational effectiveness include strategic planning and board development. (‘Board performance and organizational effectiveness in nonprofit social services organizations’, Green, JC and Griesinger, DW, 2006)
  • More than 80% of European and US institutional investors say they will pay more for companies with good governance. (Economist Intelligence Unit, 2001)

How does board-level performance management work?

Practically, performance management for boards is very similar to the process for everyone else in the organisation. Great performance management at every level is built on:

As I’ve said before on the topic of best-practice performance management:

“Top athletes, entrepreneurs and leading businesses all have one thing in common. They have goals and they succeed by regularly seeking feedback on their progress to achieving their goals. They use the feedback to adjust the things that aren’t working for them and to know what is working well. Winners are constantly looking for ways to improve.”

Notice how there’s no mention of ‘managers’ or ‘employees’ above. Best practice performance management is not necessarily ‘top down’, and it’s not just for tracking performance. At its core, performance management is about ongoing improvement. That’s a goal (and a process) that all high performers should actively buy into – regardless of if they’re in the graduate program or the boardroom.

In summary

It’s fantastic to see that performance management is achieving real traction at board level. As the data shows, performance management for the board as a whole and for individual directors brings great results for the organisation at all levels, and for shareholders and other stakeholders too.

If your organisation has implemented board-level performance management I’d love to hear about your experience. Reach out on Twitter via @cognology.

Australian managers, this is your 360 performance review

How is Australian management really performing?

There’s a lot of good reasons to do a 360 performance review. One of the most critical is to make sure you’re getting an accurate picture of the real situation (and not just one person’s view).

It’s common sense that any performance review that’s only based on one viewpoint has the potential to go badly wrong. (if you’re interested, we touch on the other reasons you should be using 360 reviews in our detailed guide to 360 performance reviews).

As we saw in our recent look at the state of middle management, it’s very possible for two groups of people to have a very different take on performance. To recap:

  • When you ask middle managers how they are performing, only 27% think middle management is underperforming.
  • However, when you ask senior managers, 64% rate the skills of middle management as “below average”.

This finding got us interested about whether there was such disagreement about the broader performance of Australian management.

A broader look at the performance of Australian management.

To get a 360 view of Australian management, we went looking for data from the top, the middle and the front line. One of the best resources we found comes from the Australian Institute of Management (AIM). AIM have been publishing an annual management capability index since 2012. To compile this capability index, AIM asks managers from 420 different companies to rate their organisation’s management performance (“how well is the organisation performing vs. the capability of management”).

To get a comprehensive review, we’ve integrated this data with Glassdoor for front-line employees. There’s more detail on the methodology and logic below.

Without further ado, here’s our 360 review on Australian management:

360 performance review chart

 

The view from the top: The CEO perspective on Australian management.

AIM’s Management Capability Index (AMCI for short) shows that the average CEO thinks their organisation is operating at 72% of management potential. This is a concerning figure from the leader of the organisation (who is ultimately responsible for the performance of management). On average, CEOs are saying that their management team is leaving nearly 30% of potential performance on the table! It’s a major performance gap!

If you have some time (and you’re a HR nerd like me), the underlying data makes for fascinating reading. It reveals that CEOs think that Australian management are worst at “Results and Comparative Performance” (68%) with “Visionary and Strategic Leadership” also performing poorly at just under 70%.

The view from the middle: What do senior managers and middle managers think about Australian management?

Ratings of management performance continue to fall as we move down the hierarchy. The AMCI shows that Level 2 and 3 managers feel their organisations are only operating at 65% and 58% of management potential respectively.

These ratings are a strong criticism of overall management performance. In plain English, level three managers are saying that they think their company’s management team are capable of performing at almost twice current output!

Again, this isn’t a uniform picture across the board. Every level of management picks different management weaknesses:

  • Level 2 managers are particularly critical of management performance on “Organisational Capability” (57%) and “Innovation” (just under 60%).
  • Level 3 managers are significantly more critical of management performance on “People Leadership” (just 50%) and “Application of Technology” (again 50%).

The view from the frontline: Employees’ thoughts on Australian management via Glassdoor.

The thoughts of employees are not far removed from the management capability index. We’re using Glassdoor as a proxy for how front-line employees think management is performing.

On Glassdoor, employees are asked to give the company and management a rating out of five. For the ASX 100, the average rating is 3.09 out of 5. On a percentage basis, that converts to just under 62%. For comparison, 62% sits comfortably between level 2 and level 3 managers.

(Obviously we’re making a few assumptions here around Glassdoor. Primarily, that reviews are most likely to come from frontline employees. And although Glassdoor isn’t specifically reviewing management capability, the numbers are closely in line with the AMCI. On this point, we think it’s not hard to believe that on both the AMCI and Glassdoor ratings are reflecting the broader gap all employees experience (to some degree) between expectation and reality in organisational performance.)

What does it all mean? The key takeaways

For me, this data points to four interesting takeaways to think further about:

  1. Everyone agrees that there’s a massive gap between Australian management’s potential and what’s actually being achieved right now. This is a major national problem and productivity issue.
  2. CEOs think that management is doing better than anyone else in the organisation. It appears that there’s a real communications failure from Australian CEOs in making sure the rest of the organisation shares their (relative) optimism around the current performance of the organisation and management team.
  3. Middle managers are a major problem area for Australian organisations (whichever way we look at it, as we showed in this previous article). The data here shows that middle management is increasingly jaded about the broader performance of management and leadership.
  4. And finally, an interesting takeaway with much broader implications: Glassdoor looks to be a surprisingly good proxy for management capability.

How do these results stack up with your management experience? Any key takeaways that you think I’ve missed from the data? Jump on the comments or reach me at @cognology on Twitter.

Crowdsourcing vs. 360 Degree Feedback (part 2)

In the last blog post I introduced the differences between Crowdsourcing vs. 360 Degree Feedback.  In this post we’ll look at some different needs and pick the best tool for the job.

If your need is any of these, 360 Degree Feedback is the best tool for the job
  • Identifying actual behaviors to develop as opposed to general needs.
  • Targeting the training budget to highly specific needs.
  • Providing the organisation with quantitative data and analysis.
  • Giving an individual a comparison to a benchmark.
  • Finding the gaps between how well a person knows themselves compared to how others see them.
  • Analysing a group of people for common strengths and areas needing development.

Crowdsourcing

Crowdsourcing is a great new tool for the manager’s toolbox.

If your need is any of these, Crowdsourcing is the best tool for the job
  • Getting feedback at a moments notice.
  • Obtaining general and open-ended feedback.
  • Feedback that is not prompted by set behavioural categories and questions.
  • Asking follow-up questions.
  • Asking for feedback from colleagues to support your performance review.
  • Getting ad-hoc feedback on team members to support their performance review.
  • Getting feedback on team members who you aren’t working directly with (for example, when team members are working in project teams).
  • Enabling people to discuss feedback together.

Crowdsourcing is a useful tool for getting feedback on ad-hoc things at a moments notice.  It has a much less formal feel and is very much in line with our social technology age.  For example, people can discuss the feedback together.  It doesn’t replace 360 Degree Feedback which is very effective at identifying highly specific behaviours where people can be developed.  But crowdsourcing is a great new addition to the toolbox that can simplify life for managers and HR.

Crowdsourcing vs. 360 Degree Feedback (part 1)

In a previous post I talked about my experience crowdsourcing for feedback.  It’s a much different experience to receiving 360 Degree Feedback.  It’s less formal for a start and you have total control over it.  Crowdsourcing has a number of advantages over 360 Degree Feedback.  Which begs the question, should 360 be consigned to the scrap heap?

Let’s start with a basic understanding of the two approaches.

360 Degree Feedback is an organised process where people receive feedback against a questionnaire.  The questionnaire is usually based around a set of competencies and behaviours.  For example, new leaders may receive feedback against a set of competencies and behaviors that define good leadership.  Responses are provided by a number of people who are invited to give feedback. To be able to provide good quality feedback, they need to know the person well.  You can read more about 360 Degree Feedback on our web site here and here.

Crowdsourcing is a less formal tool that you can use to go out to a wider group of respondents. For example, you might crowdsource using every person in a department as a potential respondent.  Unlike 360 Degree Feedback, there’s no expectation that every person in the group will respond.  You can initiate crowdsourcing as and when you like it.  Although you wouldn’t want to annoy people too frequently, crowdsourcing is suitable to use more than just once or twice a year.

Screenshot of crowdsourcing tool

There’s a big difference with the number of questions you ask with each tool.  With 360 Degree Feedback you might ask 60 highly specific questions. With crowdsourcing you might ask just one or two questions like “can you provide at least one suggestion where I can improve as a leader”.

In the second part of this blog post we’ll look at whether crowdsourcing or 360 Degree Feedback is the best tool for the job.  I’ll give some examples of different needs and pick a winner.

What it’s like to crowdsource for feedback

What had I gotten myself into?  I had crowdsourced for feedback using our new technology.  It should have been a pretty cool process.  Crowdsourcing is a thing of our times.  I should have been in for some amazing results.

The responses started coming in.  It was mostly what I already knew about myself, not earth shattering.  And then wallop, the one I wasn’t expecting.

This is an open account of what it’s like to crowdsource for feedback.  How it affected me and what happened as a result.

We recently added a crowdsourcing capability to our online system.  It lets you source feedback in a more informal way than tools like 360-degree feedback.  As part of our dogfooding process, I decided to use the crowdsourcing capability to get some feedback for myself.  I asked two simple questions:

  1. Can you suggest one thing I should get better at?
  2. What’s my best quality?

Most of the feedback was pretty standard sort of stuff.  What I already knew.  What I really wanted was a valuable nugget.  I wanted to find out something that I wasn’t aware of.  Something that if I changed, could really help me.  I wanted something that would make me more successful.  But instead I got a problem.

The ‘Hand of Faith’ gold nugget

 

The ‘Hand of Faith’ gold nugget 

I had put in place a new business process which was meant to be a massive improvement over our previous one.  After a few months of this process, it looked that way to me.  But the feedback was complaining about this new process.

As an advocate for feedback I couldn’t ignore it.  That would be hypocritical, saying one thing and doing another.  It’s bad practice when receiving feedback to argue against it.  So how could I now turn around and tell this person they were wrong?  How could they not see how great this new process was?

The night after I received the feedback I lost sleep.  Two or three hours.  Trying to work out how to handle the dilemma of wanting to be a model feedback recipient, but disagreeing with the feedback.

The next day I spoke with the person who gave me the feedback.  We didn’t see eye to eye on the key point.  Not the sort of thing you want to promote.

Fast forward a few months, what had I done about it?  Well, I can’t believe looking back that I actually lost sleep over it.  Once I got over the initial OMG response, I could see the feedback for what it was.  Rather than making a wholesale change to the new business process, I found myself accommodating the other person’s needs.  It just happened without me thinking too much about it.

And what is the result of doing that?  The result has been unbelievably positive.  There are better outcomes for me and everyone by adjusting to this feedback.  I am better off for it, not just a little bit, but a lot.  This did actually turn out to be one of the nuggets I was looking for.  I just couldn’t see it at the time because of my crazy emo response to the feedback.  Embarrassing to say, but it’s an open account nonetheless.