Mr X, a senior VP (SVP) in an Asian multinational, is a chartered accountant. He became SVP in that company at the age of 37. He has received six promotions in the last ten years and the average promotion rate in that company has always been more than three years. He is considered very sincere, meticulous, honest, hardworking, loyal, attentive to detail and highly analytical. He has saved a lot of money for the company, manages its collections well and is a prudent administrator.
However, no one liked to work with him. There are 30 executives and managers in his department, mostly postgraduates in commerce and some chartered accountants. Employees often complained that the SVP worked very hard, came in an hour or more early and expected everyone in the department to do the same, as well as to work late regularly. No mistakes ever escaped his attention, and upon detection he lost his temper and yelled at employees. Employees admitted that they did learn a lot while working with him, but had to pay a heavy price in terms of their peace of mind and psychological energy. No one dared to give him feedback as he was thought of highly by the top management and had been promoted rapidly over the years. His output and loyalty had always been unquestionably high. The average tenure of his junior staff was about six months and every year at least 50 per cent of the people who reported to him requested transfers or left the department. Most of the time, these departures were explained away as resulting from a high demand for chartered accountants and commerce graduates from outside the department. Only a few people internally knew the truth of the matter.
When the HR chief suggested to the SVP that a 360° feedback should be conducted, his response was:
You see how hard I work and how much I give to this company. And look at the employees you post in my department and their commitment to work. They can’t even stand hard work for a few days. Tell me who needs 360° feedback: them or me?
The HR chief convinced the SVP, nonetheless, and the latter attended a 360° feedback workshop. Through the 360° feedback process, he understood his strengths and weaknesses for the first time. While he was happy to see that his strengths were noticed and acknowledged by everyone, the discovery that his interpersonal competence was rated as extremely poor, and that teamwork within the department was bad and his juniors’ morale low, shook him. First, he found it very difficult to reconcile his department’s high regard for his abilities and the results he helped bring about, with the assertion that he was very poor at team work and at maintaining interpersonal relations. The question he asked during the workshop was: ‘How is it that I am delivering results year after year and getting promoted faster than anyone else, if my team work is poor and interpersonal competence low?’
Within a few days of the 360° feedback workshop, the SVP initiated a number of changes. Everyone noticed the change in him and he no longer behaved as formally as before. He stopped insisting that people come early or leave late, as long as they completed their work on time. Gradually, he also cultivated the practice of holding informal departmental meetings. In three months, the SVP had changed visibly. According to some of the juniors, ‘He smiles now, which he rarely ever did before, and we are no longer afraid to approach him.’ A couple of years later he was adjudged one of the best presidents of the company.
What is the cost of his smile? What are the benefits of smiling?
If 360° feedback can help you to become more aware of your strengths and weaknesses, what is the ROI?
A 360° feedback conducted with a proper tool costs about 5,000. Combined with a feedback workshop of two days (normally, 360° workshops are two to three days long and focus on leadership development), the exercise costs another 30,000 to 1 lakh for the top management, depending upon the institution that offers the workshop. Positing the cost of the SVP’s 360° feedback at 50,000, including the CTC for the two days of his attendance, travel costs, profiling costs and faculty fee, getting him to smile cost the company 50,000. The cost of his new-found humaneness is only 50,000.
The benefits Now, let us estimate the benefits of his smile. The following is the list of benefits:
Thus, with a 50,000 smile, you can win 10 lakh in return annually. These returns only keep multiplying.
Consider the benefits to a company if its CEO (whose strategic thinking is appreciated by the employees but whose communication skills are an issue) works hard to improve her/his communication skills and spreads the benefits of her/his strategic thinking to the rest of the company. Can we put a figure to the consequent development of five of her/his general managers as powerful strategic thinkers?
Similarly, another top-level manager of a company finds that contrary to her/his perception of herself/himself as a great delegator, her/his juniors do not think that she/he delegates adequately. On discovering this through 360° feedback, she/he begins to delegate more; as a result, a year later there is a saving of at least two hours of her/his time per day. This saved time can be utilized to help set up a new plant.
The need You are a manager and you are doing a good job of your assignments. Year after year, you are receiving your promotions on time, and are being appreciated for your work. Your organization, like many others, is recruiting newcomers, changing its systems and beginning to use new technology. Sometimes you feel that the younger generation is smarter, more hard-working and career-minded, and has little loyalty to the organization. You also feel that with a little support—which you are not getting—you can do a lot more work. You think you are a leader in your own way but you don’t know what others think of you. You share good relations with others and mind your job. But is that all you should be doing? How can you help take your organization into the future? Do people think that you have the ability to lead them? You know what your strengths are but you are not sure if your seniors, juniors and colleagues see your strengths the same way as you do. You are wondering how to find out. A 360° feedback exercise gives you the answers.
In recent years, 360° appraisals have become very popular because it has long been felt that one person’s assessment of another cannot be free of bias. In addition, with the focus on customers (both internal and external) and an emphasis on the softer dimensions of performance (leadership, innovation, team work, initiative, emotional intelligence, entrepreneurship, and so on) it has become necessary to get multiple assessments for more objectivity. A 360° appraisal is a multirater appraisal and feedback system. Almost every Fortune 500 company uses it in some form or the other. According to this system, the candidate is assessed periodically (once a year and sometimes even half-yearly) by a number of assessors, including her/his boss, immediate subordinates, colleagues, and internal and external customers. The assessment is based on a questionnaire specially designed to measure behaviours considered critical for performance. The appraisal is done anonymously by others and the assessment is collected by an external agent (for example, a consultant) or a specially designated internal agent (for example, the HRD department). The assessment is then consolidated, and feedback profiles are prepared and given to the participant after a workshop or directly by her/his boss or the HRD department at a performance review discussion session. Due to the innumerable variations possible in 360° feedback and appraisals, and its potency as a competency identification and development tool, it is important to understand the process and its dynamics.
The following are the objectives of MAFS:
The MAFS or 360° appraisal system has certain advantages. These advantages are additional to those of traditional appraisals. Normally, MAFS should be viewed as a supplement to the regular KPA- or KRA-based appraisal systems rather than as a replacement for them.
The additional advantages offered by MAFS are as follows:
A 360° feedback system can become a very sensitive issue. It can catch someone not prepared for it completely off-guard. It can also create certain new issues within the organization. If not designed and conducted well, it runs the potential risk of making the candidate develop wrong perceptions or notions about one or more of her/his assessors, and possibly developing negative attitudes towards them. It is therefore necessary and important to manage the process well and make it foolproof. The first important step is to determine if the organization is ready for it. The second important step is to determine if the candidate is ready for it. The following are the indicators of an organization’s readiness for MAFS:
The following are the indicators of a candidate’s readiness for MAFS:
TV Rao Learning Systems (TVRLS) has developed a model for top and senior management in India in terms of the required managerial and leadership competencies. It is called the roles, styles, delegation and qualities (RSDQ) model. This model views effective management and leadership as a combination of four sets of variables. These are:
It has been found that the developmental style is the most desired organization-building style. However, some individuals and situations require benevolent and critical styles. Research also shows that some managers are not aware of the predominant style they tend to use, and the effects it has on their employees.
The TVRLS instrument for 360° feedback for managerial and leadership development is based on the RSDQ model. In case of managerial qualities, there are about 75 activities identified under each of the roles just mentioned. An instrument (two versions—one consisting of 55 items for senior managers and another consisting of 75 items for top-level managers) has been developed to assess these measures and the extent to which the manager is perceived as performing these roles. In the case of leadership styles, a 51-item instrument assesses the extent to which the aforementioned styles are exhibited across 12 different situations or activities, and the impact the manager makes on her/his subordinates in terms of five variables: that is, feelings (dependence, incompetence, independence, interdependence, resentment, and so on), job satisfaction, work commitment, morale and extent of learning by the subordinates. Through this instrument, the participant comes to understand whether her/his style is benevolent, critical or developmental (dominant and back-up styles) and comprehends their impact.
The delegation questionnaire assesses the extent to which the participant is delegating, and releasing her/his own time for higher-level roles and tasks. The 10-item questionnaire measures the various symptoms of delegation or non-delegation. In case of behavioral qualities, 25 qualities are included at present using a semantic differential technique. Three open-ended questions at the end try to discover the most dominant strengths and weaknesses of the respondent, along with suggestions for improvement.
The instruments developed on the basis of the RSDQ model are updated periodically, according to the dimensions important to the top management roles/positions with changes in the business environment.
The 360° feedback instrument based on the RSDQ model is being used by a large number of Indian organizations, including the Aditya Birla Group, IL&FS, Gati Corporation, Mafatlal Group, Dr Reddy’s Laboratories, Wockhardt, Taj Group of Hotels, Tata Cummins, Titan Industries, Gati Cargo Management Services, Interra IT, Novell Software, Amway India, Bajaj Auto and State Bank of India. It is also being used in countries like Nigeria and Egypt by the Kewalram Chanrai Group and Alexandria Carbon Black. The main purpose of using the RSDQ model in these organizations has been to provide insights to top-level managers about others’ perceptions, and thempact they make in the organization due to the effectiveness with which they perform various managerial roles and practice certain leadership styles. The data generated gives them a basis to formulate relevant action plans.
Through various 360° feedback programmes for managerial roles and leadership styles for organizational effectiveness, TVRLS has gathered data from 4,000 top managers from over 150 different organizations. From the analysis of the feedback from over 40,000 assessors for these managers, certain observations about the leadership and managerial styles of top managers can be made.
In terms of managerial roles, managers score high on the following items:
The activities in which managers have a comparatively low rating are:
In terms of leadership styles, the following are the observations:
As already explained, the RSDQ model recognizes the extent of delegation as an important attribute of top managers. Of all the managers whose data was analysed, only 44 per cent were perceived to delegate adequately. Low delegation was mainly due to:
In terms of critical managerial and behavioural qualities, the strong points of managers were that they were:
Certain behavioural qualities were found to need improvement. Some managers needed to be:
This analysis is part of the ongoing research at TVRLS on the RSDQ model and the data generated by using it. The research projects undertaken are:
(a) correlation studies of 360° feedback data and (b) studies of the effectiveness of 360° feedback by surveying those who had received feedback after a year to assess the changes in their roles and styles.
TVRLS conducted a study of the effectiveness of 360° workshops in the late 1990s (Rao and Rao 2003). The line of inquiry was based on the information gathered regarding the impact of the workshop on people, changes observed as a result of the workshop, actions adopted towards change, further support, if any, required, and so on. The study covered 32 managers who had participated in the workshop. They were assessed through personal interviews and one-to-one discussions. TVRLS reported the following:
Of the 32 managers interviewed, only one individual had a negative experience despite his efforts to change his style. This individual’s open-ended feedback laid emphasis on his follow-up actions. His subordinates felt that they would be able to function better if he stopped breathing down their necks after assigning tasks to them. After the workshop, this person made efforts to reduce his follow-up activities. Unfortunately, his subordinates began to taking advantage of this and it resulted in them becoming more irregular in their work.
In another study at TVRLS using a mailed questionnaire, responses were sought on the following issues:
In addition, the participants were given a separate questionnaire to be distributed to their ’significant others’ to gain their perception on changes observed. Feedback was sought on:
The following were the most frequently mentioned changes in behaviour after the 360° feedback:
In terms of the impact on their unit/department/organization, the respondents felt that not only had they benefited from the feedback, the changes in them had increased motivation among their subordinates too. Also, increased sensitivity to their managerial and leadership roles had resulted in better working relationships and a more congenial work atmosphere. Most participants said that the changes were effected not just because the feedback came from people who knew them best at their workplace, but also because they were made aware of the differences between their self-perceptions and reality.
TVRLS experiences (feedback both during and after workshops) in the area of 360° feedback indicate the following (Rao and Rao 2003):
Rao and Rao (2003) have made some useful observations regarding how organizations planning to use 360° feedback could go about their intervention. Some useful lessons that can be drawn are:
Experiences at TVRLS corroborate that 360° feedback has a lot of potential as a change management programme. It is hoped that many corporations will harness this potential.
Some key issues faced in implementing a 360° feedback are as follows:
Many advocate that it should be used as a development tool alone, and should not be shared with the supervisor. But for Wipro, TVRLS decided that it should form part of the appraisal. A key element of the appraisal system is the development of the employee. At Wipro, it is believed that the supervisor and the employee are partners in the employee’s development, with clear responsibilities assigned to both. The Wipro leadership questionnaire (WLQ) survey therefore needs to be shared with the supervisor so that she/he can enable the employee’s development and also commit the resources necessary for it.
Initially, when managers were asked to give some names of the juniors they would sometimes give the names of those juniors across business units who were favourably inclined towards them. The junior was therefore re-termed as direct report. Where the actual direct reports were very few, TVRLS did not process the ‘junior’ part of the report to prevent direct identification.
In case of peers, the leader could select those among them with whom she/he had interacted regularly. But the supervisor needed to approve the list to prevent mutual back-scratching associations.
While peers have no fear of being victimized, there is a fear that candid feedback might adversely affect daily interactions. The greater fear is that, realizing this, many peers would not be honest enough with the feedback. Hence, TVRLS decided to keep it confidential.
Any editing may affect credibility. The following question may be raised: If this has been edited, then who knows what else may have been edited too? TVRLS decided to reproduce all comments verbatim even if a few comments hurt.
In a way, this becomes the reverse of the confidential report (CR) because the feedback from juniors is anonymous, but the supervisor’s supervisor reads her/his comments. There is a temptation for some of the reports to use this as a tool to get even with their bosses or, in some cases, compensate for their own inadequacy. That is why TVRLS gives the mathematical distribution of the rating. It helps to understand if one respondent has taken an extreme stand, either positive or negative.
It takes a lot of trust in an organization and a lot of preparation before one can move from using 360° feedback strictly for development purposes to using it to take decisions on promotions and rewards. Many companies are just not ready. The current literature on making 360° feedback an effective tool for performance and leadership-style reviews recommends the following:
In conclusion, it is important to note that 360° feedback can be a very significant behavioural intervention for ushering in a lasting change in Indian corporations that continue to be dominated by an autocratic top-down culture. Indian leadership at senior levels continues to demand obedience and gets it either through seductive or coercive means. Indian talent continues to flourish overseas or makes an unambiguous choice in favour of MNCs where a freer and more democratic climate prevails. The 360° feedback process, my experiences have led me to believe, helps top and senior leadership break away from the stiflingly hierarchical past, thereby developing competencies to attract and retain world-class talent so desperately needed to develop organizations with world-class standards.
360° feedback is one of the least expensive HRD interventions or growth tools that have been developed in recent times. Though the term 360° feedback came from the USA, the practice has been followed in India since antiquity. Kings used to go about in disguise to find out what their subjects or people thought of them, and adjusted their leadership styles according to the feedback they got. Sometimes, they used gudacharis (spies) to collect the impressions they were creating in the minds of their public. For example, in the Ramayana, Rama sends his wife Sita away, based on a spy report of a dhobi’s impressions of Rama. In the mid-1980s, a programme that I designed at IIMA attempted to systematically capture the perceptions of managerial staff. This went on to become a very popular methodology, and is now known as 360° feedback.
At TVRLS, a 360° profile is done for a teacher or a headmaster for as little as 2,000. For managers, it costs a maximum of 5,000 per profiling. This includes the cost of the questionnaires, and so on. On the Internet, there are sites that offer free tools. Any interested manager can get herself/himself assessed even without involving a consultant. The real costs of 360° feedback are not the consultancy costs but the time required by assessors to assess the candidate. Each person seeking feedback is to be assessed on an average by ten people—the R-COT will be the equivalent of about 10 hours’ time. If this is done as a part of an in-house workshop, add to this another eight hours. The total costs are as follows:
Profiling cost = 5,000
Workshop cost = 5,000 (normally, feedback is given after the first workshop on how to use or not use 360° feedback)
Travel and workshop cost if the feedback is outside the city = 10,000
Time investment by assessors (R-COT) = 10 hours
R-COT of the assessee who has to mail the questionnaires, attend a workshop to receive her/his feedback data and gain insights = 10 hours
R-COT for 20 hours = 20,000 (at a CTC of 20 lakh and 200 work hours)
Total cost per head = 20,000 direct costs + 20,000
R-COT = 40,000
This is a one-time cost and normally a lifetime cost, as once you go through a 360° workshop a second one is not required.
O-COT for the time spent by the candidate ranges between 80,000 for the IT sector and 2,00,000 (2 lakh) for the manufacturing sector. The ROI expected from 360° feedback for each candidate = 20,000 direct or fixed cost + 80,000 O-COT = 1 lakh in an IT company and more in others.
Table 6.1 illustrates the benefits of 360° feedback.
One of the managers to whom I happened to provide 360° feedback could have avoided hospitalization if only he had taken the feedback seriously. He is a hardworking, loyal, sincere and dynamic person. He takes his job seriously, plans his work well, monitors his juniors and their work, and is always available to them. However, he was considered a very serious and introverted person. He rarely interacted with his juniors at the informal level or even smiled at them. He received feedback that while he was admired by his juniors and everyone else for his work and sincerity, he would be better liked if he became a little more informal, had lunch with them, joked around and appeared to enjoy his work more. His family also concurred with this feedback. The manager showed some change for a few days, but soon reverted to his earlier ways. A year after the feedback, he had to be hospitalized for stress and was off work for several months because of his stress-related ailments.
TABLE 6.1 Benefits of 360° feedback
Issue | Possible benefits |
---|---|
What is the benefit of discovering your new talent? | You will apply it more and benefit the company and also build your career. Perhaps, your income will double in the next five years. Only 1% of this is the expense you have incurred on your 360° feedback. |
What is the benefit of finding out that you do not fully understand the expectations of your internal customers or your juniors, and that your wavelength is different from that of the company? | You meet your internal customers and get to know more about them. There is more communication with colleagues and therefore more respect. There is more integration, teamwork and respect from your internal customers. |
What is the benefit of discovering that you are not delegating work? | You start delegating more. This may release a lot of your time from routine work and lift up your level of operations in the company. You will have more competent and well-rounded juniors who admire you more. |
What is the benefit of discovering that you are a good leader, your juniors and seniors are happy with you, and that your leadership style is appropriate? | There is more self-confidence and more dynamism, and at least a 10% increase in your efficiency, motivation and morale. |
What is the benefit of discovering that your style becomes coercive when your juniors make mistakes and you lose your cool, and that this creates low morale and motivation problems in the company? | You alter your style as you become more sensitive. Subordinates are more adjusting. There is better management of mistakes in the department and higher learning from them. |
What is the benefit of discovering that you are not perceived as benchmarking with the best and that you need to be better-informed and get more world-class manufacturing practices into the company? | You study other practices, get wiser and introduce new practices. You come to be known as a leader and initiative-taker. The company gains from your interventions in terms of cost reduction, greater efficiency, and better quality of products and services. |
So do get your 360° profiling, but act on it too in order to reap the benefits.
On the other hand, 360° feedback also may have an emotional cost. Sometimes when people do not receive positive feedback or if someone is ultra-sensitive to negative feedback, the cost of the feedback is likely to be high, in terms of the candidate developing negativity and a vengeful attitude. Though such cases are rare, they cannot be ruled out. Beware of the costs if the seeker of the feedback is excessively defensive or is not ready to learn. 360° feedback is useful for learners. Hence it should not be used indiscriminately. The workshops prepare candidates for receiving the feedback and this is an important step.
Rao, T. V. and Rao, R. (eds), 2001, 360 Degree Feedback and Performance Management Systems, New Delhi: Excel.
———, 2003, The Power of 360 Degree Feedback, New Delhi: Response.