Making 360-Degree Feedback Effective

Organizational performance is of paramount importance in today’s competitive business world. To prosper and grow, organizations need constant improvement in their performance. This implies performance management and performance appraisal play an essential role in improving organizational performance. Managers have been exploring ways to improve the efficacy of performance appraisal and there is a growing use of 360-degree feedback. This paper attempts to review from the literature the key basic concepts of 360-degree feedback including its purposes as well as potential benefits and problems, discussion on related critical issues in a comprehensive manner. Several major issues are: (1) the number of rater sources that should be included, (2) how feedback should be used, (3) whether ratings should remain anonymous, (4) whether feedback is effective, (5) the reliability issue, and (6) whether it is easy to implement such a system in Hong Kong. Concluding remarks and direction for future research will be provided in the last part.