How to Implement a 360-Degree Performance Appraisal in 15 Steps

A 360-degree performance appraisal system moves away from the traditional style of top-down feedback that flows from manager to employee. Instead, employees gain insights from several people they work closely with to offer a more comprehensive view of their performance.

This guide describes 15 detailed steps for setting up an effective 360-degree review system, which you can customize according to your organization’s needs.

1. Define objectives and goals

Start by considering “why” you wish to implement a 360-degree performance appraisal—what do you hope to achieve? Brainstorm some desired outcomes, such as:

• Improving individual or team performance
• Aligning with your training needs analysis
• Supporting HR decisions

Next, select your style of performance appraisal based on these goals:

• Developmental performance appraisals: This is a future-facing process that builds on the foundations of an employee’s skills and suggests ways to develop
• Evaluative performance appraisals: This administrative feedback style is reflective and explores how an employee has performed since the previous appraisal—managers link results to promotional opportunities, bonuses, or salary increases

It’s possible to use a combination of both developmental and evaluative performance appraisals.

For example, you reflect on recent performance to determine bonuses but provide an individual training plan to shape employees’ development as they progress within the organization.

2. Secure leadership buy-in and support

Your organization’s leaders are crucial in setting performance standards and aligning appraisals with business goals. The people at the top of your org chart can:

• Offer insights on organizational objectives
• Set performance standards
• Support HR decisions publicly

Tip: Obtain leadership buy-in by explaining how the new system benefits executives and their teams. Emphasize that this inclusive process delivers a holistic view of an employee’s performance, leading to more accurate feedback and development plans that add value to your business.

3. Choose the methodology for your 360 performance appraisals

Design your 360 performance process to match your company values and mission. Ask the following questions as you build your methodology:

How do you collect data?

360 performance appraisals rely on multi-source feedback from peers, managers, direct reports, self-assessments, and other third parties. Consider how you’ll gather and collate data from these people, perhaps using some of the following options:

• Employee surveys: Structured feedback surveys help collect data from many respondents
• Focus groups: These discussions explore themes, insights, and employee performance examples that might not emerge in surveys
• Interviews: One-on-one feedback sessions are the perfect setting for detailed and personalized feedback

Consider also the style of questions you’ll use in your data collection method:

• Competency-based questions focus on specific skills and behaviors—for example, “Rate the employee’s ability to manage projects effectively.”
• Goal-based questions assess the achievement of specific goals and objectives—for example, “To what extent has the employee met their performance targets for the last cycle?”
• Traditional performance evaluation questions include broader statements about overall performance—for example, “Summarize the employee’s performance over the last appraisal cycle.”

Should you collect anonymous or transparent feedback?

One of the most important aspects of collecting and distributing employee feedback is deciding whether it will be transparent feedback with names attached or anonymous feedback where employees may speak more freely. There are pros and cons to both:

• Transparent feedback encourages a culture of open communication—you build a trusting company culture where people freely share opinions without repercussions; however, not all employees may feel comfortable doing so
• Anonymous feedback can suggest that employees don’t generally feel safe expressing themselves, making it impossible to follow up on specific incidents if you can’t obtain more details; however, some employees will be more willing to offer honest feedback when you can’t easily identify them

Whatever feedback collection philosophy you choose, clarify it for your employees. It is unacceptable to promise anonymous feedback and then share these confidential responses with a broader audience.

Will you calibrate your performance appraisal system?

A well-structured performance appraisal system can be influenced by bias and inconsistency. One team’s manager may provide harsher feedback than another, which could be unfair if performance evaluations are linked to salary increases or career advancement opportunities.

Performance calibration levels the playing field by using a committee to standardize the evaluation process and weed out any biases.

Will you link your process to compensation and career progression?

Consider whether you plan to base these crucial HR decisions on the results of a performance appraisal. While a 360-degree model provides a range of input, Professor Jake Rosenfeld at Washington University argues in a Harvard Business Review article that it depends on three myths:

• You can fully separate your performance from the contributions of others: Employees’ contributions usually depend to some extent on the efforts of their team members
• Your job has an objective, agreed-upon definition of performance: Many companies don’t accurately communicate their core mission
• Paying for individual performance leads to positive organizational outcomes: Rosenfeld believes rewarding individual excellence causes an environment of competition, which can thwart overall productivity

4. Identify participants and feedback providers

Based on your chosen methodology, the next step is to define a set of criteria for selecting who will give and receive feedback. Here are some ideas:

• Peer nominations: You might allow employees to nominate a range of colleagues, managers, and leaders who they’d like to provide feedback about their performance
• Nomination refusals: Allow peers to refuse to offer feedback if they don’t feel comfortable or haven’t had much interaction with a feedback recipient in this cycle
• Nomination limits: Employees bombarded with multiple nomination requests may feel overwhelmed by the process—consider implementing limits for non-managers so the same person can only complete three peer reviews
• Nomination approvals: Design your nomination workflow—for example, do managers need to approve a nomination?

5. Develop feedback questionnaires and criteria

A standardized set of questions covering key performance areas will ensure consistent, valuable feedback. Do the following to create a meaningful selection:

Determine the number of questions

Decide how many questions to include in your feedback questionnaire and what type of questions they will be, such as multiple-choice, open-ended, or a mix.

As a rule of thumb, keep the number of questions below 20 to allow for enough depth in feedback without overwhelming the participants.

Formulate questions

Consider the purpose of each question and what information you hope to gather from it. Based on the questionnaire you’re building, define questions for the following categories:

• Self-review: Questions focus on team members reviewing their job performance and promoting self-awareness
• Manager feedback: Questions for managers relate to their direct reports’ job performance
• Team feedback: Questions where employees zoom in on their managers’ performance
• Peer feedback: Questions glean insights about colleague performances and working relationships

In all cases, keep the appraisal targeted by relating each question to a specific competency or goal.

Provide feedback criteria

Support your feedback-givers by describing the level of detail you expect in responses, including examples to guide them. This ensures participants provide effective feedback that is useful for the individual under evaluation.

Define rating scales

Qualitative feedback involves open-ended questions that allow feedback-givers to provide information and context in their answers. Quantitative data collection uses clear rating scales, such as:

• Likert scales: A five-point scale used to measure agreement or satisfaction level with a statement, such as Strongly Agree, Agree, Neither Agree or Disagree, Disagree, Strongly Disagree
• Numeric scales: A 1-10 scale used to measure aspects such as performance or behavior
• Behaviorally anchored rating scales: Uses statements to rate specific behaviors or skill sets, such as communication, teamwork, or leadership skills

6. Define the timeline of your appraisal cycle

Decide how often you’ll run performance appraisals, for example, annually or biannually, and the deadlines and milestones involved in each cycle.

Include dates for:

• First step: When should employees submit their self-evaluation? Example: 7 days after the cycle launch
• Peer nominations: When should employees nominate peers for feedback? Example: 3 days after launch
• Managers submit reviews: When should managers complete their direct reports’ evaluations? Example: 10 days after peer nominations
• Team members submit reviews for their managers: When should direct reports submit upward feedback? Example: 7 days after managers submit reviews
• Performance calibration occurs: When should a calibration committee meet to align ratings? Example: 5 days after team member reviews
• Managers share results with employees: When can managers discuss appraisal results and set follow-up activities with their direct reports? Example: 7 days after calibration
• Development planning: When can employees and managers agree on setting development goals and action plans? Example: 7 days after sharing results
• HR & development meetings: When can these key people and L&D teams meet to design organizational programs that address critical issues? Example: An ongoing activity based on appraisal insights

7. Prepare evaluation guidelines for reviewers

Reviewers must understand how to use your system to keep 360-degree performance appraisals consistent. Introducing clear guidelines and examples of positive or negative performance reduces subjectivity in the process.

For example, you might use a 9-box grid methodology to plot an employee’s potential on the horizontal axis against their performance on the vertical axis. This provides a visual representation of where an employee falls within the organization.

Our 9-box template offers detailed rating scales for assessing performance and potential. Here is a snippet of the 1-4 rating scale for performance evaluations:

8. Select a 360-degree feedback tool or platform to facilitate data collection and analysis

Manually collecting 360 feedback is time-consuming. Instead, opt for a dedicated tool designed to streamline the process. You’ll store all data centrally and customize your development tool to match your feedback cycle’s workflow.

When selecting the right 360-degree platform for your business, consider:

• Budget: Determine how much you can invest in a tool and compare the prices of different options—before committing, consider if the platform offers a free trial or demo
• Features: Identify your preferred functionality, such as customizable questionnaires, automated reminders, and real-time reporting
• Ease of use: Look for a user-friendly interface that’s intuitive for reviewers and employees
• Data security: Ensure the platform has robust security measures, such as encryption, to protect sensitive employee information
• Integration capabilities: Consider whether the platform integrates with your existing HR or internal communication tools
• Customer support: Understand how easily the software vendor will answer your queries—do they offer live chat, phone or email support, or access to a dedicated customer success team?
• Mobile accessibility: Check if the tool is available on mobile, tablets, and desktop

Deel Engage is an AI-powered people suite that enables you to manage performance, development, and training programs from a single platform. Learn how it checks all the above boxes.

9. Communicate the new review process and benefits to all employees

Strong, clear communication is the key to an effective 360-degree performance review process. Employees should easily understand:

• When they need to complete specific activities, and when they can expect their performance feedback results
• Who is responsible for each stage of the appraisal process
• What the process goals are—for example, to gather feedback on skills and behaviors, or to support personal and professional development, etc.
• How you will run your appraisal cycle—for example, using a survey or interview process
• How the appraisal results relate to decisions about compensation, rewards, and promotions
• How you will share their feedback; for example, if it’s anonymous or transparent, and how you’ll distribute the results in either case

Emphasize the benefits of participating in the assessment, such as the opportunity for personal and professional growth and the chance to contribute to the organization’s overall success.

10. Conduct training sessions for participants

Part of your communication can occur during tailored training sessions. Include:

• Examples of how to deliver positive and constructive feedback
• How to interpret and use results for developmental planning
• Explanations and examples of feedback bias
• Instructions for navigating your chosen feedback software tool
• Customized training journeys for managers and employees

11. Administer the feedback process and collect results

Following your prep work, launch your feedback cycle by working through the following steps:

• Providing access to your software and launching the new cycle
• Monitoring participation in the process
• Sending reminders before key deadlines; for example, nudging managers who have yet to submit appraisals for their direct reports
• Meeting with all team leaders to check in on the progress
• Offering regular support throughout the process; for example, creating a dedicated Slack channel to respond to incoming queries
• Repurposing and documenting answers to frequently asked questions to proactively address similar challenges in future cycles.

12. Analyze and interpret feedback results

Review the fresh data to identify trends, employees’ strengths, and opportunities for improvement. You might do so:

• Manually by matching feedback with individual competency profiles
• Automatically using your feedback tool’s built-in reporting capabilities or by populating feedback into a skills matrix at a team or organizational level.

13. Share the results with relevant stakeholders

Whatever your analysis method, the aim is to present and distribute the data in a way that’s easy for relevant stakeholders to understand. Do this at the following levels:

• Individual: Encourage team members to reflect on their received feedback and ask any questions
• Team: Share common feedback themes across the department and how you plan to respond to them; for example, if numerous team members receive constructive feedback about their interpersonal skills, consider offering training in this area
• Leadership and executive: Focus on strategic insights, such as any critical skill gaps that need plugging to achieve your organizational objectives

14. Plan for improvement and growth with workers

While effective performance feedback should incorporate insights about your employees’ positive behaviors and activities, the appraisal process also invites constructive feedback. Ensure managers book one-on-one meetings with their employees to integrate learning and performance management by turning feedback into actionable development plans.

Example: If an employee’s review highlights they struggled to organize task dependencies in a recent project, their manager can recommend specific project management training or coaching opportunities to improve in this area.

15. Evaluate your new 360 feedback appraisal system

Continuously monitor the effectiveness of your 360 feedback appraisal system to ensure it consistently helps you meet the goals you set in Step 1. You might use the following metrics as part of your evaluation:

• Employee pulse surveys: Collect quantitative and qualitative data about your employees’ experience of the performance appraisal system
• Stay and exit interviews: Use this data to check for any link between your appraisal process and retention or departure decisions; for example, if you notice a trend of people resigning after receiving low scores in their review or if high performers consistently mention the appraisal process as a positive factor in their decision to stay
• 360-degree feedback results: Track changes and trends in performance ratings over time to see if your system effectively identifies areas of strengths and development needs

Implement a 360-degree feedback process with Deel Engage

Deel Engage simplifies the 360 feedback process, offering a modern, innovative platform that enables HR teams to merge performance, learning, and development. Expect the following from Deel Engage:

• It gives managers and admins complete control over question types, visibility, anonymity settings, and more
• It collects, stores, and analyzes qualitative and quantitative insights about an employee’s performance
• It facilitates unbiased promotion decisions by creating meaningful pathways for career progression with our effective career development module
• It identifies existing skills gaps, using a skills matrix to develop an effective L&D program that strengthens your human capital
• It equips managers with advanced training and transforms them into inspirational coaches and mentors
• It offers the possibility to use AI to generate training courses at lightning speed to address skills gaps for all talent in your organization

Ready to maximize the value of your performance reviews with rich, multi-rater feedback? Book a free Deel demo today.