What's the difference?
Appraisals are great for telling you whether you are hitting your targets and whether you should get a bonus or be fired. It’s where you assess if someone hits their sales targets, delivers software on time, and so on.
360 Feedback is useful for reviewing the wider "soft-skills" that make someone effective. It's difficult to measure whether someone is good at communication, working in a team, or leading one. Yet these are often the areas where someone can make the biggest impact on their performance.
So we use 360 Feedback as a way of reviewing these areas. Because different people will have different views on how well you lead (for example), it helps to get that feedback from a number of people in different positions.
The end-goal is to help the person being assessed to understand their strengths and areas for improvement, to then create a personal development plan, and ultimately to take action on the areas that need it the most.
Avoid using 360 Feedback scores in your appraisals...
We do not normally recommend using the specific scores received in a 360 feedback exercise as part of your formal performance appraisals.
This is because:
The scores given to a 360 Feedback questionnaire often have as much to do with the person providing feedback as the person receiving it. This may be due to personality, culture, their emotions on the day, or a combination of these factors. Fortunately, this doesn’t matter when you use the scores to *prioritize* areas that need improvement, and that's how our feedback reports are designed to be used. But it prevents a fair comparison.
Providing this score ultimately leads to managers and individuals overanalyzing the scores. We want teams and individuals to focus on their top priorities and what they're going to do about it. This is far more important than arguing over why a particular area is 0.3 points lower than an arbitrary target!
Over time, employees will start to game the system. To get a higher score, employees will give their friends higher scores in return for the same. The result? Less useful feedback reports.
... but DO include the Personal Development Plan!
While it doesn't make sense to use the feedback scores as an input into the appraisal, it does make sense to use the personal development plan as an input.
Employees should be achieving the goals they set in their personal development plan, and so part of the appraisal should review whether or not they have taken the actions they said they would, and whether they managed to achieve their goals.