Gaurav Jain was good at achieving targets, and his boss was pleased with him. But the way he went about achieving these goals was rubbing his team-mates the wrong way. Top management didn't know. Till one day, the company started doing 360-degree reviews-with a person's performance being rated by peers, juniors, everyone in any work relationship with him, not just his immediate boss. And the HR department discovered that Jain needed to brush up his people skills.

That's just one of the many cases involving 360-degree feedback that Ali Abbas, Country Manager (HR), AT&T India, has come across. Ever since 360-degree reviews first began in India, almost a decade ago, the concept has been trumpeted as a great tool, as a 'best practice', something that all good companies should have in place.

So it came as a rude shock when Watson Wyatt, an hr researcher, recently disclosed the results of an Asia-Pacific HCI Survey that showed what a farce the whole thing might have become.

Practice, Not Theory

Watson Wyatt's survey, designed to correlate shareholder value with effective people management, covered some 500 publicly listed companies across the Asia-Pacific region, including 119 from India. And the big result that glares out from the result sheets is this: 360-degree reviews could actually have a negative impact on a company's human resource effectiveness, and in turn, its shareholder value.

It's not such a big surprise to him, claims Atul Khosla, Associate Director, Watson Wyatt India. He has come across similar findings in Europe and North America earlier, and the reason is simple. The practice of 360-degree reviews often fails to live up to the theory. "Many Indian organisations are not mature enough to ensure its effective use," he elaborates.

So the question arises-is 360-degree feedback really worth all the effort?

To start with, 360-degree reviews often do not suit hierarchical or familial business structures, where employees are too scared to express themselves in any way that might anger anyone in authority. In such firms, the process ends up as just another meaningless ritual. Either that, or the system ends up in a mess because the company lacks team spirit and everyone's out to get the other.

According to Niroop Mahanty, VP (HRM), Tata Steel, extreme ratings are best ignored. Neither is it unusual for people to strike mutual back-scratching deals with one another. "We Indians don't know how to differentiate between the professional and the personal," sighs Mahanty, with an air of resignation. What's needed is an open culture, with a strong sense of collective mission and high confidence in the notion of team performance, characterised by a genuine appreciation of feedback.

Amongst those not surprised by the survey's findings is Santrupt Misra, Director (Corporate hr), Aditya Birla Group. In his view, it is crucial to know what you're using feedback for. "You may receive feedback on 35 dimensions," says Misra, "from which only six may be of any importance, but those 6 get lost under the noise. You need to customise what's important for you."

What's The Idea?

Some of the trouble seems to be that organisations don't have a specific purpose in mind for the use of 360-degree reviews as an hr tool. They do it because it's a 'best practice'. Not because they see it as a developmental tool, to help calibrate the rest of the hr department's programme. Or as an evaluative tool, to be used with all the maturity of a company that values what its people actually think.

Abbas feels better playing safe-using it as a purely developmental tool, so that even negative feedback is used only for coaching requirement assessments. Matangi GowriShankar, VP (OE), Cummins Group, agrees that 360-degree reviews should be used for appraisals only once an organisation is ready for it. But Mahanty has no qualms about using it for appraisals when necessary: "It gives me an overall picture of the guy I want to promote, and throws up any disturbing inconsistencies-so why wouldn't I use it?"

Well, it's true that wider viewspan reviews can form a more comprehensive picture of a person, and can even detect the varying leadership styles of managers long before they're actually tested in such positions. And if a person's batty, it shows up fast. Wipro's Pratik Kumar is firm that "there is no quarrel on the issue-if used well, 360-degree has a great impact". Wipro has been using it now for almost 10 years, and has no complaints. Of course, the company was primed for it, and the system was rolled down from the top in phases.

The companies covered in this report, mind you, are not a representative sample of all the companies out there trying to use 360-degree reviews. Most firms, as the survey showed, are getting it wrong. And as R. Sankar, Country Head, Mercer, puts it, "If you use 360-degree in a hierarchical organisation, it's like inviting a volcano to erupt."

Either way, like all tools, it should not be allowed to become a force unto itself. Organisations should stop fooling themselves and their employees, and start figuring out how to put that investment to good use.