What's the difference between a performance review and 360-degree feedback?
The two methods differ in focus, structure, and purpose:
Performance review is a manager-led evaluation, typically conducted annually or biannually. It measures an employee's achievements against defined goals, KPIs, and responsibilities, often tied directly to promotions, compensation, and performance ratings.
360-degree feedback is a multi-rater assessment that collects input from managers, peers, direct reports, and sometimes clients. It focuses less on measurable results and more on behaviors, collaboration, leadership, and interpersonal skills.
In short - performance reviews are top-down, quantitative, and linked to rewards, while 360-degree feedback is peer-inclusive, qualitative, and focused on development.
Frequently Asked Questions (FAQs)
How do they differ in scope?
Performance reviews have a narrower scope, concentrating on role-specific objectives, deliverables, and measurable outcomes.
360-degree feedback has a broader scope, covering interpersonal effectiveness, team contribution, communication, and leadership potential.
How do they function differently in practice?
Performance Reviews - In a performance review, the manager begins by setting clear expectations for the employee.
The employee then works to deliver on these expectations over a set period. At the end of the cycle, the manager evaluates the employee's performance against the goals and responsibilities outlined.
The results of this evaluation typically influence important decisions such as pay adjustments, promotions, or role changes.
360-Degree Feedback - In contrast, a 360-degree feedback process is facilitated by HR and involves collecting anonymous feedback from multiple stakeholders, including peers, subordinates, and sometimes clients.
This feedback is aggregated and presented to the employee, not to make pay or promotion decisions, but to provide greater self-awareness and guide developmental planning.
The goal is to help employees understand how their behavior and performance are perceived across different relationships in the workplace.
Which is better suited for decision-making?
Performance reviews work best when the goal is to manage performance, stay compliant, and make pay or promotion decisions.
360-degree feedback is better suited for coaching employees, building future leaders, and shaping workplace culture.
Enterprises often use performance reviews for accountability and 360-degree feedback for growth.
What are the benefits of combining them?
Using both performance reviews and 360-degree feedback gives organizations a fuller picture:
Performance reviews highlight goal achievement and output.
360-degree feedback highlights how results are achieved, including collaboration, leadership style, and behavior.
Together, they,
Improve self-awareness for employees.
Support tailored training and coaching plans.
Reduce bias by balancing manager judgment with peer input.
Strengthen fairness and transparency in evaluations.
What challenges should HR consider when using both?
Time investment - 360 feedback requires coordination across multiple evaluators.
Bias - Both systems can be skewed by personal relationships or recent events.
Feedback quality - Constructiveness varies depending on the honesty and skill of reviewers.
Integration issues - If not clearly explained, employees may confuse developmental 360 feedback with evaluative performance reviews.
Clear communication, confidentiality, and training on giving feedback are essential for effectiveness.
When should HR use each method?
Use performance reviews for formal documentation, salary adjustments, and promotion decisions.
Use 360-degree feedback when developing leadership skills, improving team dynamics, or fostering a culture of collaboration.
Use both together in enterprises aiming for balance between accountability (reviews) and growth (feedback).
