How 360 Feedback Drives Organizational Development

Measuring employees on critical job behaviors is essential for identifying performance improvement opportunities, driving better business outcomes, and aligning employee skills with company goals. One powerful tool for achieving this is 360 feedback achieves this by gathering confidential, anonymous evaluations from peers, direct reports, supervisors, and, when appropriate, customers.

Most organizations use 360 feedback first and foremost as a developmental tool for their people. While it builds self-awareness and professional growth, the same process can also advance broader organizational strategies. In this blog, we’ll explore how 360 feedback can strengthen four key organizational development initiatives.

How does 360 feedback impact organizational development?

1. Communicate skills employees need to align with business strategy

New and rapidly growing organizations often struggle to communicate and develop the infrastructure needed to reach their goals — specifically, the systems required to manage, develop, and reward their people. In this first example, I helped a fast-growing company add structure and discipline to its HR practices.

After helping them create an organization-wide leadership competency model for three levels of leaders, HR communicated the launch of the new models and provided information on how they were to be used. However, like many organizations, it was challenging to get attention and buy-in from leaders, so we developed a leadership 360 process that incorporated these new competencies. The goal was to give leaders an opportunity to experience the new competency model through the assessment and, at the same time, provide developmental feedback on their leadership skills.

Several positive outcomes were evident:

• The 360 process created immediate “buzz,” prompting leaders to review and discuss the new competency model.

• It communicated the exact skills and behaviors the organization values at each leadership level.

• Direct reports saw clear examples of effective leadership and identified skills to develop.

2. Develop new skills after organizational change

As organizations strive to become more customer-focused, competitive, and profitable, employees also need to evolve their capabilities. In this second example of working with a customer organization, they recognized that they were losing market share and needed to quickly change their sales model to become more competitive.

An analysis revealed that sales professionals were using outdated methods. To address this, the organization implemented:

• A Consultative Approach: Moving from relationship-based selling to understanding customer business challenges.

• Accountability Measures: Addressing the gap where sales leaders were not holding teams accountable for performance.

• New Competency Models: Revamped training paired with 360 assessments to evaluate behavioral shifts.

Ratings came from sales professionals (self), managers (based on their observations of customer calls), and customers.

The 360 feedback process served as a way for leaders to assess progress on the new behaviors, coach their people, and hold them accountable for using the new consultative selling approach. While most sales professionals were not pleased about having to change their approach, the 360 process gave them important feedback for their own transformation and the transformation of the sales team.

3. Improve team cohesion and performance

Teamwork is a critical aspect of organizational success and without a cohesive approach for addressing issues, teams will often stumble. In this third example, a large engineering team that was trying to improve cohesion as well as performance, and implemented a 360 feedback process to target and develop the behaviors needed for success. Aggregate results showed that their technical competencies were strong, but there were issues and inconsistencies in communication and “people” skills that were impacting the ability for the team to work together.

Leveraging the 360 results, the organization improved team dynamics through:

• Individual Debriefs: Identifying specific strengths and opportunities for every team member.

• Peer Coaching Models: Pairing members based on complementary strengths and development needs.

• Coach/Mentee Relationships: Facilitating direct peer-to-peer learning to reduce the burden on overstretched managers.

This approach was especially helpful to team leaders who were stretched by the number of people they had to manage and in roles where the risks associated with failure were more costly. The team also experienced improved relationships between team members and higher levels of overall engagement.

4. Assess impact of training and development initiatives

According to Training Magazine's Industry Report, US organizations spent a total of $98 billion on training. Unfortunately, many organizations have no idea if their training is making an impact. McKinsey Quarterly has noted that senior executives were concerned about the lack of metrics around their training initiatives, and this remains a major challenge.

One method for assessing whether training impacts actual on-the-job behaviors is to ask managers and other groups if trained behaviors are being exhibited. In this last example, a customer service organization developed a three-month training program to improve the professional skills of a key role in the organization. More than 220 participants went through an integrated curriculum of courses and on-the-job training tied to role competencies.

Before beginning the program, participants were evaluated through a baseline 180 feedback assessment (a form of 360 feedback that only includes the self and direct manager as raters), and then six months later a post-180 feedback assessment to see if the learned behaviors had been incorporated into their performance.

Differences in the ratings and comments on competencies provided feedback to the individual on the degree to which the new behaviors were evident. The organization found the 180 process valuable as aggregate reports demonstrated the impact of the training (change in baseline vs. post training 180 scores). Competencies that were generally more challenging for employees and required more focus were also identified (e.g., Business Analysis).

The assessment in this example also had several other benefits, including keeping training participants accountable for learning and applying skills and providing feedback to facilitators and curriculum designers on how to best modify their programs to maximize impact on employee behaviors.

In conclusion, these four examples underscore the strategic value of 360 feedback in driving organizational development. Whether it's used to define the capabilities essential for company success, support employees in upskilling and adapting to change, enhancing team cohesion, or assessing the effectiveness of training, 360 feedback proves to be much more than a tool for individual professional growth. It is a powerful resource for fostering organizational alignment and driving organizational progress.

Need help building an effective 360 feedback survey and acting on results?

An experienced listening partner like Perceptyx pairs science-backed 360 feedback with AI-assisted development planning to build stronger leaders. Our 360 feedback solution delivers the self-awareness managers need and the intelligent nudges that turn insight into action. By combining behavioral science with expert survey design, we help organizations pinpoint the behaviors that drive performance.

Whether you're looking to enhance manager effectiveness or build stronger teams, we provide the insights and features you need to create lasting positive change. Get in touch and let us show you how our research-backed approach can elevate your leadership development journey.