Rating Game

Multiple reviews give you a well-rounded picture of employee performance.

A decade ago, "multirater" performance feedback for employees was a fad found in just a handful of businesses. Today, "it's used by over half the Fortune 500," says Susan Gebelein, a senior vice president at Minneapolis-based Personnel Decisions International, a creator of staff development tools. That makes multirater feedback--where employees get formal insights on their performance from multiple sources such as peers, their subordinates and their boss--the hottest human resources trend around. The question is, Why is it so rapidly replacing the traditional boss-to-subordinate, one-way performance feedback model that has prevailed for generations?

Simple, says Mick Mount, chairman of the Department of Management and Organization at the University of Iowa in Iowa City: "We have come to recognize the boss does not know all the answers. Certainly, the boss's perspective is valuable, but is it the only one? When we supplement it with the perspectives of others, we are much more likely to get a comprehensive picture of a person's performance."

In the smallest businesses, boss-to-subordinate performance feedback may be all that's needed to jump-start a worker's output. When there are only two to four employees, the boss may have ample insight into how an employee deals not only with him or her but also with co-workers.

But as a business grows, the boss can't see the whole picture. Some employees are skilled at giving the boss exactly what he or she wants but drop the ball when dealing with co-workers. Others are esteemed by co-workers but little noticed by the boss. Either way, boss-to-subordinate evaluations provide a very limited point of view--and that's where multirater feedback comes in.

In addition to the boss's perspective, ratings are given by a minimum of three co-workers, says Bruce Knudson, owner of Cape Coral, Florida-based Positive Directions Inc., a consulting firm specializing in customer and employee retention. If the rated employee has subordinates, at least three of them should be involved, too. Why use so many raters? A diversity of voices helps to preserve anonymity, meaning workers are more apt to be honest.

Another plus of instituting multirater feedback: Few bosses enjoy doing one-on-one evaluations, and, often, they simply neglect doing them. The multirater system means the burden is shared, making it much more likely to produce valid results that benefit the employee and the business.

Will workers welcome the new system? "They are very receptive--that's what we have found in most organizations," says Gebelein. "In businesses where there has been a history of mistrust and antagonism, we occasionally find workers who mistrust the process at first. Even there, though, confidence in multi-rater feedback grows over time."

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This article was originally published in the December 1996 print edition of Entrepreneur with the headline: Rating Game.

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