Friday, 9 December 2011

Transparency Pays Off In 360-Degree Reviews

Abridged: Wall Street Journal, Joann S. Lubin

Like most executives, Sanjeev Nikore had managerial faults. But unlike most executives, he publicly divulged them to fellow staffers.

The result? A promotion.

Mr. Nikore, a senior corporate vice president at HCL Technologies Ltd., was among its 25 top leaders who went through performance evaluations known as "360-degree feedback" last year and shared the results company-wide via an internal website. Nearly 6,600 other managers at the global information-technology company did the same thing with employees who had graded them. 

HCL Technologies' Vice Chairman and CEO Vineet Nayar encourages his employees to be open about their faults. Here, he speaks with staff at the company's Noida, India headquarters.HCL Technologies' Vice Chairman and CEO Vineet Nayar encourages his employees to be open about their faults. Here, he speaks with staff at the company's Noida, India headquarters.

In these widely-used online feedback surveys, individuals get assessed by superiors, peers and subordinates about issues such as their ability to take charge, coach workers and manage conflict. Executives who reveal their 360-degree feedback typically do so just for their closest lieutenants. But frankness with staff about your appraisal can help your advancement – depending on how you handle it.

In Mr. Nikore's case, "I wasn't too good at delegating because I thought I knew the answers," he recalls. But the reviews opened his eyes and helped change his career trajectory.

Mr. Nikore took charge of consumer services worldwide in 2008, after previously running sales and marketing.

"Sanjeev and several fellow executives landed bigger roles because they achieved stronger results after quickly heeding colleagues' feedback on their leadership style," says Vineet Nayar, CEO of HCL and author of the book, "Employees First, Customers Second.'' HCL adopted this unusual approach in 2007.

A small but growing number of executives take transparency to a similar extreme by exposing their shortcomings.

A third of U.S. executives advised by Aon Hewitt Associates Inc. now "share their 360 results with direct reports," up from 20% a few years ago, estimates Jim Donohue, a principal in the consultancy's leadership and organization practice.

One company that encourages this tactic is Dell Inc. Disclosing 360-degree evaluations to peers "is considered a good management practice," a Dell spokesman says. CEO Michael Dell has shared his results, and the voluntary practice occurs "across all levels,'' the spokesman continues.

"More and more people are getting comfortable with that," as companies increasingly promote executives with a demonstrated ability to accept feedback and grow, says Stephen Miles, head of leadership consulting for recruiters Heidrick & Struggles International Inc.

For British executive Reginald Bull, revealing his 360-degree evaluation eased his integration into two Korean companies. He left Unilever PLC to become chief human resources officer of LG Electronics in 2008.

Addressing about 200 colleagues on his first day there, he displayed summary scores from his most recent Unilever 360 review.

The review ranked him "average" for the operational phase of projects because "once the factories turn on, I get bored," Mr. Bull remembers. But because his Korean associates excelled at running things and knew his weakness, "we were better able to divide the work most effectively."

The HR executive repeated the exercise with his six-member team shortly after he joined Doosan Corp., a diversified Korean concern, last spring. His tendency "to sometimes oversell a bit through passion" enabled Mr. Bull to obtain assistance from one manager about smart ways to sell ideas within a Korean business, he adds.

Opening the kimono about your professional weaknesses most likely will benefit your career when big bosses encourages candor – as Mr. Nikore discovered. At first, the executive resisted publicizing his faults. But Mr. Nayar, the CEO, "was very persuasive," Mr. Nikore says.

Mr. Nikore initially earned poor grades for his people skills. "I felt bad," he recollects. The score improved after he created a monthly employee recognition system and made new teams responsible for their results.

Transparency can also strengthen your subordinates' loyalty. Consider VSE Corp., a government contractor serving the Pentagon and other U.S. agencies. CEO Maurice "Mo" Gauthier insists that senior executives reveal their annual self assessments to their teams.

"I see only an upside in sharing my performance results," says Denise Manning, president of G&B Solutions, a VSE unit. She told her eight-person team that she failed to arrange one of four planned client visits with Mr. Gauthier last year. This year, however, she completed all four visits by September. "My team made it a priority to facilitate scheduling and making sure I made the goal," Ms. Manning says.

Team members made the extra effort because they consider Ms. Manning a collaborative leader, Mr. Gauthier points out. "They want her to succeed."

Even though professional-services firms value 360-degree feedback, "there are industries that care less, such as traditional manufacturing," cautions Ana Dutra, CEO of leadership and talent consulting for recruiters Korn/Ferry International.

And there are downsides to being too transparent about flaws. Employees may lose confidence -- or even exploit your weak spots.

"People get scared to realize leaders are fallible," observes David Selinger, a founder and CEO of Rich Relevance, a provider of e-commerce personalization services. To encourage a culture of openness, he says he informs his roughly 105 staffers about areas "where I fell down in the prior year" cited in his annual performance evaluation and outlines corrective steps. But the troops don't see the board's full critique of their leader.

Meanwhile, an executive of a drug maker saw his advancement recently stall after sharing 360-degree assessments with colleagues that twice criticized his inability to set good agendas. His meetings "went on and on," Mr. Donohue recalls. Aon Hewitt helped analyze the review results.

Several lieutenants took advantage of their knowledge about the executive's negative reviews – by keeping meetings brief. They soon won jobs at higher levels than their boss, according to Mr. Donohue. But no promotions loom for the executive. "He has reached his potential,'' the consultant says. 


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