360 degree feedback (or multi-rater feedback) processes are very widely used in organisations (for example, estimated to be 90% of fortune 500 organisations in the USA). The strengths of 360 seem to be clear: they can heighten self-awareness by holding a mirror up to the individual. Self-awareness, as we know, is the cornerstone of personal development. It offers individuals the choice to change or not to change, and in particular ideas about the areas in which they need to change.However, engagement of the individual is key to the success of 360 and as a result, the potential value of 360 is frequently lost in my experience. Here are a number of reasons why:
• Questionnaires are too long, with a question for every single behavioural indicator in the competence framework. The consequence of this is that respondents put less effort into completion, getting frustrated about the length of time taken, and responding at speed without really considering what each item means. This can result in bland, middle of the road feedback. Better to carefully choose the items to be representative of the competencies in the framework. It should be possible to complete a 360 in about 10 minutes.
• Questions are too generic, poorly phrased and the rating scale has not been well thought through. Again, all of these can be an annoyance to respondents. Generic behaviours are difficult to apply to a specific role and the respondent can struggle to interpret them into something concrete that they can relate to. Poorly defined rating scales can result in 'middle of the road feedback', with no differentiation between effective and less effective performance. The net effect of all of these is that the recipient receives vanilla feedback that is of little use to them. Better to carefully write questions that have a clear relevance to the role and to use a well-defined rating scale that will allow you to genuinely differentiate between levels of performance – even in a group of high performing individuals.
• Reports are too long and detailed. The length of reports depends on the number of question items as well as the level of detail that is reported. (I've seen reports that are up to a daunting 40 pages in length!). For example, reports that provide feedback against every single question can appear to be very useful. However the law of diminishing returns is relevant – the more question items there are which are reported individually, the less valuable and less engaging the feedback can become. From experience, recipients of such reports can at times become overly hung up on the detail. This is unhelpful, particularly where items are badly worded. This problem can be exacerbated when feedback indicates the frequency of scores for every single item. In my experience, this can have one of two effects: the recipient either rationalises the feedback, e.g. "well, only one person said that, and I think I know who that might be, so I'll ignore it". Whilst this is useful data in terms of their approach to receiving feedback, and is in itself diagnostic, the result is that the recipient can disengage. Alternatively, a recipient may become overly concerned about the detail.
"I need to know who said that", thus focussing more on the specifics and what one person said rather than engaging with the overall message that the feedback provides.
If you want to get the most out a 360 process, therefore, focus on using fewer questions of higher quality (i.e. expressed in concrete terms that are relevant to the role), ensure that you use a well-defined rating scale and don’t over engineer the feedback report – just because data can be cut and sliced in a particular way does not mean it is better. Sometimes, less is more!
There have been two recent high profile failures of leadership in the headlines: Rupert Murdoch at News International and, perhaps even more dramatically, Bob Diamond at Barclays Bank. Isn’t it interesting that both are prepared to take credit for the success of their businesses, but much slower to accept responsibility when things go wrong? Bob Diamond has made an estimated £98M in the six years since he has been at Barclays, much of it in bonus payments for the success of the bank. No doubt he would say that he deserves this due to his effective leadership. So far, however, there is no sign of a similar degree of responsibility for the recent LIBOR scandal though. Why is this?
From a psychological perspective Attribution Theory can help us to explain this behaviour.
Attribution theory is the process by which individuals explain the cause of either their own or others’ behaviour. For example, I’m a good driver, and when I cut someone up in a roundabout it’s because I’m in a hurry to get to an important meeting. When someone else cuts me up it’s because they are a bad driver. In the context of Barclays: Bob Diamond sees himself as a good leader who has contributed to the significant growth of the Bank, hence he deserves his bonus. However, the recent LIBOR scandal is not his fault, but the fault of certain traders. These are bad traders.
Essentially it is a form of rationalising ones own actions. The impact on others, though, is that people who tend to rationalise like this come across as unprepared to accept responsibility and as arrogant. Ultimately, as in Bob Diamond’s case, it results in leadership derailment and an apparent inability to learn from critical mistakes.
In the world of internet technology, the race is on to make every user’s experience of the web as personal as it can be. Search engines - such as Google - are tracking every search and click that we make, and depending on the choice, will use that information to target advertising at us. Information is passed on, within seconds, from one website to another, and ultimately on to third parties so that advertising can be focused more effectively.
So, what’s the harm in that? On one level, not much. Given the amount of information on the web, personalisation might feel like a good thing. However, personalisation also influences the outcome of search results, for example by changing the order in which results are displayed on the page, and overall the number of ‘hits’ you receive in searches. The developers of search engines know that most people do not go beyond the first page when looking through search results and clicking on a link. It’s in their interests, therefore, to put the results that you are most likely to enjoy at the top of the list. They achieve this by tracking your history and using this to tailor results for you.
And here in lies a problem. A very common bias in human beings is ‘confirmatory bias’ ( a form of unconscious bias) which is when we tend to ignore information that does not support our view and focus too much on information that does support our view. Now think what this means for us when a search engine presents us with personalised search results. In practice, through personalising my search results, the search engine will tend to prioritise items that agree with my point of view over those that might contradict my view because historically that is what I have tended to click on. In my daily search for news, therefore, the chances of me hitting upon analysis that contradicts my own view is reduced. Some might argue that this is the same with choosing printed news. Not so. When I choose printed news from the newsstand, I make a conscious decision of which paper I buy and can consciously choose to read papers with differing political affiliations. On the web, the choice is a less conscious one as I will not always be aware of the political affiliations of the news source. Thus Yahoo, Google, Ask and the like could be narrowing our minds.
Interviewed on Radio 4’s Today Programme to promote his upcoming book, “A Colossal Failure of Common Sense”, Larry MacDonald, the ex VP of trading at Lehman Brothers, revealed some of the boardroom secrets of the financial institutions that have resulted in the current economic meltdown. But, the behaviours he describes, and their consequences are actually much more common. The only difference with Lehman’s is the extent of the impact.
Describing the CEO at the time as unprepared to listen to criticism and as creating an “either get your head down and get on with your job or lose both” culture it’s not hard to see why warnings made as early as 2005 were ignored, and later on not even expressed any more. A bit of research into Richard Fuld, Lehman’s CEO, revealed an individual who is described as reclusive and who in his pre banking career was dismissed from the US Air Force for a fist fight over a misunderstanding. At work he is described as so single minded and focussed that he has few interests outside of work. As Business Psychologists we see these behaviours so often in senior leaders: those people that become detached from others around them and make decisions in isolation, not sharing their thinking, and those that are so engrossed and passionate in their work that anything approaching bad news can lead to such disappointment and frustration that tempers flare and only good news is well received. But these people get to the top. Why? There is likely to be an element of managing their impact as they move through the ranks, but primarily I think it’s because the negative aspects are ignored because they deliver results. Many businesses reward task leadership over people and thought leadership, an approach which actually encourages such behaviours. The changes that are needed therefore, are a shift in what is rewarded as well as early leadership development interventions because by the time people have made it it’s too late.
Following Shell's CEO, Jeroen van der Veer, comment to the FT saying that: "You have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse", let's explore the issue of remuneration and bonuses. Psychologists have long concerned themselves with human motivation and whilst there is no theory that can explain it in its totality, they are useful in understanding what is going on here. What van der Veer was referring to is the "motivation ceiling". The theory of money as a motivator goes like this: more money = more motivation. But where is the ceiling? At what point can someone no longer work hard to warrant the remuneration they receive? Whilst we could, in theory, increase remuneration without a limit, an individual's performance will not increase in a linear fashion. Clearly levels of remuneration are not just linked to how hard people work. Other factors to consider are the level of responsibility, the complexity of the role as well as the value that an individual contributes.
Further, continuously increasing salary can create what we call the Hedonic Treadmill: an increase in salary motivates us for a short period of time, but then we grow accustomed to it and want more. Combine this with our need for equity, whereby we compare ourselves to others in similar roles and become dissatisfied when they earn more, we get into a situation of spiraling remuneration and eye watering bonuses. But does some one already earning £1.3M really need that additional £200K to bring them to £1.5M? Of course not.
Whilst to some extent, we are all motivated by money, there are other factors that should be considered here. Work can give us meaning, recognition and a sense of purpose. All have a motivational impact. Maslow spoke of the hierarchy of needs in the 40's, with self actualisation being at the top and our physiological and security needs being at the bottom. Although a simplified theory, it does suggest that financial rewards do not contribute towards the higher levels of human motivation. In thinking about remuneration, therefore, we should be thinking about more than just how much we give somebody. More money does not equate to better performance.