360-degree feedback can include input from external sources who interact with the employee (such as customers and suppliers), subordinates, peers, and supervisors.
Nonetheless, organizations are increasingly using 360-degree feedback in performance evaluations and administrative decisions, such as in payroll and promotion.
The origins of 360-degree feedback date back to around 1930, with the German Reichswehr, when the military psychologist Johann Baptist Rieffert developed a selection methodology for officer candidates.
One of the earliest recorded uses of surveys to gather information about employees occurred in the 1950s at the Esso Research and Engineering Company.
[3] Today, studies suggest that over one-third of U.S. companies use some type of multi-source feedback,[4] including 90% of all Fortune 500 firms.
[7] At the same time, anonymous participation has also been found to result in more accurate feedback, in which case confidentiality among human resources staff and managers should be preserved.
[7] The standardisation and optimisation of rating scales and data collection also affects assessment accuracy, including such factors like the time of day.
[8] However, even with training measures in place, unconscious bias may still occur due to factors such as the cultural influences or relationship quality between the rater and ratee.