Stay informed with free updates
Simply register at Investment banking myFT Digest – Delivered straight to your inbox.
As the end of the year approaches, investment banks are embarking on one of their most hallowed (and often complained about) traditions: the 360-degree performance review. The process collects feedback from all levels (managers, peers and juniors) to obtain a comprehensive view.
In theory, it promises a fair and holistic evaluation. In practice, however, this ritual tends to elicit more skepticism than support.
The concept sounds great on paper. Anonymous reviews from a representative sample of colleagues should provide a balanced and collaborative assessment of performance. But for all the talk of objectivity, the 360-degree review is often less about constructive feedback and more about office politics. Without careful design and oversight, it risks becoming a platform for mischief where gaming the system can overshadow evaluation.
Here’s how 360-degree reviews work: Employees receive numerical scores based on their colleagues’ responses to an online survey of typically 50 questions. The subject is then forcibly ranked against his or her peers. The lengthy questionnaire aims to capture a wide range of metrics, from negotiation skills to teamwork and sense of urgency.
However, the system is vulnerable to manipulation. Some bankers, far from seeing the 360 system as an opportunity for personal growth, see it as a platform for self-promotion. The strategies used to game the system are as varied as they are clever, and institutions are constantly trying to stay one step ahead. It’s the performance review version of Whac-A-Mole: close one loophole and another appears. The result is an endless game of cat and mouse between employees trying to improve their scores and banks trying to maintain the credibility of the process.
One of the oldest tricks in the book involves selecting reviewers. In some companies, employees can personally choose their reviewers, opening the door to mutually beneficial quid pro quo agreements. He lavishes hyperbolic praise on his office mate, who duly returns the favor. To counter this, some banks have turned to reviewers selected by managers, hoping to get more objective feedback. If it works is another story.
Another controversial feature is unsolicited reviews. Some institutions allow employees to submit comments even if they were not selected as reviewers, in theory to include a broader spectrum of input beyond just a select group of allies. In practice, however, this can become a way to silently torpedo a rival. Some companies have eliminated unsolicited reviews entirely, thinking that having fewer opportunities to sabotage a colleague can only be a good thing.
The challenges go beyond the game. The criteria used in 360-degree reviews are often a hodgepodge of metrics, combining quantifiable measures like revenue generation with softer concepts like teamwork and acting as a “culture bearer.” These are valid points to measure, but combining them can lead to a confusing mix of results that are difficult to interpret consistently.
Banks are not blind to shortcomings and mischief. Many have made various modifications, such as filtering out extreme ratings (both too generous and too harsh) to reduce data distortion. In fact, most leaders treat scores more like gut testing than gospel, a way to confirm what they already suspect. When it comes to decisions about promotions and bonuses, managers still rely heavily on their own observations and those of their trusted lieutenants.
For many managers, the most revealing part of the 360-degree review is often the free-text comments section, where anonymous feedback can offer genuinely helpful and brutally honest critiques. But like review ratings, these comments can be used as weapons, with anonymity serving as cover to settle old scores or undermine office rivals.
And sometimes the comments are trollishly unserious: Several years ago, a colleague used the 360 form to criticize me for “constantly skipping leg day at the gym.” I had no problem finding out who the prankster (slanderer) was!
The question is whether the industry should rethink its approach to performance reviews. The current system consumes a lot of time and resources and possibly obscures more than it illuminates.
One idea is to abandon the annual ritual altogether in favor of continuous feedback throughout the year, even if this places a greater burden on management. Another solution would be to explore team assessments to encourage collaboration. And could AI-powered analysis be used to examine feedback patterns and point out egregious examples of back-scratching and back-stabbing?
For now, the 360-degree review remains a curious mix of commentary, mischief, and cleverness. Success in this system often reflects both a banker’s political acumen and his professional competence. Maybe that’s the appeal after all.