The 360-degree spin

by 04 Aug 2009

360-degree feedback is a well-rounded and established method of assessing employee managerial performance. Craig Donaldson looks at how a leading automotive retailer has successfully used 360-degree feedback to develop its leaders and improve business performance

Inchcape Australia is part of the Inchcape group of companies, the world’s largest independent interna tional automotive retailer with operations in nearly 30 countries. With more than 10,000 employees world wide, its group sales at the end of December 2008 were $15.1 billion. In Australia, Inchcape employs 1100 peo ple, and its group sales at the end of last year were $1.5 billion with an operating profit of $90.4 million.

Leadership at Inchcape

Inchcape Australia spends a lot of time developing com pany-specific leadership skills, with a range of criteria underneath each leadership skill defining what is seen as “gold standard” leadership, according to its director of human resources, Michael Sommerton.

As an extension to this process, he says it is important that all managers be given an opportunity to have their leadership skills “tested” by way of a 360-degree assess ment. This is done as part of a biannual review, and Inch cape partnered with an external consultancy to develop an online 360 tool that was company-specific and completely in sync with its leadership skills.

“Therefore, we are measuring exactly what we say are the required sets of behaviours and skills we need to see in a ‘gold standard’ manager,” Sommerton says. As part of the process, he says managers have a two-hour coaching session with an independent organisational psychologist to review the results of the survey and establish a plan of action to work on areas of development, which is then reviewed with their manager.

Participation in the 360 review is voluntary as part of a self-development exercise, Sommerton says. “We chose a voluntary process, as opposed to making it mandatory for all managers, to encourage a sense of ownership in their own development,” he says. “The take-up rate among managers was very high and the feedback from the initiative very positive. It was also interesting to note which managers chose not to take up the initiative!”

Inchcape, which was also a finalist in last year’s Aus tralian HR Awards, is looking to make the process mandatory next year because it has proved vital to man agerial development.

The organisational link

The 360 review links to the Inchcape Management and Assessment Performance System (IMAPS), an online sys tem which allows for all performance management data, including assessment, talent review, career aspirations and 360 assessment results to be stored in a centralised database, Sommerton says.

“All managers have access to their team results at any time for continual performance review,” he says. “Importantly, the 360 data is used together with data we collect from our annual Gallup employee engage ment survey as part of our talent review and planning, to ensure that people [metrics] as well as financial and customer metrics are used to assess a managers overall performance.”

Weighing up the benefits

“Three years ago, the only metrics that determined the skills of an Inchcape manager were financial ones – being sales, conversion rates, market share, and so on. Clearly this was unsatisfactory, only giving one side of the story,” Sommerton says.

Now, he says, Inchcape has world-class tools in place to determine how engaged employees are by work area, and what skill deficiencies might require attention, as measured against specific Inchcape leadership skills.

“We now know managers who produce great cus tomer results (via a Net Promoter Score) and high engage ment scores (via Gallup) produce a better bottom-line result,” he says.

“The 360 tool gives us data to work on specific devel opment needs, and there is an absolute increased aware ness of the importance of both EQ and financial skills in being a successful Inchcape manager.”

Words of advice

Having independent support in the process is important, according to Sommerton. “We could have run the pro gram completely in-house, however, the independent coach working with the manager to understand the results and developing action plans is extremely worth while,” he says.

“Use of the external facilitator for feedback is key to remove any perceived bias and allow the emotional reac tion of participants to occur in a non-threatening envi ronment.”

Inchcape also encourages managers to advertise their results if they feel comfortable, Sommerton adds. “Even in cases where some raw feedback was received, man agers gained great respect from their peers and employ ees where they acknowledged the feedback and sent a copy to all who participated. Some even posted it on their office door!” he says.

Choosing the correct respondents is also crucial to ensure the feedback is meaningful, while Sommerton advises ensuring that action plans are followed up or incorporated into wider action plans and that managers who may feel a little vulnerable after receiving their results are given the support they need.