To make important decisions in various important areas, like marketing, compensation, production, training and succession, organizations need to know about the effectiveness and performance of the employees. 360 degree feedback provides useful information and insight and unveils areas for improvement or concern, so as to improve the work culture within the organization. This kind of performance appraisal is also perfect to assess leadership qualities and how the leaders and managers are perceived by the employees. As this kind of feedback is very comprehensive and detailed, it is likely to be received personally as compared to other kinds of performance evaluations.

For this, it is important to prepare the employees, so that the perceived criticism is taken in a positive manner for protecting their morale. Also, it is very essential to keep the surveys anonymous and confidential so that the employees can give an open and honest feedback without any apprehensions. This helps the employees to know about their strengths, as well as weaknesses, and figure out ways to work upon them. This also helps the organizations to determine training and development needs for certain employees in order to improve the overall performance and productivity. Thus, 360 degree feedback is one of the best ways to improve overall performance and productivity of an organization.