There are two types of 360 degree evaluations:

360 degree feedback is highly effective as a development tool. It gives an opportunity to provide unspecified feedback to a co-worker that they might not be comfortable in providing directly. This feedback helps employees to recognize their strengths and weaknesses and become more effective. It helps them to know how others perceive them and so that they can adjust and make improvement accordingly.

Many organizations use 360 degree feedback as an appraisal tool, though it is not a very good idea. It is because when you use 360 degree evaluation to measure performance, it becomes difficult to properly execute the process. The reason for this is simple, as this evaluation focuses more on competencies and behaviors, rather than job requirements, performance objectives and basic skills.

The main aim of 360 degree evaluation is to enhance self-awareness of employees so that they can improve their work performance. It is also very essential to keep the survey short and precise. Basically, the evaluation process is based on diverse sources, like customers, co-workers, managers, vendors, contractors, and others, providing an objective and more balanced approach to measure the performance of an employee. This helps in ensuring better customer services, higher productivity, and improved organizational performance.