360-Degree Feedback Content Linked to Higher Accuracy In Measuring Retail Store Sales

A study by 3D Group, a consultancy specializing in 360-degree feedback surveys, found a correlation between employee ratings of 417 retail managers and annual store sales. However, in a new area of focus, the study also measured the effectiveness of survey content, the questions used and how they were scored. Results were compared from two different surveys. These results were originally presented at the 18th annual conference of the Society of Industrial Organizational Psychologists held in Orlando, Florida.

Berkeley, CA (PRWEB) July 7, 2004 -- A study by 3D Group, a consultancy specializing in 360-degree feedback surveys, found a correlation between employee ratings of 417 retail managers and annual store sales. However, in a new area of focus, the study also measured the effectiveness of the survey content, the questions used, and how they were scored. The results were compared from two different studies. These results were originally presented at the 18th annual conference of the Society of Industrial Organizational Psychologists held in Orlando, Florida.

"What we found was that the construction of the survey itself, the formulation of the questions and their content had a significant impact on how well the surveys predicted success of sales goals" explained Dr. Dale Rose, President of 3D Group (http://www.3dgroup.net) and co-author of the study. One survey was developed by industrial psychologists and covered 50 detailed job behaviors, while the other survey was written by the VP of human resources and simply asked employees about 8 very broad competencies.

"Both surveys used had significant correlations, but the detailed behavioral survey correlated quite a bit higher than the other, which tends to support our hypothesis: that ratings of specific behaviors are more accurate than ratings of broad competencies. If you want to use 360 feedback to drive business results, behavioral assessment will get a lot better results than a quick and easy assessment of general traits." Dr. Rose continued, "The bottom line is that behavior is complex, and asking an employee to rate their manager on 'communication' is not as effective as asking them to rate the manager's 'clarity of speaking,' 'writing skills,' and 'confidence' when speaking to customers."

Background
The use of 360-degree feedback is varied and inconsistent. Organizations rarely state the precise outcomes they are looking for from survey results, and most often do not measure post-survey actions. To date, most studies of effectiveness look at changes in behavior after 360-degree feedback has been administered. Few studies have linked ratings to established individual or organizational outcomes. However, Sala & Dwight (2002) and Reiter-Palmon & Haley (2002) have articulated relationships between 360-degree feedback results and other measures.

In the current study, stakeholders in the client organization focused on linking 360-degree results with store financial outcomes or "Sales to Target." 3D Group managed the project and the method. Details on the development of the surveys are published in "Validation of a 360-Degree Feedback Instrument Against Retail Sales Performance: Content Matters," by Mark C. Healy and Dale S. Rose, Ph.D. (http://www.3dgroup.org/TR8202.pdf).

Method
The first survey was developed using job analysis techniques by the organization's in-house Industrial/Organizational Psychologists. Sixty-five store managers completed this survey. The second survey was not developed using I/O practices and was instead developed by senior HR executives motivated to create a shorter survey, with 366 managers completing the second survey. The measures used for sales performance included: Overall Sales, the total sales for each quarter of the fiscal year for the store managed by the participant, and the total of those sales for the entire year. And Sales-to-Target, the percentage of sales, over or under the planned sales goal, made by the retail outlet.

Conclusions
Overall, 360-degree feedback ratings were positively and statistically correlated with Sales-to-Target: higher survey scores equated to greater sales.

Results indicate that 360-degree ratings can be correlated with business-critical financial indicators.

Retail General Managers who scored higher on 360-degree feedback were more likely to meet or exceed their sales goals.

The content-validated 360-degree instrument (i.e., the 1st survey) revealed a higher correlation with sales-to-target than the second global competency survey.The item content of 360-degree feedback plays a role in its validity.

Carefully developed, job-specific surveys may exhibit the best validity, but these should be compared to standardized "off-the-shelf" instruments.

Today's Need for Developmental Feedback
These findings are more relevant today because the job market is easing. In a recent CareerBuilder.com survey, 44% of Hiring Managers say they plan to do the majority of their hiring for the year in the third quarter, which is right now. But as the hiring environment improves and organizations seek to hold on to the top employees they currently have -- particularly in the volatile, high-turnover retail sector -- they need to offer high satisfaction benefits. The American Management Association (AMA) survey of 352 HR executives confirmed that certain enhancement issues were of top importance to employees and improved retention. "Investing in employees' future is more important than immediate compensation," said Eric Rolfe Greenberg, AMA's director of management studies. "Programs that improve work skills and future career development are seen as particularly effective."

To cap it off, HR managers perceive urgency in the same issues. Workforce Recruiting (part of Workforce.com) just published results of a survey that pinpointed the most critical staffing issues for organizations today. Five of the top six issues can be measured and/or addressed using 360-degree or multi-rater feedback surveys, with results being applied to development and coaching:

Additional Research Required
While the findings of the study certainly point to the importance of developing the appropriate content when utilizing a 360-degree feedback instrument, additional research would help validate this theory. Any organization interested in measuring their 360-degree program content or the effectiveness of their 360 degree feedback process can contact 3D Group.

Additional research studies on 360-degree feedback instruments, content and results:
http://www.3dgroup.net/articles.html
http://www.3dgroup.net/bench.html

The Society of Industrial Organizational Psychologists
http://www.siop.org

AMA quote source:
http://www.businessknowhow.com/manage/higherprod.htm

Available for interviews: Dale Rose, Ph.D., President and Co-Founder of 3D Group.
To schedule an interview contact: Donna Lehman 510-525-1474 or dlehman@market-up.com

About 3D Group
3D Group specializes in 360-degree feedback and other employee assessment tools. They use their expertise in psychometrics, the specialized discipline of psychological testing and measurement. These measures are used to deliver a wealth of objective, reliable, and easy to understand data that can be utilized in a variety of ways to improve manager and company performance. 3D Group is dedicated to helping businesses, and nonprofit organizations of all sizes to increase the effectiveness of their people and programs. 3D Group researchers have authored numerous publications related to employee assessment, including the "Benchmark Study of North American 360-Degree Feedback Practices, 2002 Study" and "Current Trends in 360-Degree Feedback."
More information can be found at: http://www.3dgroup.net

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360-degree feedback 360 degree surveys retail managers retails store sales retail business business measurement store sales leadership development developmental feedback human resources hr metrics

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