Impact of the 720-Degree Performance Appraisal System on Organizational Productivity in IT Companies

Abstract

The Information Technology (IT) industry thrives on innovation and continuous improvement to maintain competitive advantage and employee satisfaction. Traditional performance appraisal systems, such as 90-degree, 180-degree and 360-degree feedback, primarily focus on internal evaluations and often fail to capture external stakeholder perspectives. The 720-degree performance appraisal system is an advanced framework that incorporates feedback from both internal and external stakeholders, including clients, vendors and partners, providing a holistic evaluation of employee performance. This study explores the impact of the 720-degree appraisal on organizational productivity, employee motivation and turnover in IT staffing companies in Bangalore, India. Using a sample of 900 respondents, the research employed ANOVA and independent t-tests to examine hypotheses. Results indicated that while the system enhanced employee engagement and broadened feedback quality, its statistical impact on motivation and turnover was not significant. Findings suggest that while 720-degree appraisals provide valuable insights, their influence on employee outcomes may depend on other organizational and cultural factors. Recommendations for effective implementation and areas for future research are discussed.