The Impact of 720-Degree Performance Appraisal on Organizational Productivity: A Study of IT Companies in Bangalore

Abstract

Performance appraisal has long been regarded as a cornerstone of human resource management, particularly in dynamic industries like Information Technology (IT) and IT-enabled services (ITES). Traditional systems such as the 90-degree, 180-degree and 360-degree appraisal models, though widely used, primarily focus on internal evaluations, often overlooking external stakeholders’ perspectives. The 720-degree performance appraisal system addresses this gap by incorporating feedback not only from supervisors, peers and subordinates but also from clients, customers and business partners. This study investigates the implementation of 720-degree performance appraisal systems within IT and ITES companies in Bangalore, India’s IT hub. A comparative analysis of organizations employing 720-degree systems versus traditional models was conducted with a sample of 900 respondents from CMM Level 3 and above companies. Using ANOVA for hypothesis testing, the findings indicate that while the 720-degree appraisal framework offers a more comprehensive evaluation of employees, its statistical significance in improving organizational productivity remains dependent on effective implementation. The research contributes to both academic literature and managerial practice by providing insights into the extent to which expanded feedback mechanisms influence motivation, accountability and organizational growth.