360-degree feedback is the most exciting development to enrich human resources, organization development, consulting and coaching. Where these have generally been limited by the perspective of the subject and supervisor, 360-degree feedback broadens the canvas dramatically.

It got its name because it provides information from many directions. If you picture the individual being assessed as holding a compass, that person’s peers are responding to the survey from 90 degrees, the direct reports from 180 degrees, internal customers from 270 degrees, and supervisor(s) from 360 degrees. It expands the very private coaching relationship into a wider and more realistic forum, providing frank evaluation by direct reports, peers and others.

In human resources, 360-degree feedback, also known as ‘multi-rater feedback’, ‘multisource feedback’, or ‘multisource assessment’, is employee development feedback that comes from all around the employee. “360″ refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with upward feedback, where managers are given feedback by their direct reports, or a traditional performance appraisal, where the employees are most often reviewed only by their manager.
The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. The results are also used by some organizations for making promotional or pay decisions, which is sometimes called “360-degree review.

Benefits

Individuals get a broader perspective of how they are perceived by others than previously possible.Increased awareness of and relevance of competencies. Increased awareness by senior management that they too have development needs. More reliable feedback to senior managers about their performance. Gaining acceptance of the principle of multiple stakeholders as a measure of performance. Encouraging more open feedback — new insights. Reinforcing the desired competencies of the business. Provided a clearer picture to senior management of individual’s real worth (although there tended to be some ‘halo’ effect syndromes). Clarified to employees critical performance aspects. Opens up feedback and gives people a more rounded view of performance than they had previously. Identifying key development areas for the individual, a department and the organization as a whole. Identifying strengths that can be used to the best advantage of the business. A rounded view of the individual’s/ team’s/ organization’s performance and what the strengths and weaknesses are. Raised the self-awareness of people managers of how they personally impact upon others — positively and negatively. Supporting a climate of continuous improvement. Starting to improve the climate/ morale, as measured through the survey. Focused agenda for development. Forced line managers to discuss development issues. Perception of feedback as more valid and objective, leading to acceptance of results and actions required.

(Take from Wikipedia, & Panoramicfeedback.com)