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Used properly 360 degree feedback can be very helpful. However it has to be debriefed carefully as people do not know somethings about themselves that other people know about them. Go to http://www.businessballs.com/johariwindowmodel.htm
for an explanation and clear daigram of how this works.

When you do give people feedback, do it sensitively, privately and with the outcome of improving their performance and self-esteem.