There are many advantages of multisource feedback systems, but there are some potential risks involved. For example, negative feedback can hurt an employee’s feelings, particularly if those giving the feedback do not offer their comments in a constructive way. Second, the system is likely to lead to positive results only if individuals feel comfortable with the system and believe they will be rated honestly and treated fairly. User acceptance is an important determinant of the system’s success.

Third, when very few raters are providing the information, say, two or three, it may be easy for the employee being rated to identify who the raters are. When anonymity is compromised, raters are more likely to distort the information they provide. Fourth, raters may become overloaded with forms to fill out because they need to provide information on so many individuals (peers, superiors, and direct reports).

Finally, implementing a multisource feedback system should not be a one-time-only event. The system should be in place and data collected over time on an ongoing basis. Multisource feedback systems are not necessarily beneficial for all individuals and all organizations. For example, individuals who are high on self-efficacy (i.e., they believe they can perform any task) are more likely to improve their performance based on feedback received from peers compared to individuals low on self-efficacy.

Also, the effect of receiving feedback from multiple sources is most beneficial for individuals who perceive there is a need to change their behavior, react positively to feedback, and set appropriate goals.