Multi rater feedback, simply put, is the process of having multiple people who interact with a worker -- managers, coworkers, subordinates, and even customers -- provide paper feedback regarding that worker's performance. It's often called 360 degree feedback due to the multilateral of the incoming evaluations. Multi rater feedback is exceptionally useful in helping managers guide employee development, continuously realigning the employee's personalized goals with the company's overall vision.
Employees want to know how well they're doing, and 360 degree feedback is an excellent tool to enhance their self awareness by highlighting what their supervisors, subordinates, peers, and outsiders see as their personal strengths and weaknesses. By comparing and contrasting those strengths and weaknesses to the corporation's goals and vision, a manager can create a detailed plan for what precise areas must be addressed in order for the worker to stand up to the corporation's expectations.
Multi rater feedback creates accountability on a massive scale -- sociologists call it 'peer pressure'. Not only is a worker accountable for meeting his manager's goals for him (which can often fail due to a personality conflict between the two), but he is also accountable to every individual he works with on a daily basis -- and let's be honest, if he has a problem with even most of them, he should probably be replaced immediately anyway.
Because 360 degree evaluations give an individual many different perspectives on his or her performance, they create a powerful sense of contrast between how an individual sees themselves and how everyone else sees them. It's easy to say that one person who disagrees with your self-opinion is merely wrong, but when a dozen people all independently disagree, it encourages a powerful self-reflection that is an amazing tool to provoke personal change.
This is excellent for a frontline worker, but the effect is even more powerful in the company's leaders. The most often-expressed complaint about managers can be summarized as a lack of emotional intelligence -- an inability to empathize with their subordinates, and more importantly to understand that they can't. With multi rater feedback, that predicament will never remain for long.