Does 360 degree feedback really work in practice?
This is probably not a well phrased question, since it's too simplistic. The reality is that the process of employees receiving feedback from various sources can improve their performance under certain circumstances, but under other circumstances, can have the opposite effect.
In principle the idea of 360 feedback is sound. The more information we have about how we are doing, and how to improve, the better we will be able to improve, at least in theory.
The practice of 360 feedback as it is used in the real world, however, is a completely different issue. Often the 360 degree feedback system is coercive, intimidating, and misguided, so in those many situations it doesn't work in practice.
Like anything, it can work if it's done well. Unfortunately, it's usually not implemented well.