What’s the business case for 360⁰ feedback?

Also see our page for 360-degree feedback and related blog Best practice guidelines for 360 feedback

Let’s take the conservative estimate of a well-planned 360-degree feedback producing 5% improvement in performance. This would give an organisation, say, an additional £2500 value from a manager if their annual salary is £50k. Based on the average cost of a 360-degree review and one-to-one feedback, it could be argued that the return on investment is over 600%.

Or course the real value of 360-degree feedback lies beyond this, in the knock-on effect of 360-initiated performance improvement:

A senior manager put his effective management down to being direct and candid – characteristics he took pride in. However, a 360⁰ review revealed that colleagues felt he came across as unapproachable and arrogant, even leading some to actively avoid dealing with him. The honesty of his colleagues (giving confidential feedback) meant that he was persuaded to adapt, resulting in improved performance from his team and those he worked with, who were now comfortable to initiate contact with him.

So if we extend the example calculation above to include an additional 5% improvement in performance from each of his four direct reports (e.g. each earning £30k), this would add £6k to the return on one manager’s 360-degree review.

From this perspective, the argument is really about why you wouldn’t incorporate 360-degree feedback into a organisation’s performance management solutions. Why not repeat this model with the numbers from your company and see what you think?

This post was written by Vandy Massey CEO of Engauge, a specialist provider of 360-degree reports. LCP can partner with Engauge to include 360-degree feedback in your training or development programme – just call 01273 707404 or email enquiries@lcp.org.uk for more information.

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