Building a business case for 360° feedback

According to best practice guidelines published by the CIPD, the organisations most suited to 360° feedback, are those who already have a culture of effective performance management and appraisal.

A study conducted by the CIPD has shown that a conservative estimate for return on investment (ROI) is between 5 and 10% in terms of performance. A manger on a salary of £50k correlates a value to the organisation of £2500 - £5000.

But the use of 360° feedback can create even more value than this, which becomes clear when you look at the butterfly effect of a 360° initiated performance improvement.

For example, in a recent leadership program conducted by Capita, one senior manager took great pride in his philosophy of being direct and candid. He saw this as a personal strength and a way of managing effectively. Colleagues and staff had a different perception – their feedback in his 360 degree review made him aware that he was seen as arrogant and unapproachable. In fact, some people actively avoided dealing with him. Realisation of this unintentional effect persuaded him to adapt his style, resulting in improved performance from his team who now feel more comfortable to initiate contact with him.

Based on the CIPD’s ROI figures, an increase in both his performance and the three direct reports; results in a sizeable figure.