360 Degree Feedback

360 Degree Feedback Adds Little Value if it Lacks Two Key Components

360 degree feedback has become a common tool for development, leadership assessment, talent management, and even appraisal. In fact, some studies report that as many as 90% of all Fortune 500 companies are either currently using 360 degree feedback, or are considering it (even with current economic challenges).

While some organizations report that their 360 assessment programs are thriving, others indicate that they have become stagnant, or that they have not received the individual or organization improvement they thought they might receive from this valuable tool. So why the discrepancy?

Unfortunately, many of these organizations may simply be throwing their money away. Our latest study shows that of those people who take a 360 and do not set goals or receive coaching, only 34% actually act on their feedback. Conversely, two-thirds of this group report the feedback process resulted in no change or improvement. It's not hard to see that the return on this investment was poor!

In formal studies we have conducted over the past decade with thousands of managers across diverse organizations, industries, and functions we found some very interesting facts about making the 360 feedback process more effective. Two areas stand out more than any others: Coaching and Goal Setting. The results of our latest research are very telling:

The bad news…
  • Only 34% of those who did not receive coaching felt the 360 process was effective, and reported that they had made changes as a result of the feedback.
  • Less than 40% of those that didn't receive coaching set any goals to improve.
The good news…
  • 87% of those that set goals felt the 360 process was effective.
  • 92% of those that received coaching reported that the overall 360 process was effective.
  • 94% of those that received sufficient coaching and set goals felt the 360 process was effective, and reported they had made changes as a result.
These studies leave little doubt as to the importance of coaching and goal-setting in making your 360 process more effective. Yet we find that less than half of organizations using 360 degree feedback emphasize coaching and goal setting as part of the process.

Conclusion
The difference between 34% effective and 94% effective? Goal Setting and Coaching. 360 degree feedback can either be a valuable tool or a waste of already-tight employee development dollars. The effectiveness of a 360 degree feedback process greatly increases when the participant receives coaching, creates a personal development plan, and receives regular follow-up from his or her supervisor. Remember, 360 feedback results are only the catalyst for change. Coaching, goal setting, and follow-up are the factors that lead to real improvement.

Copyright 2009 by DecisionWise, Inc.