How much should you pay for 360 feedback?

“The cynic knows the price of everything and the value of nothing.” – Oscar Wilde

What is a reasonable price to pay for a 360 feedback service? How do you weigh up the cost against the value you’ll receive.

The old adage that says you get what you pay for has a stronger point than usual in this context. What is a reasonable price to pay for a 360 feedback service? On one level this is a pretty straightforward question and one that applies to anything in life. We all want to think we’ve got a good ‘deal’.

Smart software isn’t the holy grail of 360s. It’s the quality of the feedback service that really counts. 360 feedback is about people – feedback from people, about people, enabling them to improve their interactions with other people. Buying cheap and getting poor quality service is a huge risk.

Trust is paramount

Look at the main reasons for using a 360 system:
360 reviews are conducted to improve individual (and thereby organisation-wide) performance. Often this is done in the context of a development programme or appraisal process. A badly managed process can cause more harm than good. This can result in a disaffected workforce, rifts in the organisation and in worst cases, loss of trust.

Trust is a major factor in the success of a 360 feedback process. For individuals being presented with their 360 report, the ‘what next’ question points to change at some level. Few people feel comfortable with change, particularly if it’s imposed on them, or they’re uncomfortable with the way the message has been delivered. The way in which a 360 review is managed and the support provided throughout the process are critical to the outcomes.

So, when evaluating the price of a 360 review, consider the cost in relation to the value you are getting. Think through the potential results before making a decision. The range of 360 solutions on offer, (and the prices charged) is increasing all the time.
DIY, off-the-shelf cut-price versions are available. But what about that essential backup service? The ‘Rolls Royce’ versions at the other end of the scale, may provide the service but be out of the price range of many organisations.

Think through the risks

It doesn’t make sense to risk damaging the trust in an organisation in order to use a cheap tool. If the price difference between the cheap option and a professionally managed, well-supported system is £50 per person, you could save £50 in the short term, but lose thousands in loss of productivity on each employee in the longer term.

Staff can have a negative experience as a result of
- selecting the wrong development priorities because the feedback isn’t solid enough;
- feeling that their needs have not been met by the process, or
- disbelieving the results because they don’t believe the system is robust enough.

What is the real cost?

At an organisational level, the amount of preparation and planning required to conduct a 360 review may be fairly complex. It involves timing, gaining buy-in, communication, and establishing the next steps. An expert supplier who is being paid a fair rate for the 360 reviews is more likely to be able to provide additional resource and advice within the package. The supplier who is charging a cut-rate fee for their 360 feedback service will either not be able to give the same level of support, or will be charging extra fees somewhere else – negating any saving made on the reviews.

When you’re considering cost, make sure you get the full picture before making a decision. And then ask yourself what price you would put on the motivation and engagement of even one key member of staff. We think that’s priceless.

[Tip: Find out about any hidden costs before making a decision. Free or cheap services may end up costing more later.]

(This article first appeared on the Engauge blog)

Photo Credit: Roby72

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