For a long time, the biggest issue of concern for companies was the loyalty and satisfaction of their customers. In recent times this concern has expanded to include and prioritise the loyalty of their employees.
Loyal employees are reported to be more productive, to positively affect co-workers and deliver a better customer service experience. For this reason, companies work hard to measure, maintain and increase the loyalty of employees.
The Employee Net Promoter Score (eNPS) is a tool that helps companies to measure the loyalty, engagement or satisfaction levels of their employees.
In this article we explore:
- How the eNPS works
- Benefits of the eNPS
- Its shortcomings and how to overcome them
- Deeper insight into the 3 categories (Promoters, Passives and Detractors)
- How companies can get the most out of the eNPS
How does eNPS work
The employee Net Promoter score (eNPS) is derived from the Net Promoter Score (NPS) which was developed by business strategist Fred Reichheld.
The NPS asked only one question in order to determine how loyal customers were to an organisation; “On a scale of 0 to 10, how likely are you to recommend our product or service.”
The responses collected would help companies know just how well they ranked with customers.
Like the NPS, the eNPS, asks employees one question: “On a scale from 0-10, how likely are you to recommend our organisation to your family or friends?”
The answers collected are divided into three categories:
- Promoters – These are employees who score 9 to 10. They are highly engaged, are resilient in times of uncertainty and will gladly share positive stories about the company.
- Passives – These employees score 7 to 8 on the scale. They are not unhappy but neither are they happy. While they are not included in calculating the score, they should not be ignored either.
- Detractors – These are employees who score from 0 to 6. They are very dissatisfied and would easily speak negatively about the company.
The Employee Net Promoter Score is calculated by subtracting the number of detractors from the promoters, dividing the result by the total number of respondents and multiplying the result by 100.
In other words; the number of promoters minus number of detractors divided by the number of respondents, multiplied by 100.
Benefits of using the eNPS
Hundreds of companies have embraced the eNPS as a measure for employee loyalty and engagement because it has numerous benefits.
It is short and easy
The eNPS only asks one question and lets respondents choose one answer. Because it is low on time investment, companies are likely to see a higher rate of responses than from other surveys. It is also not strenuous to administer and doesn’t require human resources or management to craft a long survey.
It is cost effective
The eNPS is a much more affordable method of checking employee engagement. It doesn’t require bringing in external consultants to conduct it, nor does it require heavy software fees.
In addition, it can be used repeatedly to measure sentiments and reactions to changes in policies without incurring additional costs.
It reveals employee satisfaction
Employee satisfaction and engagement can mean a lot for a company’s bottom line. Engaged employees perform better, support and reinforce positive company culture and are likely to stay with companies longer, reducing turnover rates.
With knowledge of their eNPS score, a company takes one step closer to finding out what they can do to improve engagement.
This type of bottom up communication that solicits information from the employees can also improve morale by showing employees that their opinions are valued.
It can help to improve employee retention
A low level of employee engagement can lead to numerous employees leaving the company. According to a study by The Society for Human Resources Management, it can cost a company as much as 9 months of the former employees’ salary to recruit and on board a replacement.
In addition to a high turnover rate being financially costly, it has an effect on the morale of the employees who stay on. They may have to bear the burden of a heavier workload or have to take on tasks they are not skilled at until the company replaces the staff who left. By acting on the results of the eNPS, a company can make improvements that can see an increase in employee retention.
It is anonymous
The eNPS allows employees to answer honestly while remaining anonymous. Companies should take care to keep their eNPS tests confidential. This way, employees can answer without fear of ramifications.
How to conduct an eNPS survey
Whoever is in charge should know how often the test will be conducted and make sure it is sent out to employees. While some companies stick to email, others post the survey on message boards to make sure employees can see and respond to it quicker.
Send a reminder
Even though the eNPS is really short, just because employees received the email, doesn’t mean they acted on it. A reminder will be helpful in getting more responses in. The more responses you get, the more data you will have to work with.
Get support from upper management
This has two benefits, it will encourage staff to respond to the survey and it will show employees that their top leaders are invested in initiatives to improve wellbeing. The latter can have a positive effect on engagement.
The shortcomings of eNPS and how to overcome them
As much as the Employee Net Promoter is popular with companies, it has been criticised for falling short in certain areas. Fortunately there are ways companies can overcome those short comings and still reap the benefits of the eNPS.
Lack of a universal range
While an eNPS score can range anywhere from -100 to 100, there is no standardised measure for what is a good or bad net promoter score. 10-30 is considered good, while 50 is considered excellent. –10 is considered poor. Because of this, companies might not know how to react and instead look at the scores of other companies to gauge how they are doing.
How to overcome this:
Companies are better off setting their own bench marks. There are a lot of differentiators in companies, even those in the same industry. Measuring your company against a competitor’s benchmark might not reveal helpful results.
For instance, geographical locations and the median age of employees might be what makes your results look different from a competitor. By setting their own standard, a company can work to improve their score using their own previous results as a benchmark.
It is too narrow
The eNPS only asks one question. As a result it has been criticised for being too narrow a measure of employee engagement.
How to overcome this:
To get more meaningful results, schedule the eNPS to happen more than once a year. This way, companies can see trends in employee engagement across the year.
While still remaining anonymous it can reveal insights about how employees’ engagement has changed from the time they were recruited to the present date. It can also be conducted by department and show which workers are more engaged and where management needs to do some work.
It doesn’t show the Why
The results obtained show how engaged or loyal employees are, but they do not show why. Because of this, the eNPS has been criticised for not having actionable information.
While knowing that many employees are engaged, you might struggle to pinpoint how to keep them that way and aid those who are not.
How to overcome this:
Pair the eNPS with other surveys or metrics such as; external evaluations, satisfaction surveys and performance metrics.
The eNPS can work very well if paired with other metrics or survey questions. Without losing out on the benefit of the method being brief, there can be 2 or 3 follow up questions. For instance, after an employee gives their rating, they can be asked to explain why they chose that rating.
A third and final question might ask them to share feedback on what the company can do to improve their engagement.
A deeper look at the three categories.
If paired with another survey, or other metrics, companies can gain a deeper understanding of the employees in each of the 3 categories.
They are not only engaged at work, they have a positive effect on the morale of their co-workers. Because of this, managers might run a risk of ignoring them because everything ‘seems fine.’ But the employee Net Promoter Score is not a one-off survey.
Companies should seek to find out why the promoters are happy and work to maintain that in order to maintain their positive employee loyalty ranking. Insights gained from promoters can also be used to improve the engagement of other employees.
Their scores are not taken into account when calculating the eNPS but this doesn’t mean they cannot provide valuable follow up information. Passives being on the edge means that they can easily be tipped into being detractors or promoters.
In some cases, their neutrality can be a danger signal as they might have wanted to give a lower rating but opted to be nice and gave a higher one.
The Passive category can be more critical than detractors because while detractors will openly share what is wrong, passives might take on an ‘I don’t care attitude’. Open ended follow up questions will allow your passives to share openly (and anonymously) about why they selected the score they did.
Like Bill Gates said, your most unhappy customers are your greatest source of learning. This can be translated to your employees as well. It is imperative to conduct post eNPS surveys to get to the bottom of the detractor scores. Anecdotal evidence suggests that an employee will have a clear reason for why they gave a very low rating.
Ask them the reason why and ask what you can do to fix it. It is also important to act on the feedback given or implement the solutions suggested. Left unattended, detractors can easily turn into toxic employees. These can negatively affect both the bottom line and productivity of other employees.
How to get the most out of the eNPS
Share results with managers
Once the survey has been done, do not keep the results a secret. Avail all data to managers and the people in charge of employees. This will better enable them to come up with and implement solutions.
Share the results with employees
While some companies do not go this route, sharing survey results with employees will make them feel more like partners, not just people told to do something. This will also encourage them to participate on the next round.
If need be, follow up with a more detailed survey
Don’t be afraid to come back and explain to employees that because of the results you got, you are seeking more information. Once they know why you’re doing it (trying to improve their engagement) they are more likely to participate. The more data and responses you get, the better.
Act on the results
The results are valuable only if the company does something with them. Simply knowing how you rate is not enough. Steps should be taken to either improve the score or maintain it.
One of the best ways to get the most out of an eNPS is to do it more than once. Repeating the test, as mentioned, will show you trends and thus give you more meaningful data.
An Employee Net Promoter Score helps companies gauge the rate of employee loyalty by asking them how likely they are to recommend the company. The results that are scored on a 0 to 10 scale can reveal how many employees are promoters, detractors and how many are passive.
With these results, employers are better able to implement changes to improve their employee loyalty and engagement. While the biggest draw of this survey is that it is brief, it has been criticised for the same reason. In order for companies to reap all the benefits, they are advised to pair the eNPS with other metrics.