What is Employee Net Promoter Score and how to optimize it?

What is Employee Net Promoter Score and how to optimize it?

It is increasingly becoming important for employers to increase employee engagement in the organisation. But how does one go about measuring employee engagement in the organisation? One of the most reliable ways to gauge whether your employees are happy and performing well in the organisations is by calculating the eNPS or Employee Net promoter score.

What Employee Net Promoter Score means:

Net Promoter Score, commonly known as NPS is a metric used to measure customer loyalty. This method was developed by Fred Reichheld, Bain & Co. and Satmetrix in the 1990s and presented the method in the book, The Ultimate Question.

Companies with have high NPS (source)

  • Tesla – 97
  • Amazon – 61
  • Samsung – 45
  • Apple – 55
  • Playstation – 75
  • Jeep – 59

The method was later modified to also measure employee loyalty by organizing them into promoters, passives, and detractors with the question “How likely are you to recommend this company to a friend or relative?” Employee Net Promoter Score is an ongoing process that asks employees for their opinion and delivers actionable results for continuous improvement.

Components of eNPS

Promoters 9 – 10 : Employees who like the company will most likely recommend it to others

Passives 7 – 8 : Employees who are satisfied with what the company provides but not overly enthusiastic.

Detractors 0 – 6 : Employees who hate the substandard work culture  and who are unlikely to continue working there or even recommend it to their friends.

 

Employee Net Promoter Score can be as low as – 100 where everybody is a detractor or it could go higher than +100 where everybody is a promoter. Any score higher than zero is considered good whereas anything higher than 50 is considered as an excellent score.

 

NPS vs eNPS- Understanding the difference between the two terms:

Feedback received from NPS is usually associated with a particular customer whereas eNPS data is sought anonymously not unlike most employee satisfaction surveys. Thus there is lower traceability of eNPS which at times makes it difficult to determine what were the effects of corrective measures taken in previous surveys.

Employee Net Promoter Score (eNPS) is calculated by subtracting the percentage of detractors from that of promoters. Note that the passives from the study do not have any effect on the overall eNPS score.

eNPS = % Promoters – % Detractors

For example, consider a product development startup of approximately 100 employees where they are asked the standard question, “How likely is it that you would recommend this company as a place to work to your friends or family?”

Positive (Promoters): 47 employees

Negative (Detractors): 31 employees

Maybe (Passives): 22 employees

In this case, eNPS = 16% which can be considered as a good score and highlights that your workforce is positive. Higher the score gets, the more likely your employees will be committed to your company and find their work is fulfilling. 

The popularity and implementation of NPS is high, while that of eNPS is still very low. Many employee satisfaction or work environment studies still use a number of questions that are generally more robust than NPS systems and cover many more essential areas of the organisation.

eNPS results are generally lower than those of NPS. They are usually in negative values whereas NPS evaluations are mostly positive or at least closer to 0. Evidently employees tend to demand more from their employers in comparison with what customers demand from the company. Here it is important to consider the fact that the emotional involvement of a person in their daily work is far greater than that what is attributed to the use of products and services, which are generally used less frequently in comparison to working life.

How to optimize eNPS?

Conducting regular surveys

In addition to the employee Net Promoter question, management can also conduct additional surveys on a regular basis throughout the year. This way they can be better equipped to fully comprehend what are the main factors that contribute to the score. They can also determine what steps need to be takes for increasing employee satisfaction. These surveys should be highly focused and driven so that you will get as accurate feedback as possible. From time to time make some small changes to the these surveys, as it could potentially lead to a significant increase in your NPS.

Identify grievances of detractors:

Detractors should not be frowned upon (although it is difficult to identify them) as their feedback can prove to be very valuable. Another reason why companies to build a culture of continuous feedback. The management needs to determine why they are dissatisfied with the company and what steps can be taken to change this attitude. To make the eNPS process more effective, it is necessary to ask these questions on a regular frequency. It could be monthly, quarterly, apart from the usual annual process. Keep the process anonymous so that employees are motivated to share most honest feedback without any hesitation or fear of retribution.