Employee Net Promoter Score: What You Need To Know | Perceptyx
Although managing fallout from the COVID-19 pandemic is currently at the forefront of business leaders’ attention, we continue to look forward to the day when normalcy returns. Many of the observations in the following article are applicable to employee listening strategies during the pandemic, but if you are interested in learning more about organizational response specific to COVID-19, there are several articles on our blog with insights about helping employees navigate this unprecedented situation.
Over the past 10 years, a number of companies have adopted the Employee Net Promoter Score, or eNPS, as a metric for employee engagement. The eNPS has gained popularity because it can provide a reliable indicator of engagement levels with just two questions, making it fast to administer and with some explanation, easy to interpret.
The eNPS is a descendant of the original Net Promoter Score or NPS concept, first introduced by Frederick Reichheld in 2003 (The One Number You Need To Grow, Harvard Business Review) as a measure of customer satisfaction and loyalty. Over the past 15 years, the NPS has been adopted by over 70% of Fortune 1000 companies to measure customer referral behavior.
After Apple began measuring NPS in 2007, the company realized that employees who were promoters of Apple were more likely to be able to convert customers into promoters as well, and the employee Net Promoter Score was born.
Curious about your company’s eNPS? The Perceptyx platform is designed to accurately measure and report eNPS data as well as standard engagement metrics. Sign up for a demo today.
What exactly is the employee Net Promoter Score?
The central question both the NPS and the eNPS seek to answer is about referral behavior. NPS asks: How likely is it that you would recommend [company X] to a friend or colleague? The idea behind the question is that a person who is willing to recommend is not just a user, but also a promoter. Companies with the highest customer satisfaction, loyalty, and lifetime customer value numbers, such as Apple, USAA, Costco, Starbucks, and Target, all have very high Net Promoter Scores.
The employee Net Promoter Score tweaks that question to gauge workers’ sentiments about their employer: How likely is it that you would recommend [company X] as a place to work? Just as the NPS helps inform a company’s unique value proposition and brand positioning to build connections to customers, the eNPS can help organizations shape their employee value proposition and improve their employer brand. They can then apply these concepts to build emotional connection, commitment, and loyalty among employees.
Both the customer-centric NPS and the employee-focused eNPS ask respondents to gauge their likelihood to recommend a particular company on a zero to ten scale, and typically include a second question: Why did you give this response? The second question provides qualitative data to explain the quantitative score, offering explicit information about where and how the customer or employee experience can be improved.
Understanding Employee Net Promoter Score Methodology
What’s unique about both the NPS and the eNPS is the finer grain of the measure, which is a product of the methodology. Unlike the standard five-point scale of “strongly disagree” to “strongly agree,” NPS and eNPS measure responses on an 11-point scale, where zero equals “would not consider recommending” and 10 equals “would absolutely recommend.” Responses are then converted through the process detailed below to yield a score on a 201-point scale.
How the eNPS is calculated:
Once the results are tallied, responses are broken into three groups:
The overall score is derived by subtracting the percentage of total respondents represented by detractors from the percentage who are promoters. The final score will fall somewhere between -100 (all detractors; no promoters or neutrals) and 100 (all promoters, no detractors or neutrals). An equal distribution of promoters and detractors yields a score of zero, since neutral responses are disregarded.
% of total respondents as promoters - % of total respondents as detractors = eNPS
Typically eNPS scores will be higher than NPS scores due to the closer relationship employees have with the company. Organizations that use both the NPS and eNPS usually see a positive correlation between the two measures, validating Apple’s insight that employees who are promoters are more likely to influence customers to become promoters as well. This synergistic relationship between the eNPS and the NPS also supports the service-profit chain model: a positive employee experience helps generate a positive customer experience.
Employee Net Promoter Score Pros & Cons
There are many benefits of measuring employee net promoter score (eNPS). The primary one is that eNPS is a reliable proxy for engagement and experience in one question—it can help leaders see what matters. (Tweet this!) It does not fully replace the typical four questions used to measure engagement but in a pulse scenario and for comparisons across groups or different points in time, it is a helpful metric. Research shows concurrent validity between the eNPS and more thorough engagement indices, so it’s a good measure in terms of pointing leaders in the right direction. Other advantages include:
- Familiarity: Many managers have already used the NPS on the customer side and have already embraced the concept; this can make the eNPS easier to introduce.
- A fine scale of measure: The broad range of scores allows nuances between groups and change over time to be seen more clearly.
- Both quantitative and qualitative data: How likely are you to recommend the company as a place to work? and Why did you give this response? provide a measure and a comment to pinpoint what’s going right and what’s going wrong, for fast and easy-to-answer pulse surveys.
- Opportunity for dialogue: Whether the eNPS score is going up or down, it provides an opportunity for discussion. Because eNPS data can be collected and analyzed quickly, discussion and action can begin sooner. This allows faster intervention in problem areas and faster identification of successful innovations to share across the organization.
There are a few potential drawbacks to using the eNPS, but they fall mainly in the category of pitfalls that can be avoided or managed. These include:
- Overemphasis on score: Obsessing on a number may cause leaders and managers to overlook what the number represents and why it is what it is. If there’s too much focus on the number, they may lose sight of understanding and fail to engage in the retrospective of why the number went up or down. Focus instead on qualitative research to identify what leaders should be doing.
- Questions about methodology: Some have questioned whether those who give a seven or eight response are really neutrals, or if sixes are detractors. These are essentially unanswerable questions, but if you flip them around to ask, “Would I recommend a company if my experience with them was only 70–80 percent positive?” it seems reasonable. In any case, don’t tinker with the scale; otherwise you won’t be able to make apples-to-apples comparisons.
- Excludes more reliable predictors: A full engagement index will ask about intent to stay—which is the best predictor of voluntary attrition/retention—and intrinsic motivation, which predicts higher performance. The eNPS approach to engagement does not include these concepts which are often central to an organization's engagement and people strategy.
- Over-frequency of measurement: If the eNPS is measured too frequently, some managers have a tendency to postpone making changes to see if trends hold. Instead of using the available data to make adjustments, they kick the can down the road thinking things may get better on their own.
- Influence by variables outside the scope of survey: Without qualitative information, it can be confusing if the eNPS is going down but everything else is trending up. Comment data can often clear up confusion. As with all other types of surveys, eNPS measurements need to be well-designed to provide clear data.
- Confusing NPS with eNPS: eNPS scores tend to be higher than NPS scores; comparing your eNPS to another company’s NPS can lead to incorrect conclusions because the two measures are not equivalent.
- Difficulty in integrating eNPS data with other survey data: Because the eNPS is ranked on an 11-point scale and uses a different methodology in the calculation of the score, it can be difficult to integrate with other survey data, which is often scored on a five-point Likert scale. There are survey providers who offer stand-alone eNPS software; while this software may provide good information in regard to the eNPS score, its value is limited because it cannot easily be linked to other survey data.
If you want to measure the eNPS in your organization, make sure your survey provider can process the data correctly.
When included in a broader survey, responses to the eNPS can be compared side-by-side across all survey items to find correlations between responses from promoters, detractors, and neutrals—but because eNPS data is scaled and calculated differently than standard engagement metrics, the survey platform must be designed to accommodate it. The Perceptyx platform can integrate eNPS data with other survey data, allowing correlations between eNPS scores and other survey responses to easily be seen—making the platform a better solution than stand-alone eNPS software.
What is a “good” Employee Net Promoter Score (eNPS)?
eNPS scores vary widely across industries. In the Perceptyx research database, the overall eNPS benchmark is 12. This aligns with other reports that place the average eNPS at 14 across all companies collecting employee data that measure eNPS.
That may sound low, but keep in mind that eNPS is the measure of the percentage of promoters minus detractors, and that an NPS between zero and 30 is considered good. An NPS higher than 30 indicates the company is doing great, and has far more happy customers than dissatisfied ones. An NPS of 70 or more indicates that your customers love you and your company is generating positive word-of-mouth and many customer referrals.
While eNPS scores are generally higher than NPS scores, these NPS ranges underscore how different the scale for measuring NPS and eNPS is from most survey scales; a zero indicates at worst an equal balance between enthusiastic and dissatisfied customers or employees, or may indicate a lack of both.
The eNPS is primarily used in industries where the NPS is used. Our database includes eNPS benchmarks for the following industries:
- Telecommunications: 27
- Manufacturing: 13
- Information technology: 26
- Healthcare: -6.5
Although the eNPS benchmark average for tech companies in our database is 26, many tech companies have eNPS scores of 75 or higher. Just as with the NPS, a score in this high range means that the company’s employees are spontaneously speaking positively about the organization and are more likely to be referring customers—as well as “recruiting” other talented individuals to join the organization.
Curious about your company’s eNPS?
The Perceptyx platform is optimized to accurately process and report eNPS data. Our consultants can help your company incorporate eNPS data into an employee life cycle survey program coupled with an analytics engine that allows you to collect data easily and report on it instantly. Get in touch and let us show you how, when used to its full potential, the eNPS can help your organization see more clearly.