Your Employee Net Promoter Score Reveals All
By Bradley Wilson - February 14, 2019
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 sprung from 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 general HR consensus that a positive employee experience helps generate a positive customer experience.
Employee Net Promoter Score Pros & Cons
There are many good reasons to measure the eNPS. The primary positive is that it is a reliable proxy for engagement and experience in one question. (Tweet this!) It does not fully replace the typical four or five questions used to measure engagement but in a pulse scenario and for comparisons across groups or different points in time, it is a very 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 right direction. Other advantages include:
- Familiarity: Many managers have already used the NPS on the customer side and are bought in to 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 engaging 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.
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.
Interested in measuring your company’s eNPS?
The Perceptyx platform is optimized to accurately process and report eNPS data. Get in touch and let us show you how, when used to its full potential, the eNPS goes beyond just a measure: It allows managers to make better-informed decisions with greater speed and confidence.