What the Employee Net Promoter Score is
The Net Promoter® Score (NPS®) is a measurement technique trademarked by Bain & Company, Satmetrix Systems, Inc., and Fred Reichheld in 2003. It is designed as a way to measure customer loyalty by organizing customers into promoters, passives, and detractors with the question “How likely are you to recommend this company to a friend or relative?”
The employee Net Promoter Score (eNPS) is a concept that builds off the NPS system, allowing employers to measure and get a snapshot of employees’ willingness to be ambassadors for the company by advocating employment there. By asking a variation of the question “On a scale of zero to ten, how likely is it that you would recommend this company as a place to work?” you are able to segment employees into promoters, passives, and detractors.
Promoters (those that answered 9-10) are the most loyal segment who will enthusiastically recommend employment at a company. Passives (those that answered 6-8) are those that are not necessarily negative, but are also not entirely loyal. Detractors (those that answered 0-5) are those that are not likely to recommend employment at the company, and it’s important to get to the bottom of why.
How eNPS is measured and calculated
The employee Net Promoter Score is calculated by subtracting the percentage of detractors from the percentage of promoters. The passives have no effect on the eNPS score.
In order to optimize the employee Net Promoter process, the question should be asked on a regular frequency: monthly, quarterly, or annually. Further, responses must be anonymous to gather the most honest feedback.
The limits of Net Promoter scores
Net Promoter scoring has come under some scrutiny in recent years, much of it because companies may depending on it to measure aspects of business and culture that it can’t measure. CultureIQ Principal Strategist Paul Mastrangelo explained the shortcomings in a recent Recruiter article:
“The question at the core of the NPS itself is valid, but research has shown that it’s not any better than traditional customer satisfaction questions. Neither the scoring technique nor the question itself provides an advantage in predicting business outcomes. In fact, asking just one question about willingness to make a recommendation provides a measure that is too narrow to predict customer retention or increased purchasing. The NPS’s limited scope is much better suited for predicting brand advocacy, if anything.”
The eNPS also suffers from similar misuse, Mastrangelo said. “If your company’s biggest problem is recruiting new talent, then eNPs will be a very helpful metric, because you are asking workers if they would recruit for you. Talent acquisition, however, is rarely the change with the most potential to improve an organization.”
Go Beyond the eNPS to measure culture
The eNPS should be combined with additional surveys throughout the year to fully understand what factors contribute to the score itself and what steps you can take to strengthen employee sentiment. This is part of a larger culture-management process that we call our Culture Approach.
While the eNPS can’t comprehensively measure culture or employee engagement, it can be a useful metric for employee loyalty and retention. If an organization is looking to track culture, and the culture outcome of engagement more holistically, it should consider establishing a measurement framework such as CultureIQ’s, which measures aspects of culture that propel business growth, such as dignity, purpose, collaboration, curiosity and agility.
The culture connection
There also many studies that draw a connection between culture, employee engagement, customer satisfaction and organizational performance. CultureIQ’s research shows that companies with top quartile engagement levels had twice the shareholder value and nearly three times the profitability of companies with bottom quartile engagement. Analytic projects with our clients have found engagement and other job attitudes and perceptions predict customer satisfaction, turnover, and sales growth.
Finally, like with all surveys, sending the survey is only the first step. What happens after (the communication, the follow-up questions, the action steps taken) is what has the power to improve your eNPS, employee engagement, and most importantly, the culture that underpins all of these outcomes, going forward.
Learn how CultureIQ helps you improve your organization’s engagement, agility, and alignment. Schedule a discovery call today.