The Employee Net Promoter Score: The What, the Why, the How
What the Employee Net Promoter Score Is
The Net Promoter® Score (NPS®) is a concept pioneered and trademarked by Bain & Company, Satmetrix Systems, Inc., and Fred Reichheld. 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 employee loyalty and engagement within their company. 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 7-8) are those that are not necessarily negative, but are also not entirely loyal. Detractors (those that answered 0-6) are those that are not likely to recommend employment at the company, and it’s important to get to the bottom of why.
Update: As of August 2016, CultureIQ made some changes to how we calculate the employee Net Promoter Score based on our survey data. Read about the important changes here.
How It’s 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 employee Net Promoter question 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 process that we call culture management.
What It Means
The employee Net Promoter Score is by no means a comprehensive way to measure employee engagement. Instead, it serves as a useful metric to track at a regular frequency over time.
There are many studies that draw a connection between employee engagement and customer engagement. One example is Gallup’s State of the American Workplace, which reports that companies in the top quartile of employee engagement have 10% higher customer ratings.
According to the same study: “When organizations successfully engage their customers and their employees, they experience a 240% boost in performance related business outcomes compared with an organization with neither engaged employees nor engaged customers.”
Therefore, when you pair eNPS with NPS, you have two powerful metrics to track, understand, and strengthen.
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 company culture going forward.