The term Employee Net Promoter Score® or eNPS is seen increasingly often in company reports, but what is it and should you use it?
Since late in 2003, Net Promoter Score and the Net Promoter Score process have been used by an ever-increasing number of companies as a way to measure and improve customer loyalty. Recently, the concept has been extended by a number of organisations (Vodafone, Symantec, Atlas Copco, Holcim to name a few) to measure Employee loyalty and employee engagement.
In this post we’ll look at eNPS, what it is, how and why you might use it.
- The eNPS Question
- How eNPS is Calculated
- Employee NPS Methodology
- Why eNPS is Important
- Employee NPS Pros
- Employee NPS Cons
The eNPS Question
The eNPS question is based Net Promoter Score question but you substitute recommending the company’s product or services with recommending them as an employer:
How eNPS is Calculated
To calculate Employee Net Promoter Score you subtract the percentage of 0-6 responses (Detractors), from the percentage of 9 and 10 responses (Promoters) to the eNPS question in your survey. The 7 and 8 responses (Neutrals) are ignored.
The overall score is then between -100 and +100.
So, in eNPS parlance:
- Anyone that gave you a 0-6 is termed a Detractor;
- Anyone that gave you 7 or 8 is termed a Neutral; and
- Anyone that gave you 9 or 10 is termed a Promoter
Then, eNPS = Percentage of Promoters – Percentage of Detractors or put another way…
Employee NPS Methodology
Implementing eNPS is not difficult, that’s one of it’s key benefits.
Follow this list of steps and you’ll be surveying and gathering valuable input in no time.
Use an Automated NPS Data Collection Tool
Automated data collection is almost always a better option than manual data collection. Use an NPS management system that allows you to automatically collect and report on employee feedback.
Run Frequent, Short Surveys
The eNPS is a very simple and short survey which means you can administer it to employees more frequently and with less survey fatigue.
Monthly or quarterly surveys to employees on a revolving basis, i.e. survey 1/12 of employees every month, is an excellent way for managers to have their finger on the pulse and avoid survey fatigue.
Sharing Feedback in Real Time
In an eNPS system the emphasis is on sharing feedback as quickly as possible with managers and team leaders. The closer to “real-time” data managers have the data, the quicker they can respond with effective “tweaks” that can quickly make a difference.
Anonymity is crucial to guarantee to employees that the results will be used appropriately and not punitively.
Without absolute rigour applied to the confidentiality of results eNPS becomes a useless tool.
Why eNPS is Important
Employee NPS is an important metric for organisations based on two key assumptions:
Higher Employee Loyalty Leads to Lower Costs
Overall if a company can reduce involuntary employee turnover, then costs and productivity will improve. Many companies already target ways to reduce involuntary turnover as they know it reduces recruitment and training costs.
Employee NPS offers another tool to understand what employees are thinking and develop ways to drive higher employee engagement and lower employee turnover.
Higher Employee Engagement Drives Higher Customer Loyalty
There is a reasonable amount of research and empirical studies that show a linkage between happy employees, happy customers and increased profit.
eNPS enables the organisation to track and measure employee loyalty and make business changes to improve that loyalty.
Employee NPS Pros
There are a several of pros for using eNPS as compared to a traditional omnibus employee survey.
Easy to Understand and Ask
One of the key reasons that for the success of NPS is that it is easy for people to understand. This is also true of eNPS.
Most companies that track employee engagement use larger annual omnibus surveys. While this approach can give a very accurate reading it is often difficult for the staff in the organisations to interpret and action the survey results.
Lower Cost vs Propriety HR Question Sets
Compared to proprietary omnibus surveys, eNPS is less expensive to implement.
The basic question can be asked by any organisation and the analysis is simpler and easier to perform.
Consistency of Message
As the eNPS hooks into the same idea as NPS, it’s a natural extension for any organisation that is already using NPS to drive customer loyalty.
Can be Used in a Transactional Survey Format
Given an organisation of a large enough size, eNPS can be implemented in a transactional format.
This entails surveying employees at key points along their relationship with the company: hiring, performance review, start date anniversary etc. The benefit of performing the survey in this way is that the company receives a constant stream of feedback from staff.
Employee NPS Cons
Lack of Published Validation of eNPS Linkage to Employee Loyalty
Unlike the extensive set of research on Net Promoter Score there is currently little published validation of the eNPS linkage to employee loyalty.
This is not to say that no links have been identified, some companies are reporting a link between eNPS and other important KPIs:
Since quarterly tracking began, Celanese has seen its ENPS steadily increase, from -8% to -3% to 7% to 24%. Further, KPIs have also improved, with turnover dropping by half, for example.Celanese, Alan Maxwell, Vice President of Corporate Human Resources