eNPS: Keeping a Pulse on Employee Engagement

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Many companies moving into the international arena have stumbled because they didn’t understand the cultural imperatives of the territory into which they were moving.  But what about internally? In developing a growing, healthy and productive organizational culture, is employee engagement itself a cultural imperative? Almost everyone would agree that the answer to this question is yes.  And with the high cost of retention and a shortage of critical skill sets across many industries, engagement is key to retaining existing staff and recruiting new ones.

To measure this, we can look at the eNPS, or Employee Net Promoter Score.  The eNPS is designed to measure employee engagement and comes from the Net Promoter® Score (NPS), a tool developed by Bain and Company to measure customer satisfaction.  Both measurements have a single question that is asked of participants: to rank on a scale of 1-10 how likely they are to recommend a company’s products or services. Similarly, the eNPS asks employees how likely they are to recommend the company as a good place to work.

A key value with utilizing the eNPS is that studies have shown that it tracks closely with customer engagement.  By measuring both customer and employee engagement, a self-sustaining loop can be created whereby engaged employees drive customer satisfaction and customers drive employee engagement by reaffirming employees value perception of the company. This encourages them to repeat successful behavior and spur improvement.

Measuring eNPS

The Employee Net Promoter Score is obtained by ranking the responses to the question into Detractors, Passives and Promoters.  Any response of 6 or less is considered a detractor. Any response of 7 or 8 is considered a passive.  And responses of 9 or 10 are considered promoters. When the survey is complete, the score is determined by subtracting the percentage of detractors from the percentage of promoters.  Scores can range from -100 to 100 and generally a score of 10-50 is considered positive. Scores above 50 are rare and are considered excellent or best-in-class.

What it Takes

But what does a company need to utilize the eNPS and find value?  Companies should look at the underlying reasons for each of the classifications.  Adding context around the number can provide tangible solutions to increasing engagement.  

To determine the “why” and act upon it requires a foundation of a progressive culture at the top of the organization that is willing to listen and is committed to true employee experience management.  If executives and principals are not able to turn the responses into actionable cultural management initiatives, then the organization may not be ready. However, if top level management is willing to listen and to use it as a guide to improve the engagement and attitudes of the detractors, motivate the passives and to utilize the promoters as positive cultural drivers, then a company can find value and utility in the eNPS.

This is easier said than done and many executives and managers would be surprised at the statistics.  While 55% of companies have indicated that they want to be the best in their industry within the next three years, other studies have shown that as much as 59% of employees don’t consider their company a good place to work.  The gap indicates a disconnect and the value of the eNPS as a measure can at least provide a starting point for companies dedicated to improving engagement.

Benefits of the eNPS Score

Gallup has estimated that disengaged employees account for $250-$300 billion a year in lost productivity.  If used as a starting point, measured regularly, and acted upon proactively, the eNPS can give companies a global, high-level organizational view and a way to keep the pulse on employee experience sentiment to directly impact the bottom line.  It provides a simple way to shine the light on areas needing improvement but can also be used to shed light on positive trends among promoters that can be built upon to help bring net engagement up.

It can also be used as a tool for retention, recruitment, engagement and mission training.  A study from the University of Warwick has shown that happy and engaged employees are up to 12% more productive.  As a measurement, the eNPS then can contribute directly to profitability when companies use the data for initiatives to increase engagement.

Using the eNPS is also a fast way to gather data to act upon.  The shortness of the survey, largely built around the single question, helps prevent “Survey Fatigue” and increases the likelihood that people will respond.  It also does not intrude on employee time and is less of a distraction than lengthy surveys with multiple, and often confusing, questions.  Instead, the single question format focusses on a relevant question with an obvious value without “over-surveying” participants.

The eNPS as a Tool

So how effective is the eNPS?  While it is a simple and fast way for companies to establish a baseline of employee engagement, how effective the eNPS depends on how it is used.   It must lead to understanding the “why” and the results must lead to action. Here are a few “Reality Checks” to keep the use of the eNPS in perspective:

  • Use the eNPS as a Benchmark -  The eNPS is a quick way to gauge employee engagement, but it’s important to remember that it is only a snapshot in time and best used with previous scores to monitor the pulse on employee experience and sentiment.  As such, it should be considered a guide to discovering the “why” behind detractors, passives and promoters. If the score is captured as a baseline and then used consistently over time to map progress, then initiatives can be developed to address what is revealed in the drill down.  The score then becomes a way to measure the success of those initiatives as detractors and passives are pulled into the promoter category and improve net employee engagement over time.

  • The eNPS is Best Used with Other Tools – Since the eNPS is a benchmark, it is best used with other tools and within a system. Solutions cannot be promoted from a single authority source within a company.  For example, if the eNPS drill down reveals issues with benefits, then initiatives for improvement should come from Human Resources. If the issue is hours worked, scheduling, or excessive and unannounced overtime, the responsibility for resolution would probably lie with Operations.

Because the “why” will focus on specific areas within the company, employee engagement best practices would dictate that solutions be tailored to each functional area driving the “why”.  Deeper exit interviews and more comprehensive onboarding and mentoring can help guide incoming and exiting employees to strengthen engagement. Also, broader satisfaction surveys and higher-level management participation and team meetings can address the “language” barrier between departments or help understand the technology needed to unify vision and voice.  And external evaluations such as consultants or auditors can be utilized to shore up operational issues.

  • Realize that Initiatives May Vary and Change – If taken only once, the value of the eNPS is of no more use than taking it without understanding the “why” behind the score.  The reason is that initiatives and improvements in employee engagement will vary and change over time. A low eNPS score taken during a time of high growth and scale will require different improvement initiatives than a low score taken during times of contraction and economic recession.

  • Don’t Forget the Passives and Promoters – It’s easy to fall into the trap of focusing on a negative eNPS to the point that a company ignores that there are also promoters.  The drill down to “why” is just as important in building and growing employee engagement for things a company is doing right as it is for improving things that may need work.  Using the positives to build stronger and more formal initiatives can be used to improve overall score, whether low or high. The same is true of passives, who may be on the cusp of becoming a promoter save for a few programs to promote communication, mentoring or participation.

Building employee engagement is never easy.  But given the cost of employee retention and recruitment and the impact of employee engagement on productivity and bottom line company performance, building strong and healthy employee engagement is not just important.  In terms of company culture, it is a cultural imperative that can lift a company to the next level.

The eNPS is a great tool to establish a benchmark to understand where to begin.  Alone, it is a static measure, but one which can set the stage to move the needle for engagement through use with other tools to develop initiatives to win over detractors, bring passives into the fold and shore up and increase the degree of promoters to develop a healthier culture and a high degree of engagement across a company.

Five to Nine’s platform uses eNPS as a quick, effective way of getting a pulse on employee engagement. Request a demo to find out more.