NPS and eNPS: A quick history
Employee Net Promoter Score (eNPS) is the human resources cousin of Net Promoters Score (NPS), a metric first introduced by Bain and Company in 2003 to measure customer satisfaction by asking 1 simple question:
“How likely are you to recommend (product/service/company) to your friends and family?
Apple later started using this same system to measure the engagement and loyalty of their employees to the company, surveying staff every four months to find out if they would recommend Apple as a place to work.
What is eNPS?
eNPS measures loyalty, which is basically a combination of how a staff member is feeling in their role and whether they feel the company is looking after them. It’s a pretty good proxy for employee engagement (which can be rather involved and complicated to measure in comparison to eNPS).
Why measure eNPS?
Think about it, your staff literally are your business. At the back end they crunch the numbers, create the strategies and produce the product. On the front end they answer the phones, respond to emails and interact with your customers face-to-face whether they’re waiting tables or presenting a case in a court of law.
So it makes sense that if they’re happy, your customers are more likely to be happy. And if you work on enhancing employee happiness and satisfaction, the results will show in your product or service.
From a business perspective, the objective of eNPS is to transform a large number of responses measuring employee loyalty into a single score that depicts what’s happening in that organization at an employee level.
How to measure eNPS
Working in human resources, chances are you measure a variety of metrics to gauge employee satisfaction in some way or another, whether it’s through a yearly engagement survey, wellness checks or eNPS itself (and intelliHR has a bunch of employee engagement tools to help you measure, report and automate these!)
So what’s the difference between satisfaction and eNPS and should you measure both?
Employee satisfaction measures employee happiness on an individual, micro-level by asking “how happy are you in your role?”.
eNPS, on the other hand, measures employee engagement at a macro, whole-of-business level using a standardized, validated scale.
The employee satisfaction metric is still really important to measure but, as it is done on a more regular basis and asks an employee about their personal level of happiness, the responses can be impacted by a range of different factors.
Say for example, if a team member has had a particularly heavy workload of late, their happiness rating might go down temporarily. Or, if they just got a pay rise, it might go up. Their happiness at work can even be impacted by external factors, like if they are tired or having difficulties at home.
These fluctuations in happiness for an individual are important, because as a HR manager or team leader I want to know how each of my team members are tracking and when they’re not feeling great. But on a macro level, this variability can create ‘noise’ which impacts the validity and reliability of the scores as a whole-of-business measure.
“Happiness scores change day-to-day, whereas overall loyalty to a business stays fairly stable regardless of whether you’ve had a couple of bad days or a temporarily large workload. But if bad days or a big workload continues over a long period of time, then there would be a trend that eNPS will identify.”
Furthermore, each individual will respond to the question “how happy are you in your role?” differently depending on their interpretation of what ‘happiness’ is.
For example, when Raphael is feeling really happy he might rate himself as a 10, whereas when Hayley is feeling the same level of happiness, she might call that a 7. So, although a 7 for Hayley is normal, if Raphael drops to a 7, this is cause for concern as it’s a three-point drop from his ‘normal’ happiness.
Lastly, in intelliHR organizations can choose to use the default happiness question, or customize it to suit their own voice or business. In this way, the satisfaction score is not comparable across staff members nor does it give a reliable measure of happiness across your organization or in comparison to others.
eNPS on the other hand, asks a more objective question that isn’t anchored to the organization or individual. This provides reliable, standardized insights across the whole business and allows you to directly compare your eNPS score with other businesses, meaning you can benchmark against others in your industry.
Now to the actual calculations…
eNPS is calculated exactly the same as NPS. It asks the same ‘golden question’ as NPS, only formulated for employees:
“How likely are you to recommend [business name] as a place to work to your family and friends?”
Employees respond on a ten-point scale where 1 is not happy and 10 is satisfied. All of the responses are then divided into three groups based on their scores:
- 9-10: Promoters – employees who are more likely to speak positively, or promote the organization to others
- 7-8: Passives – neutral employees
- 0-6: Detractors – employees who are more likely to speak negatively about the organization
The eNPS is calculated using the following formula:
Employee Net Promoter Score = % of Promoters minus % of Detractors
Your business’s score final score will fall somewhere between -100 and +100. Let’s take a look at an example to explain.
In the case above, we’ve got 44 promoters, 45 passives and 21 detractors out of a total of 110 responses. So our eNPS would be calculated as follows:
Percentage of promoters: 44/110 = 40% Percentage of detracted: 21/110 = 19%
% of promoters (40) – % of detractors (19) eNPS = 21
So what does this mean exactly? Glad you asked.
What’s a good eNPS score?
Once you’ve found your eNPS score you’re probably going to want to benchmark it to figure out how you’re performing.
Depending who you ask, scores in the 0-30 range are pretty safe, and anything above 30 is considered very high. For example, recent eNPS scores for Lowes was 5, Sears 9 and Home Depot -5.
Although you can use eNPS to benchmark against other organizations, it is best compared to yourself and your own performance. Be mindful as well if you operate across different countries, as some cultures tend to rate things differently to others.
eNPS questions: Asking a follow-up question
Asking a question to follow up the 1-10 rating allows employees to provide more information about why they gave that particular score, and gives HR more detail, should they need to follow up.
In intelliHR we ask:
“What’s one thing we could do to make you happier at work?”
Some other examples you might like to consider include:
- What is the main reason for your answer?
- Please provide any additional feedback about things you think we’re doing well, or not so well
- What’s one thing we could improve as an employer?
- What would you recommend about this company to other people?
As a guideline:
- Keep your question brief
- Use open-ended, rather than closed questions
- Stick to 1, maximum 2 follow-up questions.
How often should a company do eNPS?
No more frequently than every 3 months. This helps to remove the noise and fluctuations we mentioned before that can arise when measuring employee happiness.
If you do it any less frequently, say once a year, you risk over-smoothing your data and not being able to pull out proper insights. We recommend doing eNPS quarterly as it’s aligned with natural business cadences and reporting periods.
So you’ve got a bad ENPS score, what next?
Best practice is to focus on your detractors, which is anyone who scores less than 6. Here’s what to do:
- Find out what your detractors are saying about your business (which is why that second question is vital to ask).
- Work through and address their feedback.
If you aim to improve the experience of your detractors, then everyone else will benefit too. Take one of our clients in the health services industry for example. Through examining their detractors they identified that there was a problem with the quality of chairs. By investing a small amount of money in replacing the chairs, they demonstrated to these employees that they had listened and cared about them. And the other employees who weren’t complaining about the chairs benefitted too!
Another company had always thought that their employees in the capital city were the most engaged, as that’s where the head office was located, but they were surprised when the eNPS revealed that they were, in fact, the least loyal.
In essence, eNPS provides a really simple way of quantifying and validating assumptions you make about employee experience and allows you to gather data to drive decisions and action.
Tip: Close the loop! Don’t forget to follow up once you’ve made changes with a repeat eNPS to see if there are measurable improvements or what else you could be doing to improve the employee experience.
Watch next: understanding your eNPS results.
Downsides of eNPS
One criticism of eNPS is that someone who scores 0 is very different to someone who scores a 6 in terms of their sentiment towards the business, yet in eNPS everyone between 0-6 is considered a detractor.
Many eNPS tools only provide data on the detractors as one single group; however, in intelliHR you have the ability to separate and drill down on each detractor group, so you can see what differentiates the 0s from the 1s, 2s and so on.
eNPS provides a quick, easy and powerful way to get an idea of what’s happening in your business.
Getting employees to sit down and do an engagement survey that takes 30+minutes can be a costly exercise in terms of their time away from work, and the time it takes HR to follow up to make sure the surveys are done (you know what I’m talking about). eNPS typically has a higher response rate as it’s two very simple questions. It’s a low cost, low effort, high benefit exercise.
That being said, there is still a place for more detailed questions that take a deep dive into engagement levels, as eNPS can miss some things, so we recommend doing eNPS in combination with more regular wellness checks to get rich, detailed data that offers a full picture of your business.
Want to see what the eNPS of your organization is? Run a free eNPS survey with intelliHR.
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