Understanding eNPS

eNPS is an acronym for Employee Net Promoter Score and is commonly used in employee engagement surveys. In this post we explore the concept of eNPS, how to calculate it, and how to use it in practice.

The purpose of eNPS

The concept of eNPS emerged from the success of NPS in evaluating customer satisfaction. Organisations recognised that the same principles could be applied internally to assess employee engagement and satisfaction.

By understanding employees’ sentiments, companies can identify areas for improvement, enhance workplace culture, and ultimately boost productivity and retention.

The thinking is that if employees would recommend their organisation as a great place to work, they are more likely to be satisfied and engaged.

As such eNPS can be used as a single metric to provide an overall measure of employee engagement and it is now an important part of analysing employee survey data.

How is eNPS calculated?

To determine eNPS, we actually use one of four approaches:

1. The simplest method, and arguably the purest, is to include the question “I would recommend the company as a great place to work” in your employe survey. We then use how people respond to this question to calculate your eNPS.
2. The second approach is to use other ‘outcome’ questions in the survey as part of the measure. Examples include “I am proud to work here”, “I can see a future for myself working here” etc. We call them outcome questions because how people respond to them tends to be based on how satisfied they are with all of the other measures you might include in an engagement survey.
3. The third approach is to take a more research-based approach by looking at which survey questions appear to be driving employee engagement. To do this we run a correlation analysis to identify your engagement drivers. We still use the “I would recommend…” question as the basis for the correlation calculation, but we explore how the question correlates to all the other questions in the survey. For example, we might find that questions such as “I feel valued” have a strong correlation to how much people would recommend the company. Correlation does not imply a causal relationship, but it indicates that whether or not people feel valued has an impact on whether or not they would recommend the company to others as a good place to work. Using this approach means that we can define specific organisational behaviours to include in the eNPS calculation. The thinking is that if these questions all have a strong statistical linkage to engagement then it will increase the focus of the business on improving these specific engagement drivers.
4. The fourth approach is similar to the previous one, but it simply uses all of the survey questions to arrive at an overall net engagement score. It is the least scientific method, but it is easy to apply.

Whichever specific question is used to calculate eNPS, employees are categorised into three groups:

• Promoters: Highly satisfied employees who are likely to recommend the company.
• Passives: Employees who are neutral; they are satisfied but not enthusiastic.
• Detractors: Unsatisfied employees who are unlikely to recommend the company.

The eNPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters:

eNPS = % Promoters – % Detractors

The resulting score ranges from -100 to +100. A positive eNPS indicates more promoters than detractors, suggesting a generally satisfied workforce.

We tend to suggest that a ‘good’ eNPS is 60% or more. This is based on 80% of employees being advocates and 20% being detractors.

80-20=60%.

Of course, the ideal is 100%!

What are the benefits of using eNPS?

There are three core benefits to using eNPS:

Simplicity: The eNPS methodology is straightforward, making it easy to implement and understand.

Benchmarking: eNPS provides a clear metric that can be tracked over time to monitor changes in employee sentiment.

Actionable Insights: Regularly assessing eNPS can help identify trends and areas needing attention, allowing for timely interventions.

What are the limitations of using eNPS?

Limited Scope: eNPS focuses solely on the likelihood of recommending the company, which may not capture all dimensions of employee engagement. This is why we sometimes use a different way to measure eNPS.

Lack of Context: Without additional qualitative data, eNPS scores may not reveal the underlying reasons behind employee sentiments. As explained above, because ‘I would recommend…’ is an outcome, it is not possible to define the specific factors that are influencing it.

Potential Bias: Cultural differences and individual perceptions can influence responses, potentially skewing results.

Using eNPS alongside other business KPIs

eNPS is a versatile metric that can complement a variety of business KPIs. By integrating it into broader performance analyses, organisations can gain deeper insights into the connections between employee satisfaction, operational performance, and overall business success. This integrated approach drives more informed decision-making and strategic improvements.

Using Employee Net Promoter Score (eNPS) alongside other business Key Performance Indicators (KPIs) creates a more holistic approach to understanding organisational performance.

Here’s how eNPS can complement other KPIs effectively:

1. Linking eNPS to Employee Engagement Metrics

eNPS can be a leading indicator of employee engagement. Combine it with:

• Employee Turnover Rate: A declining eNPS score may precede increased turnover, helping to identify issues before they escalate.
• Absenteeism Rates: High absenteeism alongside a low eNPS may signal disengagement or dissatisfaction.
• Participation Rates in Initiatives: Compare eNPS scores with participation in training, wellness programs, or social events to assess the effectiveness of engagement efforts.

2. Connecting eNPS to Customer Satisfaction KPIs

Employee satisfaction often correlates with customer satisfaction:

• Net Promoter Score (NPS): Track how eNPS trends align with NPS. Happy, engaged employees are more likely to deliver exceptional customer experiences, improving customer loyalty.
• Customer Retention Rate: A motivated workforce, as indicated by a high eNPS, is typically better at building strong customer relationships, positively affecting retention.
• Customer Complaint Volume: Low eNPS may signal underlying issues that could lead to increased customer dissatisfaction.

3. Integrating eNPS with Operational Performance KPIs

Employee satisfaction impacts overall productivity and operational outcomes:

• Productivity Metrics: Compare eNPS scores with productivity metrics like output per employee or project completion rates. Low eNPS may indicate challenges affecting performance.
• Quality Metrics: Track correlations between eNPS and quality defects or errors. Disengaged employees may contribute to higher rates of mistakes.
• Innovation Rates: Positive eNPS often fosters a culture of innovation, reflected in the number of new ideas, patents, or process improvements.

4. Aligning eNPS with Financial KPIs

Employee satisfaction can influence financial outcomes:

• Revenue Growth: Teams with high eNPS scores are often more engaged and productive, contributing to increased revenue.
• Profit Margins: Compare eNPS with profitability to identify how employee satisfaction impacts cost efficiency and revenue generation.
• Cost of Employee Turnover: High eNPS can reduce turnover costs, directly affecting the bottom line.

5. Using eNPS with Recruitment and Retention KPIs

eNPS is a strong predictor of an organisation’s attractiveness as an employer:

• Time to Fill Vacancies: A high eNPS indicates a positive workplace culture, which may shorten recruitment times.
• Quality of Hire: Satisfied employees are more likely to refer like-minded talent, improving the quality of new hires.
• Retention Rates: A high eNPS reflects strong employee loyalty, reducing voluntary turnover.

6. Benchmarking Across Teams or Departments

Segment eNPS by department, location, or team and compare it with other performance KPIs:

• Team Productivity: High eNPS in certain teams often correlates with better collaboration and output.
• Cross-Department Collaboration Metrics: Teams with higher eNPS may demonstrate stronger cross-functional collaboration.

7. Tracking eNPS Against Strategic Goals

Integrate eNPS into broader strategic objectives:

• Diversity, Equity, and Inclusion (DEI): Analyse eNPS scores by demographic groups to assess whether DEI initiatives are fostering a supportive environment.
• Sustainability Goals: Monitor whether eNPS improves as sustainability initiatives take hold, reflecting employee pride in organisational values.

In conclusion

eNPS is a valuable tool for gauging employee sentiment, it should be part of a broader strategy that includes various feedback methods to gain a comprehensive understanding of employee engagement.