eNPS is a popular method for measuring employee loyalty. But how does it work? And what does the result indicate?
In the 1990s, Bain & Company came up with a new way to measure customer satisfaction. They boiled it down to one simple question: "How likely are you to recommend our company/product/service to a friend or colleague?"
This method is known as NPS, short for Net Promoter Score.
Employee Net Promoter Score (eNPS): The basics
Soon after its inception, the Net Promoter Score (NPS) found its place in workplaces. In professional contexts, NPS evolved into eNPS (Employee Net Promoter Score). Unlike its counterpart, which measures customer loyalty, eNPS is utilized in employee surveys to assess employee loyalty.
Let's delve a bit deeper to understand how eNPS measures employee loyalty.
Calculating eNPS
With eNPS, employees are simply asked, "How likely are you to recommend your employer to a friend?" The employees rate this on a scale from 0 to 10, where 0 means "not likely at all" and 10 means "extremely likely." Based on their responses, they fall into one of three categories:
- Detractors (those who rate 0-6)
- Passive (those who rate 7-8)
- Promoters (those who rate 9-10)
eNPS is calculated by subtracting the percentage of detractors from the percentage of promoters (excluding the passive responses). For example, if 20% of respondents are promoters and 20% are detractors, your eNPS will be 0.
In the example below, 116 people responded to the eNPS question. Of these, 63% are 'promoters', 23% are 'passive', and 14% are 'detractors'.
So, the calculation would be: Promoters (63%) minus detractors (14%) equals an eNPS of 49.
But what does this indicate? What conclusions can be drawn from the results?
Interpreting your eNPS result
Your eNPS result ranges from -100 to 100. A negative score suggests that your organisation has more detractors than promoters, indicating a potential issue with employee loyalty. This should be taken seriously by management, as it often reflects underlying problems with company culture and engagement.
On the other hand, a positive eNPS score means you have more promoters than detractors. Congratulations! Keep focusing on retaining your current promoters and aim to convert passive and detractors into promoters.
What makes a "good" eNPS score?
In practice, anything above 0 is acceptable. An eNPS between 20-30 is considered quite good, and anything exceeding that is considered exceptional. The average eNPS result varies between different industries, countries, and is influenced by numerous factors.
Considerations regarding eNPS
Despite its many advantages, it is crucial to bear in mind that eNPS does come with its limitations. Just because it is a straightforward metric does not imply it is the complete solution for addressing employee engagement.
For the measurement to truly hold significance, the insights provided from your eNPS assessment - whether positive or negative - should prompt a thorough analysis where you uncover the underlying reasons. If there is discontentment, it is especially vital to identify and understand its causes. This necessitates asking further questions that delve deeper into employee engagement.
Your organisation's journey to high employee engagement should be one odeon going improvement. There is always work to be done to keep your employees engaged. eNPS indicates how much effort is needed and helps you navigate the engagement process while implementing various activities and initiatives.
eNPS is a great starting point for journey towards higher employee engagement. With the support of regular engagement surveys, you can continually support your employees, no matter where they fall on the scale.
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