Is NPS Appropriate for Employee Loyalty?

Increasingly, I am asked whether Net Promoter is appropriate for employee surveys. The theory is that loyal employees create loyal customers, which in turn leads to financial benefits. Many people intuitively understand this connection. However, after many years in the employee research world, I realized the employee survey process ranks alongside performance reviews as an exercise in frustration (and futility) for all involved. Poorly run employee programs can have the same unfortunate results as poorly run customer programs – lack of executive engagement, line ownership, accountability, etc.

Several companies I am working with today are pursuing the path of Employee Net Promoter Score (ENPS). These companies have been enthusiastic about Net Promoter for customers and believe that applying a similar methodology for employees will generate some great results. Generally (with only minor variation) they are asking, “How likely is it that you would recommend Company X to a friend as a place to work?” In one case, this is all they asked. Why? They wanted the survey to be perceived as dramatically different from their bi-annual 80-question employee opinion survey, which the organization was still trying to process 9 months later. Sound familiar? Their view was that the focused question would be collected more frequently and lend itself to taking a more operational approach for changing employee morale.

This is new territory for most companies. One customer asked whether I would expect their employee score to be better or worse than their customer NPS. In many examples I’ve looked at, the ENPS is worse – by up to 20 Net Promoter points. In one case, the company found that it was highly dependent on the regional leadership within their organization. Why this discrepancy? First, I believe employees who understand the business and customer strategy, as well as how they contribute to that strategy, are assets to improve customer loyalty. However, they also can be your company’s biggest critics, holding their employer to an extremely high standard. And why not? Companies promise to be the best places to work, create shareholder value, and create great customer experiences. For most employees, these promises represent the values that should be practiced on a daily basis. To the extent that the practice of these values is at odds with what they observe internally, employees will be less than loyal.

At the recent Net Promoter Conference in London, Alex Alfonso from Symantec discussed their customer journey through a period of dramatic change and transition as a result of mergers and acquisitions. Throughout these major transitions, Symantec was able to keep their core company values – innovation, action, trust, and a customer driven philosophy – intact. Alex articulated Symantec’s mission, which was to enable and empower individuals to create change in the business to improve customer experience. The mission brings together two key components, the employee and the customer, in one customer-driven strategy. And they are taking it seriously. Symantec’s three key metrics are Net Promoter Score, market share, and Employee Net Promoter Score.

It will be a growing trend for businesses building Net Promoter programs for customer experience also to understand what “Recommend” means for their employee experience. These experiences are interconnected—and only by moving toward more customer-focused employee feedback will employee loyalty move out of the human resource function and into the core of the customer experience strategy.

Comments

[Net Promoter Community]

Rob Markey, Partner and global head of Bain & Company's Customer Strategy and Marketing practice, provides a related post in the Net Promoter discussion forum. Here is a link (viewing/posting requires brief registration):

http://netpromoter.groupee.net/eve/forums/a/tpc/f/2731073251/m/5921064213?r=6541013313#6541013313

[ana]

i fully disagree. NPS can only support normal satisfaction research.. of cours if i understand well that NPS is based on an assumption that these most satisfied 10-20% of people will go to encourage others and least satisfied 10-20% will discourage them.. the basic assumption of employee satisfaction are diferent.. Do these people feel well in this company? why should you forget about the middle?

[Denise Wymore]

Laura,

Great post!

In my industry (financial cooperatives) we have found the same thing. If you ask members to be loyal, you need to make sure your employees are loyal, FIRST.

But like any survey initiative, you don't want to do it, until you're ready to hear it. Otherwise it will backfire big time.

Cheers!
Denise Wymore
Cooperative Culture Consultant
NPS Zealot

[Bernard Rosauer]

It seems to me that a company could have an increasing ENPS and a sinking NPS at the same time. Therefore, I personally would not recommended using ENPS as an indicator build and grow a superior workforce with an expectation of creating better customer retention and organic growth.

Also, there are a number of reasons employees will refrain from recommending their employers to family or friends that have nothing to do with overall employee satisfaction. For instance, if a person works for a great company that has a superior focus on performance management, the employee may not wish to personally become wrapped up in the performance of a family member or friend should that person fail tosucceed. Also, the type of work may simply not be a fit for people the employee cares about. This things will impact ENPS in a negative way but should not be considered as an indicator of the employees sense of belonging and engagement with said company.

too look for simplicity....and I found it with some research and modification of measurements established by Sirota (www.sirota.com). With my modifications, the best/smplest measurements are as follows:

1. Rate the degree of positive camaraderie you feel in your work area. (1-10) (25%)
2. Rate the fairness of pay and benefits/equity (1-10)(50%)
3. Rate the sense of accomplishment you feel as you drive home from work each day. (1-10) (25%)

Bernard Rosauer
www.evenbetteryet.com

[Laurie Gomes]

This is more of a question than a comment. In looking at NPS internally, what types of questions would be helpful in determining the adequate levels of support being provided by internal departments. I can see asking a high level question "How likely is it that you would recommend Company X to a friend as a place to work?” of the employees. I would also like to follow this up with 2-3 questions to determine areas of improvement. How do I emulate NPS with support by internal departments? Is this something that I can do?

[Shelle]

My company recently began using NPS to measure employee loyalty. We are wondering if there are any companies to benchmark with to understand if our scores are in line with the best in class companies. We currently only have 2 data points as we are doing the survey quarterly.

[Robin McNatt]

We are looking to implement an employee net promoter measurement at my organization and would like to find out how other companies have linked employee net promoter to customer net promoter and company profitability. Any insight you can share is greatly appreciated. Thank you

[Robin McNatt]

What follow-up questions are companies asking to determine areas of improvement for employee net promoter?

[Alan Maxwell]

Greetings,

Since September 2007, I've been an early adopter... utilizing NPS to gauge employee commitment. It's been a great tool and a key indicator regarding employee commitment (scores going up while significant drop in KPIs).

In the midst of driving organizational change by utilizing innovative organization models... namely what I’ve named "Voice of the Doer" programs (HR Six Sigma approach) to flush out organizational pain points and gaps then establish leadership platforms to create solutions and ownership/value creation flourishes. Coupled with a strong focus on manager soft skills (communications, accountability, candor) and employee development programs (career paths and discussions). From a Six Sigma perspective, there was a need to baseline current state and track progress as the model/programs were implemented. ENPS hit the mark for us.

We have been tracking the ENPS scores quarterly as we implemented our org model and programs and we have seen the following ENPS scores (-8%, -3%, 7%, 24%). As well as, key performance indicators moved in the right direction (i.e., 50% drop in turnover).

All the Best,

Alan Maxwell

[Robin Sinclair]

It is a fascinating thought that managers could be rated by their team members in much the same way, thereby encouraging better employee-manager relationships. This contributes to better customer service in the long run.

[JF]

Echoing Shelle's comment... where can we find benchmark data to see how our company is doing compared to others in our industry?

[Andrea Gabel]

I have been using NPS for employee surveys for individual departments beginning this year. It's very interesting to see the differences between departments. I think SHRM should jump on board and start providing the benchmark data we need.

Of course that's not the only question you need, and even Fred has admitted as much so let's get past the idea of "one question". Good customer and employee surveys use regression analysis to identify the key drivers. Anything else is amateurish.

I turn around my surveys in two weeks which include regression analysis and identification of key drivers with about 25 questions, along with lots of open ends that I even summarize. Nine months? That's ridiculous. Do I need a raise? Absolutely.