The fundamental flaws of the eNPS (& why the Happiness KPI is the answer)
There’s now some reason to be optimistic, and many employers are beginning to look beyond pandemic conditions and hoping to accelerate their growth. To achieve this, leaders need to ensure they have the right people. And, while the eNPS (employee Net Promoter Score) can help track whether teams are working well together, it is not a headline indicator of employee experience, and it should not be how companies think of wellbeing.
Share this insight:
February 18, 2021 5 mins read
With vaccinations rolling out, there is some hope of a post-COVID world. In light of this optimism, many employers turn their thoughts towards accelerating growth to make up for lost time. To achieve their business goals, leaders will also need to ensure they have the right people in the right teams — which really boils down to the attraction and retention of talent.
It is very sensible to choose a key metric to track through this important process. But it is important to choose the right metric — one that will pick up whether teams are working well together. In this article, we look at the trend to use eNPS (the employee Net Promoter Score) and why, here at Friday Pulse, we think creating a Happiness KPI is a better solution.
The eNPS — a derivative of the Net Promoter (NPS) score asking, “How likely are you to recommend [Organization] as a place to work?” — is a measure of employee wellbeing. Many businesses (and employee wellbeing platforms) quote their eNPS score to attract talent. The logic here is simple: if lots of employees are willing to promote their company, it must be a good place to work.
While the desires behind thinking about wellbeing and eNPS use may be altruistic, it’s a clumsy tool — it serves the employer better than the employee. On the other hand, measuring employee happiness changes the relationship between employer and employee, and allows real magic to happen.
Here’s a look at how this works.
A dive into the eNPS
The eNPS is a popular and easy way to calculate the average happiness of employees. Like the NPS, it looks at promoters (those likely to support your company) and detractors (those likely to speak negatively about it). Those in the middle are considered passives.
Respondents are given a scale of 0-10 to answer and then sorted.
0-6 are detractors
7-8 are neutral or passive
9-10 are promoters
To calculate the NPS, you subtract the % of detractors from the % of promoters. The final scores can range anywhere from -100 to 100 and is supposed to be a quick and easy number that checks employee satisfaction. Employers can apply this test quarterly, and some are encouraged to use it monthly to “check in” with their employees. Improvement in the score shows that employees are doing better and are more satisfied with their job. Or at least that’s what proponents of the eNPS would hope. The reality is that the eNPS is an inherently flawed number.
The flaws of the eNPS
The eNPS can provide a lot of information — for the specific purpose of recruiting. It is a perfectly fine measure of brand advocacy, but it should not be a headline indicator of employee experience, and it should not be how companies think of wellbeing.
The first flaw is the initial question, “How likely are you to recommend [Organization] as a place to work?”
Questions about wellbeing should act as sign posts or guides about how to improve your experience. This provides no guidance at all. There are four main problems with this question:
The question is focused on attracting talent to the organization, rather than the employee’s experience
The question asks the respondent to imagine how they would behave in a hypothetical future situation, rather than asking them to report on their own experience
The question is not time-bound, so it is very general and can only be asked infrequently
It does not capture the dynamic nature of employee experience
Next, the eNPS doesn’t focus on the employee. It asks the employee to be an advocate, instead of focusing on the experience of the employee or asking what it can do for the employee. In this way, it feels as extractive as questions about engagement — it becomes another thing that the company will ask the employee to do.
It becomes another chore for the employee.
Sorting the numbers is also problematic. First, it reduces the 11-point scale (0-10) to a 3-point scale. The scaling also appears to be arbitrary. For example, why is 6 considered a detractor? Furthermore, it scores 0-6 in the same way. Surely, someone that selected 0 is much more upset than a 6. What this means is that statistical nuance has been discarded in an effort to simplify the eNPS score.
And then the frequency that this question is administered brings a further complication. Because it’s just a snapshot in time, it does not account for the dynamic nature of employee experience. If an employee is having a bad day, they may respond with a 6 but later in the day they may respond with a better score.
Why the Happiness KPI works as a better solution
In many ways, employee experience is much like the daily, weekly, monthly and yearly actions of a share price on the stock market. It rises and falls constantly. Some days are better than others, just like some months or years are better than others. A quarterly snapshot of employee wellbeing is akin to only looking at share price on a quarterly basis and then trying to draw conclusions and conduct trend analysis based on limited information — most financial investors would balk at that kind of practice.
In the same way, employers be aware of trends in their workplace. A single score is a snapshot that tells a story of a single moment in time. To understand real trends, you need more data. This is why we believe that the weekly measurement of happiness makes for a far more reliable KPI than quarterly, or even monthly eNPS measurements. It’s infrequent enough to not annoy employees while being frequent enough to provide ‘real-time’ information that you can use.
Measuring happiness focuses on an employee’s real experiences instead of hypotheticals. It changes the extractive relationship of employer/employee into a more collaborative one. It sends the message to employees that employers are willing to listen and act on employee concerns.
The relationship between eNPS and happiness
While the eNPS captures an employee’s willingness to promote their company, it doesn’t capture happiness. Happiness and the eNPS are, of course, interrelated. It would be very strange if they weren’t. The following chart comes from Friday Pulse clients who collected both the Happiness KPI and eNPS data.
The graph confirms things that you may have already concluded as ‘common sense’. Happy employees are much more likely to be promoters, and unhappy employees are much more likely to be detractors.
What this means is that employee happiness is a good predictor of employee advocacy. Happier employees are more likely to promote the company as an excellent place to work. But, employee happiness has many other advantages as your core people metric:
It signals that the business cares about the employees’ experience of work
Data can be gathered on a weekly basis so people leaders can respond quickly to any challenges.
Happiness also predicts a series of business-critical outcomes:
Higher staff retention – unhappy employees are 2x more likely to leave
Increased productivity – happier teams are 28% more productive
Improved innovation – happier employees are 3x more creative and collaborative
In addition, it’s worth noting that many of our clients actively promote their use of Friday Pulse in their recruitment programmes. They do this because they know that it helps them show they care about their employees and attract better talent.
How Friday Pulse can help
At Friday Pulse, we wholeheartedly endorse employee happiness as the best measure of employee experience. While the eNPS does have some value as a measure of employee advocacy, it is much less versatile and useful.
If you are looking for a more nuanced approach to recruitment while truly understanding your people’s attitude towards your company, then we recommend trying the Happiness KPI. And, we’re continuing to offer free access to Friday Pulse for six weeks. Get in touch to book a demo. We’d love to help.
Teams are the instruments of change in a company. Changes in their microcultures are more likely to shape you company’s culture than anything else. In today’s Covid-19 world, flexible team sizes are a must, and small teams are how companies will be able to climb the resilience curve.
Where once the average response to “How have you felt at work this week?” was happy, the new normal is now “Ok”. The costs of a workforce becoming just “Ok” about work can be high but connecting with your team in better ways may be a feasible solution.