What is the employee net promoter score (eNPS) and how can it improve employee engagement?

Employees are at the center of business growth, and businesses are making it a point to create a positive culture for happier employees.

To achieve that, comp and benefits folks are consistently working on improving compensation strategies and introducing employee engagement activities to achieve positive employee feedback.

These initiatives are also linked to the overall productivity of the organization. Market data from a Gallup survey shows that companies with an engaged workforce will be 21% more profitable than others.

Employee net promoter score (eNPS) helps you understand the impact of your employee engagement initiatives with valuable insights, allowing you to redirect your engagement efforts in the right direction with the right action plan.

Let’s start by understanding eNPS surveys in detail.

What is eNPS?

Employee net promoter score (eNPS) is a key metric used to determine the value of employee satisfaction in your organization. eNPS helps organizations understand if their employees are happy with the company culture.

This is similar to the net promoter score for customers that is used to understand and enhance customer loyalty.

Based on the eNPS, employees are segmented into 3 different categories:

1. Promoters (9-10) - These employee promoters have high employee satisfaction rates on the eNPS scale. They are the ones who would put their organization in a positive light both internally and externally and are valuable indicators of positive business outcomes.

2. Passives (7-8) - Passive employees have no complaints as such but have not been incentivized enough to promote their workplace in front of others. Their opinions are subject to change depending on your employee engagement efforts.

3. Detractors (0-6) - These are dissatisfied employees who can bring a negative impact to your company’s reputation. These employee responses can severely hamper your talent attraction and retention efforts if not taken into consideration in your employee engagement strategy.

Segmentation of employees according to eNPS

Why should you measure eNPS?

eNPS benchmarks provide HR folks with the necessary insights needed to deal with low employee engagement and retention rates. Let’s have a look at the benefits of measuring eNPS:

Employee net promoter score directly represents the willingness of an employee to promote your organization. Keeping a constant check on eNPS helps you determine any drop in your employee engagement rates with actionable insights.
Your eNPS score can also help you predict your employee retention and turnover rates. For example, employees who are detractors are more likely to leave the organization than promoters, who might be long-standing satisfied employees in your workforce.
The organization’s image as a ‘good place to work’ predominantly depends on the company’s eNPS scores. The higher percentage of promoters in your workspace would indicate a healthy and thriving culture and positive employee sentiments.
It brings data-driven decision-making to your employee experience structure and in identifying disloyal employees. You can identify specific areas that need improvement through this feedback. For example, you should pay more attention to work-life balance, reworking your stock option plans, or providing more flexible work schedules.
Employee net promoter score helps you be competitive by being aware of industry standards. If your eNPS is not adequate according to market data, then you need to take measures to convert your passives into promoters.

How to calculate your eNPS?

You can calculate your eNPS score using these steps:

Make sure to distribute eNPS surveys annually or bi-annually to capture any shift in employee engagement over time achieve continuous improvement and reduce negative eNPS scores.
The collected response should be segmented into three primary categories promoters, passives, and detractors to assess the level of employee satisfaction and employee disengagement.
The next step should be to calculate the percentage of employees belonging to each category. For example, if 60 employees are answering the survey questions with 30 as Promoters, 20 as Passives, and 10 as Detractors:

Percentage of Promoters = (30 ÷ 60) × 100 = 50%
Percentage of Passives = (20 ÷ 60) × 100 = 33.3%
Percentage of Detractors = (10 ÷ 60) × 100 = 16.7%

You can further do the eNPS calculation by using this formula to determine initial scores:

{eNPS} = {% Promoters} - {% Detractors}
According to the example given above, the eNPS for this organization would be: eNPS = 50%− 16.7% = 33.3
Use the data available to paint a complete picture of where your efforts are lacking and create specific strategies for happy employees. For example, if career development is the reason for employee dissatisfaction, then consider introducing upskilling programs to improve employee loyalty.

How to improve your eNPS?

Several best practices can help improve your eNPS:

Improving employee net promoter scores should be an ongoing process. Engage your employees in one-on-ones, Q&A sessions, and career training programs to keep communication open and build employee loyalty.
Introduce diversity, equity, inclusion, and belongingness in your company culture to create a positive work culture that enhances employee engagement and retention.
Compensation is an important criterion that motivates employees and makes you an employer of choice. Do relevant market research to create pay bands that are competitive and will result in engaged employees.
Prioritize mental health benefits for the employees like flexible work schedules, paid time off, hybrid work arrangements, and more to build on positive experiences for employees.

Role of CompUp in improving employee engagement

CompUp is an all-in-one compensation management solution that helps you create precise pay bands, manage appraisal cycles, and more. Let’s have a look at the prominent features of CompUp that help increase engagement levels for employees:

The platform has real-time salary benchmarking that helps you create accurate salary bands so that you can create competitive pay offerings for your employees.
CompUp has a budget simulation dashboard, where you can visualize your compensation budgeting to ensure the best use of your financial resources.
You can do a detailed pay gap analysis to understand the pay inequities within your organization and eliminate them on time.
It has a dashboard that shows increment distribution throughout different levels to help you run a fair and accurate merit cycle.