Employee NPS – The ‘brutally honest’​ measure of Employee satisfaction!

Cutting through the noise of understanding the measurement of employee satisfaction, the only question we asked our employees was, ‘How likely are you to recommend us as an employer to a friend or an acquaintance?’

Sometimes, the strongest ideas are the simplest ones. We embark upon them through a simple happenstance which may seem instinctive and ‘staring in the face’ obvious to have missed till now.

We were reviewing our client NPS scores (which has peaked this cycle at a whopping 82). This is measured by simply asking our clients, ‘How likely are you to recommend us as a preferred technological partner?’ And a simple brainwave hit the group which was working towards employee satisfaction, why not extend a similar construct to employees?

However, an employee’s decision to stay in the organization is not only dependent on the experience an organization has to offer. It is often said, that employees don’t leave an organization. They bid adieu to their managers. On a lighter note, in case, you wish to understand the on-ground reality, best to review the conversations you may have had with your colleagues outside office, in a café (or an e-café now) and remember the central theme (or person) of discussion J

Hence we synthesized our survey to measure two major constructs:

  • Manager NPS: How likely are you to recommend your manager to a friend
  • Employee NPS: How likely are you to recommend ValueLabs as an employer to a friend

For those not familiar with how NPS is measured, here is a brief. NPS is measured on a scale of 1-10 (1 being the lowest and 10 being the highest). The respondent ratings are treated in the following manner:

  • Promoters are those who are typically impressed and would rate a brand 9 or 10
  • Neutral/Passives are those who are neutral towards the brand and rate 7 or 8
  • Detractors refer to all those who rated a brand below 7. In case someone seeks a reference on the brand, they are most likely to dissuade them from working with (or buying) that particular brand

In my view, NPS is probably more brutal than most of the scales available for measurement of satisfaction. It is because it comes with negative marking! Every promoter gets you a score of +1, every neutral 0. Lo and behold, every detractor gets you a score of -1!

I will also take this opportunity to convince you why a negative NPS may also seem super bright and a 0 NPS may seem like nothing short of a blessing. I would like to illustrate the same with the examples below:

Example 1:

Hypothetically, assume this survey response to be similar to the outcomes of an unbiased dice (a popular example in high school probability basics).

If you have 10 respondents assumed you received unbiased ratings i.e. one rating each between 1 and 10, i.e. your respondent ratings are 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10.

In this case:

  • Promoters (scores 9 and 10): 2
  • Neutral / Passives (scores 7 and 8): 2
  • Detractors ( scores 1 to 6): 6

NPS is calculated as (Number of promoters – Number of detractors) *100 / (Total responses).

In this case, NPS = ((2-6)*100) / 10 = -40

Example 2:

If you receive the following scores from 10 respondents : 5,6,7,8,7,8,7,8,9,10.

In this case

  • Promoters(scores 9 and 10): 2
  • Neutral / Passives(scores 7 and 8): 6
  • Detractors(scores 1 to 6): 2

NPS is calculated as: (Number of promoters – Number of detractors) *100 / (Total responses).

In this case, NPS = ((2-2)*100) / 10 = 0

Example 3:

If you receive the following scores from 10 respondents : 6,7,8,9,10,9,10,9,10,10

In this case:

  • Promoters(scores 9 and 10): 7
  • Neutral/Passives(scores 7 and 8): 2
  • Detractors(scores 1 to 6): 1

NPS is calculated as: (Number of promoters – Number of detractors) *100 / (Total responses).

In this case, NPS = ((7-1)*100) / 10 = 60

Simple observations based on the examples above:

  • Example 1 : NPS : -40 | 40% respondents rated your brand 7+
  • Example 2 : NPS : 0   | 80% respondents rated your brand 7+
  • Example 1 : NPS : +60 | 90% respondents rated your brand 7+

The above view of the data is exactly why I believe that NPS is brutal. Though I would want to revise my view to saying. ‘Brutally honest’!

The use of example 3 was intentional since our Employer NPS, in the lockdown quarter of April 2020 – June 2020 was +57 (patting ValueLabs leadership on the back ;)). Now that you have gone through the examples, you may come to appreciate the fact that, this was no mean feat!

If you are new to NPS, a question may be bothering you – how about accounting for number of responses? What if someone doesn’t reply to the survey? Are there assumptions made on their behalf?

NPS does not take into account, the number of responses and does not make any assumption on behalf of those who don’t respond. Having said that, is it an important metric to track? Yes, it definitely is. In our recent Employer NPS survey at ValueLabs, we had a response rate of 45%.

One may question, stating that this does not account for the viewpoint of 55% of the employees. There is a silver lining to this metric as well. This was our 5th cycle of ENPS and both the scores and the response rate have seen an upward trend from the initial stats of ENPS in late 20s to 57 now and response rate of 28% to 45% now. And if we look at the multiple cycles, the unique respondents would have easily covered around 80% of the employees. So yeah, the pat on the back continues ?

Like many of you, I googled the benchmarks to understand what the norms in the industry are for ENPS. It states, across multiple sources that any NPS score between +10 to +30 is considered good and anything above 50 is considered excellent. The average NPS for Tech companies is 26.

A self-proclaimed braggadocio, being a part of the Employee Success Organization at ValueLabs, it feels great to be par-excellence (with an ENPS score of 57) as per the industry. That would definitely act as a boost for all of us across to reach a score which is ever increasing, especially during the new normal of work from home.

Interested to know more on latest topics