The connection between engaged associates and improved business results is, by now, undeniable. Gallup reports that organizations with more engaged employees are not only 10% more profitable but incur 41% less absenteeism and a 59% reduction in turnover compared to companies with less engaged workers. A study published by the American Psychological Association performed by researchers from the Universities of California, Missouri and Illinois showed that happier associates are 31% more productive, sell 37% more and are 3X more creative. Unfortunately, despite clear incentives such as these to create engaged teams, less than half of U.S. workers are happy.
According to their October, 2020 Employee Engagement and Performance Report, Gallup reports that just 36% of U.S. employees identify as engaged. What’s worse is that many smaller enterprises have no reliable way of measuring engagement. Compared to their large corporate counterparts, where a majority report regularly measuring associate satisfaction, HR.com found that less than 30% of organizations with fewer than 1,000 employees actually measure employee engagement. The reasons almost always have to do with size.
To begin with, many small businesses operate without a dedicated HR function. ADP reports that 70% of small businesses handle the HR function with staff who manage it on an “ad-hoc” basis, in addition to other duties. But even for those with more formal in-house or outsourced HR teams, the notion of engagement measurement can be daunting. Cost, associate disruption, or a lack of subject matter expertise are often cited as reasons for not implementing engagement measurement programs. Still others report concerns with “scope creep” – the inevitable growth in survey size over time as varied management constituencies seek to add measurement criteria to each subsequent wave. Finally, some, however wrongly, view associate engagement as a Pandora’s Box for associate gripes and complaints they’d rather keep closed. As a result, for too many small businesses, it becomes easier to pass on engagement measurement altogether than to take advantage of a clearly beneficial business improvement tool.
Facing similar obstacles and objections more than a dozen years ago, I chose to utilize a then little-known customer satisfaction tool that had grown out of work done at Bain and first published in the 2006 book, The Ultimate Question, by Fred Reichheld, the Bain partner and creator of the methodology. The tool, known as Net Promoter Score (NPS), is a vastly unique way of measuring customer satisfaction which asks the respondent essentially one, single question, “On a scale of 0 to 10, how likely would you be to recommend X company to a friend or colleague?” Those not familiar with NPS have almost assuredly been on the receiving end of a Net Promoter Score survey, so ubiquitous has it become for measuring consumer satisfaction for everything from AT&T to Zipcar. But immediately upon learning about NPS, I saw its potential as an engagement tool. By simply changing The Ultimate Question slightly to, “On a scale of 0 to 10 how likely would you be to recommend our company as a great place to work to a friend or relative?” we created a tool for engagement that enabled us to very inexpensively and simply launch an engagement management program which was also readily accepted by our associates and which delivered significant improvements in both engagement and in our real business results.
Today, Net Promoter Score is widely used for associate engagement. They refer to the tool as eNPS. And it’s perfect for smaller enterprise. Here’s how it works:
Associates surveyed are asked the Ultimate Question. NPS recommends the form, “On a scale of 0 to 10, how likely are you to recommend X company to a friend or colleague?” It’s essentially the same question as Customer Net Promoter. I still prefer, “On a scale of 0 to 10 how likely would you be to recommend our company as a great place to work to a friend or relative?” But, either will work. I recommend surveying 10% of your associates per quarter. This will enable you to gain a statistically significant view of engagement over time, with the quarterly waves enabling you to detect any seasonal variations.
Surveys can be administered on-line via a service such as Survey Monkey or can be conducted by a local telemarketing agency via phone. Because of the small sample sizes and very short length of the survey, eNPS is very inexpensive to implement.
Scoring works this way: Those answering 9 or 10 are called Promoters. Those answering 0 through 6 are Detractors. Those answering 7 or 8 are Passives. To calculate the score, simply subtract the number of Detractors from the number of Promoters and divide by the total number of respondents then multiply by 100.
((Promoters – Detractors) / Total Respondents) x 100
For example, in a survey with 36 promoters, 29 Passives and 6 Detractors, the NPS would be calculated as:
NPS: ((36-6)/71) x 100 = 42
For Promoters and Detractors, the NPS rules enable you to ask a simple, optional follow up question: “Can you tell me/Would you mind telling me the reason for the score you gave. I highly recommend gathering this information. It will prove invaluable to you. Use this information like a hunting list of issues to investigate and potentially correct in your business. As you fix things, tell the organization and tell them that the idea came from the engagement survey.
For Detractors, it is also permissible to ask the respondent if they would be OK with a member of the management team contacting them directly. This is again, optional. However, I strongly recommend doing so. This one act, if done with sincerity and by a management team dedicated to following up on and fixing what they find out about, will do more to drive your business forward than almost any other single business initiative you can imagine. Especially if the owner/CEO participates in the calls. Word will spread like wildfire that this is happening and that issues are being addressed. As a result, your organization will start seeing trust spiral.
It is important to tell associates what you are doing and why. Don’t ever sneak up on them. Assure them that the survey is being conducted anonymously and because you want to make their lives better. Then report the findings promptly after each wave.
Don’t get too caught up in the score. With NPS, scores over 50 or 60 are actually quite good, so if you start lower than that do not be alarmed or embarrassed. The important part is to focus on improvement over time (with the obvious goal being to reduce the number of Detractors while increasing the number of Promoters) and to talk to your people a lot – both about the process and what you are doing to make things better, which is, after all, the ultimate goal of all this.
Certainly, there are a multitude of options available to small business owners interested in exploring employee engagement. My focus here was on eNPS because it is a very simple and highly impactful tool for small businesses wishing to create an associate engagement program that can grow with them. If your organization chooses another tool, I’d be thrilled with that. I’d prefer that you start measuring engagement in some way rather than not measure it at all. Because to not measure associate engagement is to ignore a wealth of actionable information that is, quite literally, walking through your front door every day.