Archive for May, 2008

One Minute HR health check – using the Net Promoter Score to measure employee advocacy

Monday, May 26th, 2008

Human resource experts are already drumming into us the importance of employee retention across the next decade if we as business owners and managers are going to remain competitive. The first step in positively impacting your employee retention is to calculate your company’s employee advocacy score.

Any HR manager worth their salt would recommend conducting full 360 degree analysis on your team to learn where your people are at. The reality check for a lot of organisations is that they either do not have the time or resource to undergo this approach on a regular basis.

The good news is that there is a simpler fast and effective way to conduct a full company health check with just two questions. The concept is adapted from Fred Reichheld’s book “The Ultimate Question: Driving Good Profits and True Growth.” In the book Reichheld delivers his work on customer advocacy and how he uses the Net Promoter Score calculation to determine this (for more information visit www.netpromoter.com ).

We can use the same Net Promoter Score calculation to test Employee Advocacy. Ultimately we want all of our employees to be advocates, to measure this we first need to understand that employees can fall into three categories:

  1. Promoters: the advocates that love and actively tell others how great the company is to work for.
  2. Passives: Employees, who neither love nor hate the company, simply go about their duties.
  3. Detractors: people in the organisation that are having issues, small or large and are actively telling others inside and outside the organisation about the problems they see.

To determine which of the three each employee is at, simply have them anonymously answer the following question,

QUESTION 1 “On a scale of 0 – 10, where 0 is least likely and 10 is most likely, how likely would you be to recommend our organisation to others to join as an employee?”

Once you have all of the results in:

  • Count the number of people who answer between 0-6 to find your total number of detractors.
  • Then count the total number of people who respond with a 7 or 8 to attain the total number of passives.
  • Finally count the total number who responded with a 9 or 10 to determine the promoters.
  • Calculate the both the promoters and detractors as a percentage of the total respondents by dividing each number by the total respondents. Then deduct the detractors from the promoters to reveal your net promoter score. See the example below:

EXAMPLE

Organisation has 100 employees

Total number of people responding between 0 - 6 = 20 or 20% of total employees

Total number of people responding 7or8 = 20 or 20% of total employees

Total number of people responding 9or10 = 60 or 60% of total employees

Promoters – detractors = Net Promoter Score

60% - 20% = 40% download excel calculation

We now have a Net Promoter Score for our employee advocacy, with the assistance of one simple questions and easy calculation. It is important to note that your score can range from -100$ to +100% and a score of 65% is actually very good. Take the time to read Reichheld’s book for an indepth understanding of the Net Promoter Score.

There is one more question we need to ask if we are to start to have a positive influence on this result. This question also comes from Reichheld’s work and it is:

QUESTION 2 “What is the one most important thing our organisation could do to help us to achieve a score of 10 from you.”

With this open ended feedback an organisation has the power to influence real change and start to make positive in roads to increasing advocacy and employee retention. What I love about this approach is that it can be measured on a regular basis with minimal effort. I recommend making it at least a monthly practise and have the management team review the responses to the questions and look for trends and items to act upon.

After implementing this in one of my previous businesses I quickly learnt from my team that understaffing during peak periods was having a negative impact on the team and that if I didn’t act quickly I would start losing employees. In such a tight labour market the thought of losing anyone is scary and expensive.

This led me and the team at www.PloyMe.com.au to develop our online employment utility that allows tens of thousands of casual workers to share their spare availability with thousands of employers. With PloyMe employers can take the pressure off their team by tapping into a vast pool of available workers ready and willing to work at times that suit both you and them.

Log on to www.PloyMe.com.au to learn how PloyMe can make a difference in your business or contact me at matt@ployme.com.au