Three Considerations Before You Say, “Yes”, to Tieing Employee Compensation to NPS
Thanks to the countless books, articles, and research on Net Promoter Score (NPS)® it is now one of the most widely adopted customer loyalty metrics in the world, in both the B2B and B2C industries. With good reason – NPS provides organizational leaders with a straightforward number to help guide decision-making and is extremely easy for all employees to understand.
I recently found myself on a popular Net Promoter forum where the topic of discussion was whether you should tie employee compensation to NPS. As I sifted through the comments I saw numerous examples of aggressive front-line personnel at auto body shops and department stores not so subtly requesting high scores – does “I’m rewarded based on your feedback” sound familiar? There was even an example of a well-known bank stating they “only accept 9 or 10” for survey responses.
The debate on financially rewarding employees based on survey responses is nothing new. Will it eliminate authentic feedback? Do employees feel it’s fair? In this particular forum they wanted to know – how do I ensure my employees won’t game the system as well?
I thought about the conversations I’ve had over the last decade with business leaders looking to compensate employees based on NPS. My experience has taught me that tying employee bonuses to NPS can fail miserably for some and be wildly successful for others. Based on this knowledge, I believe for any NPS incentive program to flourish you must:
Employees are a great resource to help you promote or remind customers to take a survey. But, when you task front-line employees with administering or soliciting survey responses you open the door to unintended consequences such as begging for high scores. Best practices advise assigning an impartial client advocate or champion to administer the survey. This includes drafting survey communication, analyzing and interpreting client feedback and sharing data and recommendations with key stakeholders. Of course, that’s the role we fill with our clients but companies have also had success internally (just be sure the person can be truly objective).
Incentivizing your team based on satisfaction scores can sometimes lead to employees becoming overly concerned with the score rather than creating a compelling customer experience. Before you implement a bonus structure, run your survey program for a year or so. Use the baseline to determine where things stand and set realistic goals that employees will see as fair and can rally around. Also, analyze previous survey response data and use the insight to highlight key drivers of customer loyalty and educate employees on how to influence scores the right way.
Establish Reliable Metrics
Data reliability is a major concern for employees when these numbers reward them financially. Put employees at ease by reviewing the survey methodology, response rates and customer feedback as a group. Explain how the score is calculated and exactly how they will be rewarded. I also recommend that NPS be only a percentage of the bonus structure to avoid employees “chasing” scores.
Research has shown that happy employees lead to satisfied customers. Before you adopt an NPS incentive program be sure to do your due diligence and get buy-in from your managers as their support will be needed to sell it across the organization.