Employee Experience Basics Every Leader Should Know

“A mind that is stretched  by a new experience can never go back to its old dimensions.” ~ Oliver Wendell Holmes Jr.

What experiences have made you who you are today?  Whether good or bad, experiences can change us.  An event may change the way we see a person, or the world entirely.  Being part of or witnessing an incident can trigger intense chemical responses within us of pleasure or pain.  Our perception and response to an occurrence transforms a neutral event to a life-altering experience.  In recent years we’ve applied this understanding to our workplaces, resulting in the term employee experience, often referred to as EX.

What is the definition of employee experience?

Employee experience is an all-encompassing term used to describe an employee’s perception and observations regarding the collective events, interactions, and benefits he/she undergoes as part of the journey in working for a company.  Unlike many definitions that define the experience as simply a person’s journey working for an organization, the word experience implies the personal and emotional response to potentially neutral events.  While workplace events and communications take place in an office or around an employee, it’s an employee’s perception and/or interpretation of these events that make for his/her unique experience.

How is employee experience different from employee engagement?

The term employee engagement has been around for several years.  Engaged employees are defined as physically energized, emotionally connected, mentally focused, and indicate alignment with the purpose of the company (Loehr & Schwartz, 2003).  By this definition, employee engagement is a positive state of mind or mindset held by employees.  Research suggests companies with high employee engagement are more profitable, more productive, have higher sales, are safer, have lower turnover, and have lower employee absenteeism.  Whereas the term employee engagement is used to describe how connected an employee feels to his/her work and company, the term employee experience is used to describe an employee’s perception of a collection of events and exchanges related to his/her working for the company.  How much a person feels connected to or disconnected from their work may be a result of a positive or negative employee experience.  So, while a high level of engagement may be the goal, it is achieved by strategically improving different aspects of the employee experience.  Many metrics may be used to assess how positive or negative a company’s employee experience is.  Employee engagement is just one of these metrics used.

How is a company’s employee experience measured?

The ultimate goal of a positive employee experience is a healthy business.  So, when a company fails to perform successfully, it is often a sign of a misaligned or even poor employee experience.  Because of this, metrics used to assess a company’s operational and financial performance such as revenue, shrinkage, customer retention, and productivity also serve as valuable methods of measuring a company’s employee experience.

A company’s workforce data such as employee turnover, retention, absenteeism, and overtime per employee rates are also indicators of an effective or ineffective employee experience as these datapoints are reflective of employee behaviors driven by their experience.  The two most popular methods for evaluating a company’s employee experience are employee engagement, as explained previously, and the Employee Net Promoter Score (eNPS).  The eNPS system was born out of the customer loyalty metric, Net Promoter Score (NPS), first recognized by Fred Reichheld of Bain & Company in 2003.  Through research, Reichheld and the Bain team found customers responding positively to the question, “what is the likelihood you would refer Company X to a friend or colleague”, were very likely to demonstrate positive buying behaviors (rebuying, referring new customers, and spend more).  It was later as the concept of the internal customer (employees) grew that industry and leaders began applying the model internally giving way to the eNPS, asking employees the question, “On a scale of 0-10, how likely are you to recommend the Company as a (good) place to work?”.  Higher eNPS ratings reflect more employee loyalty, higher employee satisfaction, and suggest a more engaged workforce.  While generally this is a metric intended for internal use only, not designed for benchmarking, scores can range from -100 to +100 and generally scores in the 10-30 range are considered good, and 50+ considered excellent.

What can a company do to improve its employee experience?

To improve a company’s employee experience is to improve an employee’s perception of how the company rewards, recognizes, motivates, drives, communicates with, hires, terminates, values, supports, and develops its employees.  While an eNPS score can provide an overview of how an employee feels about and perceives the company, an eNPS rating does not identify why.  To improve the employee experience it is then important to understand both the employee’s overview of the company AND the what led to this perception.  For this reason, it is best to ask employees to rate not only their overall perception of the company (eNPS) but also ask their outlook as it relates to attributes of the employee experience (recognition, communication, safety, brand, management engagement, employee engagement, culture, compensation & benefits, and business viability).  With this data, companies can decipher what employees like and dislike about their interactions with the company as well as how heavily the different aspects of the employee experience impact their unique company culture.   For example, a media company had poor employee ratings around compensation and benefits.  Upon further examination however, compensation & benefit ratings had very little impact on whether an employee felt positively or negatively about the company’s employee experience (no correlation between comp & benefit ratings and eNPS ratings).  Instead, recognition (how employees feel rewarded for outstanding performance) and brand pride (whether employees are proud to work for the company and of the company’s impact to the industry/community) were the most influential attributes to a positive employee experience.  With this realization, the company chose to strategically invest allotted time and budget to people initiatives around recognition and employee-brand alignment, appreciating the value employees place on these aspects of their relationship with the company.  These insights allowed the company to create a much more thoughtful and unique experience for employees that resonates with its culture and helps deliver better business results.

Just as today we each are a culmination of our past individual experiences, our current workplace cultures are a reflection of our collective employee experiences.  Experiences are not based on logic.  We often don’t even realize what historical work-related events led to the perceptions we hold so firmly today.  By asking concise, reflective questions in a strategic way, we shift the employee experience from habitual to intentional.  Every workplace has an employee experience leading somewhere.  Where is your current employee experience leading you?

Learn more about surveys to capture your eNPS score and identify the critical attributes to your employee experience.

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https://cultureengineered.com/2019/12/employee-experience-basics/
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