How to Write Great Company OKRs: A CEO’s Guide

In this article, we will discuss everything you need to know about writing, communicating, cascading and implementing company OKRs with some exciting examples.

7

min read

We have talked about OKRs and their importance for different teams as well as individuals. However, an equally important theme that needs due attention includes company OKRs. For a moment, you might think that different team OKRs together are what will form company OKRs. While this is true, however, you will not get a complete and impactful picture this way. Therefore, you need to specifically focus on company OKRs or high level OKRs which will be overarching for anyone who is a part of your organization.

Setting company OKRs: Why and how

Let’s start by answering one of the first questions you are likely to have, why should you be setting high level/ company OKRs. Well, have you ever felt that a lot was discussed during a business strategy or brainstorming session, but when the final tasks and outcomes came to you, it wasn’t even close to what you discussed? If the answer is yes, it’s mostly because the discussion got left on the whiteboard. Setting company OKRs wisely can help prevent exactly that. Here’s what company OKRs can help you achieve:

  • Ensure that everyone is rowing in the same direction: Without company OKRs, different departments might push diverse agenda in different directions, leading to chaos in the organization
  • Communicate the organizational priorities actively: Ensure that everyone understands what is of priority to the organization at that moment
  • Prevent out of sight out of mind syndrome: Ensure that what is discussed is actioned, implemented and driven to results 

Once you and your team are aligned on the need for company OKRs, it is important to follow an effective process to set them. The following steps/ practices will guide your journey and answer the question of how to set company OKRs:

  • Understand needs and priorities at the organization level, across diverse domains, including, business, finance, marketing, human resources, etc.
  • Create a collaborative group with representation from all teams to ensure no voice gets left behind
  • Develop a guide of sorts to help everyone understand the importance and purpose of company OKRs
  • Substantiate each objective with 2-3 key results as well as initiatives or projects to achieve the same

How to turn business strategy into measurable metrics with company OKRs?

Your business strategy is generally an overarching statement or goal that you aspire to reach. However, by its nature, business strategy talks about the actions and steps you need to take to reach that goal, but seldom talks about associated metrics which will signify whether or not you have been able to achieve the goal. Company OKRs can help bridge this gap. This can be used as a tool to translate your business strategy into measurable metrics that can help create clarity for results. 

For instance, as a part of increasing customer lifetime value, your business strategy can be to improve customer experience by reducing complaint resolution time, better responses, etc. However, if you add a layer of OKRs to this business strategy, you will get measurable metrics to translate your strategy into results. Here, key results such as increasing customer NPS by 20% or recurring customers by 45% can be used as metrics as a part of company OKRs.

How to prioritize company OKRs?

With a wide array of goals to achieve, you are likely to come across conflicting OKRs when you try to set company OKRs. You will find yourself wondering which ones to choose over others. While each one of them has its merit, trying to boil the ocean by implementing all of them together will not yield any impact. It will only result in you being too stretched for resources with little or no progress. 

Hence, it is very important that you prioritize company OKRs based on the follow parameters, especially if you are setting company OKRs for the first time:

  • Impact on the bottom line: If an OKR has a direct impact on the profit/revenue of your organization and that is a business need, you need to prioritize it up front
  • Ease of implementation and achievement: Some company OKRs can be easier to implement than others, you can start with a couple of those to facilitate initial wins and promote team confidence and morale
  • Degree of interdependencies: As company OKRs, they will likely require collaboration between different teams, starting with OKRs which do not require a very high degree of interdependency can help set the path for others
  • Level of acceptance: Finally, some company OKRs will be accepted more easily by everyone in the team than others, it’s best to commence with them to secure organization-wide buy-in

Company OKR planning

Before you start putting down the OKRs on paper and implementing them, you need to have a series of company OKR planning and brainstorming sessions. Company OKR planning will help you in not only writing great and effective OKRs but also facilitate smooth implementation. Below are some questions you need to answer as you plan your company OKRs:

Question 1: Who will be a part of the OKR process?

Your company OKR planning should begin with deciding who will be a part of the entire process which starts from planning and ends with evaluation and realignment, thus, bringing the circle back to planning. Ideally, if you have several departments within the team, it is best to have at least one representative from the team to be a part of the OKR planning. Generally, senior leaders who have both functional understanding and institutional knowledge about the organization are ideal for being a part of the company OKR planning process. Once you have the initial planning committee in place, you can start by considering the following parameters for effective planning and implementation:

Question 2: Who will be the OKR champions or OKR masters?

During company OKR planning, you need to decide who will be the OKR masters or who will ensure that once put on paper, the OKRs don’t end up as a part of yet another folder that doesn’t see the light of day. OKR champions can be the same professionals who are a part of the planning committee or can be selected based on consensus. Ultimately, the OKR masters will be responsible to ensure progress for each key result. Adoption of tools, regular stand ups, etc. can help OKR champions track progress. 

Question 3: How will the OKRs be decided?

As they are expected to impact the entire organization, company OKRs are best set by the CEO. However, in most cases, the overarching objective will have key results that will be dependent on different departments. For instance, if the objective is to increase revenue, there will be a key result for the sales team, one will be there for marketing to help build a pipeline for sales and similarly, for product and design to innovate and create better products that either cost less or sell more. Thus, during the company OKR planning phase, it is best to get opinions from everyone to prevent a disconnect later and ensure ambitious but realistic key results. 

Question 4: How will the OKRs be cascaded across the organization?

The next important consideration for company OKRs is how they will be cascaded or trickled down across the organization. While the focus of cascading will be in a top-down manner, considering the company OKRs are set by the top leadership, it is important to ensure that they are not perceived as orders or performance review parameters for employees. Therefore, cascading of the OKRs should happen in a manner that while everyone in the organization is aware of what the company OKRs are, they are not burdened or limited by achieving only those as a part of their performance. 

Question 5: How will you ensure team alignment on the company OKRs?

Unless different teams are aligned on what the company OKRs advocate, it will be very difficult to ensure achievement of results. Again, the goal here is to not achieve alignment by means of force or order but to facilitate genuine acceptance and alignment with what has been set as company OKRs. Here, the OKR masters for each team will have a key role to play. We will discuss more about this in the following sections. You can also check our exclusive article on how to align teams using OKRs.

Question 6: How will you communicate OKRs to the teams?

A linked idea that arises from cascading of company OKRs as a part of OKR planning is communicating the same. Here, the idea is to ensure that everyone has the same idea of what the OKR seeks to achieve and don’t have differing views of what is expected. Therefore, the communication needs to be extremely clear. Thus, when you are in the OKR planning phase, you need to build a robust communication strategy to ensure everyone gets the same and right message about the company OKRs. You can follow some of the steps mentioned in the sections below to create an effective strategy. 

Question 7: What will be the cadence for company OKR review?

Finally, during OKR planning, you also need to set a cadence for subsequent meetings/ sessions that you will conduct to ensure the efficacy of the set company OKRs. One of the most important ones here is to set a cadence for OKR review and evaluation of progress. Here, you need to collaboratively decide on how often or frequently you would like to connect to gauge the level of progress for each OKR and discuss any challenges, opportunities, etc. that may have come to your notice. Furthermore, you will need to decide how often you want to create new OKRs and relook at the old ones. 

How to drive company OKR adoption within teams?

Picture yourself in a situation where you have set forward-looking and aspirational company OKRs which have the potential to take your organization to the next level of growth. However, your team members refuse to accept and adopt them. What do you do? 

To avoid landing yourself in such a situation, it is important to have an effective process in place that will help you drive company OKR adoption within team members. Here are a few ways you can achieve the same:

1. Ensure team representation

Make sure at least one member of each team is a part of company OKRs planning and writing. This will facilitate a feeling of engagement, belongingness and ownership, leading to greater acceptance and adoption. 

2. Have an OKR discussion with the team

Once you have set the company OKRs, as the CEO, have a discussion with each team not only to share what the OKRs are, but also the rationale behind each one and the potential impact on the organization as well as the individual. 

3. Give freedom and autonomy

At a strategic level, you may set broad company OKRs that involve every team. However, you should try to focus on just setting the objective/key result for the team and not how to achieve the same. Give team members the freedom to innovate ways in which they want to achieve it. It will lead to greater relatability with the OKR resulting in higher adoption.

4. Encourage them to set their own OKRs

Finally, while you set the company OKRs, encourage teams to set their own OKRs which align with the high level ones. Again, this freedom to set their own OKRs will encourage them to adopt the company OKRs even more deeply.  

OKR communication strategies

An important part of implementing company OKRs is to communicate them to everyone across the organization in the most effective manner. However, one time communication will not be enough. Ensure sufficient follow through. Here are a few tips to start your company OKR communication:

  • Host an open house where you, as the CEO, will share the company OKRs
  • Add the OKRs to spreadsheets or preferably an OKR tool that can help everyone see not only the OKRs, but also deadlines, progress tracking, etc.
  • Make OKR communication a part of your onboarding process
  • Conduct frequent meetings in smaller groups to share progress on company OKRs and reinforce them 
  • Seek feedback on the OKRs in closed groups and pay heed to the same
  • Encourage managers and team leads to communicate OKRs on a regular basis

Top 5 company OKR examples

Let’s quickly glance at some of the top examples of company OKRs that you can take reference from to set OKRs for your organization. 

Objective 1: Achieve high revenue 

  • Key result 1: Increase overall sales by 25%
  • Key result 2: Reduce production cost by 5%
  • Key result 3: Expand presence by establishing operations in 2 global centers

Objective 2: Create an engaging work culture

  • Key result 1: Reduce absenteeism by 20%
  • Key result 2: Bring voluntary turnover rate to 5%
  • Key result 3: Achieve e-NPS score of 9 or above

Objective 3: Augment customer experience

  • Key result 1: Increase customer stickiness by 25%
  • Key result 2: Increase customer lifetime value by 30%
  • Key result 3: Achieve NPS of 8 or higher

Objective 4: Raise funds for the next stage of growth

  • Key result 1: Convert at least 35% first meetings with VCs to second meetings
  • Key result 2: Secure a reinvestment of xx from old investors
  • Key result 3: Secure yy from new investors in the next 6 months

Objective 5: Create a better company culture

  • Key result 1: Increase employee satisfaction by 35%
  • Key result 2: Acknowledge and appreciate work and effort at least once every month
  • Key result 3: Conduct open houses with senior leadership once a quarter 

Final Thoughts

Are you looking to automate all the processes we mentioned above? An Excel sheet will only get you so far. Using an OKR software will not only help you set, cascade, and communicate your company OKRs, but will also help you keep track of day-to-day progress on each of them across the organization with just a few clicks. 

 If you have got 15 minutes, see all these in action on this quick call with one of our experts. It will be worth your time, we promise!

Suggested Readings

Learn from the CEO: How Chargebee built a $3 billion SaaS unicorn with their efficient PMS

Should your business invest in OKR software: Calculate the ROI

Garima Shukla

Marketing, SuperBeings

Hello world! I am Garima and I research and write on everything we are doing to make the world of work a better place at SuperBeings

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Performance
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x
min read

12 most common performance review biases and how to avoid them

Biases are common to all humans. If you look back at your day, you’ll realize that most of the decisions you made were based on some belief, prejudice or bias. While being biased is inherently human, its manifestation in some situations can lead to results which are far from ideal. And, that’s a topic we are discussing with this article, Performance Review Biases. 

Essentially, performance review biases and preconceptions, notions or beliefs that you may hold, which may consciously or unconsciously impact your judgment when you are evaluating the performance of your team members. Performance review biases, even if unconscious, can lead to serious implications for your team member whose performance is being evaluated. For instance, if you have a certain bias against someone, you might give them a poor rating, unconsciously, which might impact their promotion, increment and career trajectory. Thus, as a leader, it is very important for you to check if you have any performance review biases and introduce preventive strategies, wherever needed. 

Top 12 performance review biases to look out for

Let’s quickly look at the top 12 most common performance review biases that are observed in growing organizations, how they look like and how you can prevent them for your company. 

1. Halo effect

Definition: 

The Halo effect, like the term suggests, is when you put a halo over a person which is reflected in every perception you have about them. From a performance review bias perspective, it translates to a situation, where if a person has performed well in one aspect, you will have a bias that all other aspects of their performance are equally good which may not be the case. This suggests that their one good trait tends to overshadow all others. 

Example:

If an employee has shown attention to detail to a particular project, which resulted in positive outcomes for the organization, a manager may consider attention to detail as their primary trait and all other parameters of performance review will be negated. Chances are that even if the person is not punctual, misses deadlines, etc., the manager will still give them a higher rating, because their one trait that impressed the manager will overshadow the other performance incompetencies. 

How to prevent it:

To prevent the Halo effect, it is important for managers to evaluate the performance of their team members on multiple parameters and score them on each individually. In addition to the positive trait, you must objectively evaluate other factors which ultimately contribute to organizational success and assess the employee on a holistic level. This will ensure that one quality does not overshadow others, which equally determine the level of performance. 

2. Horns effect

Definition:

A counterpart of the Halo effect is the Horns effect. Here, one negative trait or performance parameter tends to bring down the overall performance review for an employee. If you have had a poor experience with an employee on a particular aspect, you may believe that they are overall a poor performer, which may reflect in your rating, despite them performing well on other aspects. 

Example:

If an employee missed a particular deadline due to some personal reason, a manager might build a perception that they are not serious about their work. The delay in delivery of work then becomes the only important trait and other positives are ignored or overlooked.

How to prevent it:

Like the Halo effect, the best way to prevent the Horns effect is by taking into account multiple performance parameters and to get a clear understanding of the reason behind rating for each individual parameter. This will encourage you or any manager to rationally review a performance rather than being susceptible to performance review biases. 

3. Leniency bias

Definition:

Leniency bias in performance review biases refers to a situation where you are more lenient in your rating, giving employees a higher rating than what their performance truly would yield. Leniency bias generally leads to overestimating the performance of some, resulting in the inability to differentiate average performance from top performers. Invariably, you may end up promoting some who still have room for improvement, while leaving others dissatisfied who truly deserve recognition and incentives. 

Example:

Mr X and Mr Y are at a similar level and perform the same role of running ads to drive online traffic. During the performance term, Mr X managed a traffic of 6000+ leads while Mr Y brought in only 1000+. Leniency effect kicks in when the manager rates both of them at a similar level, despite the difference in their outputs. Naturally, both of them will have similar increments and career paths, despite unequal efforts and results. This might lead to dissatisfaction, lower levels of engagement, and ultimately attrition. 

How to prevent it:

To differentiate between above average and top performance and to prevent falling prey to leniency bias, it is ideal to have a rating scale which increases the number of rating options after average. Instead of simply saying if a performer was average or above average, add options like excellent, high potential, high performer etc, after above average. 

4. Centrality bias

Definition:

Centrality bias occurs if you rate your employee’s performance just in the middle of the spectrum. This generally occurs when you find it difficult to make a decision and go with a safe option. However, like leniency bias, this is also one of the performance review biases which makes it difficult to differentiate between low and top performers. 

Example:

Centrality bias is evident if for a particular manager most employees have received the middle rating or the average review. In the case of a 7 point rating scale 4 is the most common rating received by many.

How to prevent it:

One of the easiest ways to prevent this performance review bias is to eliminate the middle option from your rating scale. For instance, if you follow a 5 point rating scale, you should move to a 4 point scale and eliminate the middle option of average. This will push your managers to give a below or above average rating, and help differentiate between different performance levels.

5. Recency bias

Definition:

Generally, performance reviews occur at the end of the year, and recency bias comes in if you take into account only the most recent performance of the employee as opposed to reviewing their performance through the year. Chances are if the performer delivered poorly in the end, their entire rating will be dependent on this performance if this bias is at play. This generally occurs because it is easiest to remember the things that happen most recently. However, they reduce the employees to a few weeks and overlook their contribution across the year.

Example:

If Ms Y brought in 3 new customers at the start of the year, resulting in 50 Lacs of business, however, she was unable to convert any clients in the last quarter. With recency bias, the manager will rate her performance below average or poorly, because of the most recent performance, despite having a worthwhile performance across the year. The manager will end up overlooking her performance in the initial months. 

How to prevent it:

Preventing recency bias requires adopting a continuous performance review framework. Here, you can focus on capturing performance feedback at regular intervals, when an employee achieves a milestone, completes a project, etc. All the feedback can then be consolidated to create an annual performance report based on which the final rating should be allocated. This will help you get sufficient data points to get a holistic performance view.

6. Primacy bias

Definition:

First impressions last. That’s the best way to define the primacy bias. It stands on the flip side of recency bias. Here, the first or the first few instances of one’s performance tend to influence the final performance review. Whether the performance has been good or bad in the beginning is what defines the final appraisal call. 

Example:

When Mr O joined work, he was a little under confident in a new territory and could only close 1 deal in the first two months. However, as he learnt more about the product, his performance improved and by the end of the year, he closed 5 deals in just 2 weeks. However, in the event of primacy bias, his performance review will evaluate his performance as poor because he was unable to make a lasting first impression. 

How to prevent it:

Preventing primacy bias follows the same principles as recency effect. The idea is to make performance feedback a regular practice where it is taken at pre decided intervals and sometimes after completing some important milestones. This will help managers to get a snapshot of performance over the year with clear points to avoid being fixated on one or two incidents from the very beginning. 

7. Similar-to-me bias

Definition:

As the name suggests, this is one of those performance review biases in which you may unconsciously give a higher rating to an employee who shares similar beliefs, skills, perceptions, etc. The rationale is quite simple, we tend to like people who are like us and often believe that the skills we possess are most desirable. However, this often leads to the creation of a homogeneous culture where diversity and inclusion don’t exist, leading to poor innovation and creativity. 

Example:

A manager Mr T has three employees reporting directly to him. Mr T is very process driven and appreciates the same quality to drive outcomes. While one of those employees, Ms S is also process driven, the others are not and all three have similar outcomes. With similar-to-me bias, Mr T is likely to give Ms S a higher rating because she works in the same way as him, despite equally good performance from the other two. 

How to prevent it:

As a performance review bias, the similar-to-me bias can be prevented by making assessments more objective and evidence backed. Encourage your managers to bifurcate performance reviews based on different parameters along with a reasoning behind each parameter. 

8. Contrast bias

Definition:

Contrast bias occurs when a manager is evaluating performance for more than one employee and the performance of one becomes the benchmark for evaluating the performance of others instead of the company standard. At times, despite performing extremely well, an employee might just get an average rating because of the goal or the standard being used, leading to low engagement and satisfaction. 

Example:

If the sales target for a team is getting 5 new clients individually over a period of 6 months and one employee gets 10 new clients and others get 7, 8 and 9. Contrast bias occurs when the manager gives an average rating to the employee who brought in 7 clients because it is lower when compared to the performance of the employee who brought in 10. Despite performing better than the company standard and goal, the performance of this employee is not considered up to the mark, because of contrast bias.

How to prevent it:

To prevent this performance review bias, it is important that managers set clear performance expectations at the beginning of the performance period and evaluation is done strictly according to those parameters. It is even a good idea to define performance evaluation based on different levels of achievement and managers must be encouraged and trained to review each performance in silos, rather than comparing one with another. 

9. Attribution bias

Definition:

You display attribution bias during a performance review when you attribute the reason behind a performance based on your beliefs and perceptions, rather than objective facts and logic. In attribution bias, we generally attribute our good performance to internal factors like hard work, dedication, etc. and poor performance to external factors like lack of support, collaboration. However, when it comes to evaluating the performance of others, we turn the tables. 

Example:

A classic example of attribution bias as one of the performance review biases is if Mr L has not been able to perform up to the mark and his manager has to evaluate his performance. With attribution bias, the manager, who might think Mr L is not hardworking, might believe that the reason for poor performance has been the casual attitude of Mr L, even if clearly, he wasn’t provided with the right tools and software needed for the job.  

How to prevent it:

To prevent attribution bias, it is important that managers clearly define the reasons they believe led to the good or bad performance and a similar exercise is undertaken by the employee as a part of self reflection. It is important to assess both internal and external factors and focus on continuous feedback from diverse sources to understand which factors have been behind the performance more than others. 

10. Gender bias

Definition:

This is one of those performance review biases which are clear by the name. It suggests that when it comes to performance reviews, women are often evaluated based on their personality and behavior, while the performance of men is evaluated on the basis of their work. This leads to a skewed understanding of the contribution made by both genders, resulting in unfair distribution of rewards and recognition. 

Example:

Suppose there are two colleagues who are being evaluated, Mr G and Ms K and both of them have had similar achievements, milestones and areas of improvement. A performance review which says Mr G has great coding skills and is able to write perfect codes in a short time, while Ms K has a pleasant demeanor and is able to collaborate with everyone well. While both the reviews are positive, the former one for the male employee is based on functional competencies, which yields better rewards and promotions for him, leading to gender inequality at the workplace.

How to prevent it:

To prevent gender bias, it is important to make performance reviews structured and objective. You may want to steer away from open feedback and give your managers a pre populated template with a few blocks. Furthermore, encourage your managers to quantify how each performer’s contribution led to organizational impact, focusing on behavior and outcome rather than performance itself. 

11. Confirmation bias

Definition:

All of us have preconceived notions about others and their performance. Confirmation bias occurs when you pay more heed to actions and information that confirm your bias about a particular performance than others which challenge your beliefs. Put simply, you are more likely to agree with opinions and facts which align with your evaluation of an individual’s performance, while negating those that give an alternate view. This gives a partial picture of an employee. 

Example:

If a manager believes that Ms B has performed well due to her high functional skills, punctuality and attention to details, you will give her a higher rating. If the manager received feedback from external resources reinforcing the same belief, they will add that to their narrative. However, if a contrary comment comes to the picture, a manager with confirmation bias might discount or completely ignore it. 

How to prevent it:

To prevent confirmation bias, managers need to think of their perceptions as potential truths and not the ultimate truths. An initial perception should be made, which should be confirmed or negated based on proofs and behaviors that come along the way, rather than the other way round. It is important to pay attention to and accept feedback that goes against one’s belief to get a complete picture of the employee’s performance. 

12. Idiosyncratic bias

Definition:

As a manager, you may have some functional competencies which you are great at. However, there might be others where you have limited experience and expertise. One of the performance review biases in this case is the idiosyncratic bias. Here, you may end up being more lenient towards those who possess skills that you may have limited expertise with, while being more strict with those who share common skills like you. Often the reason behind is that, when someone evaluates performance based on skills that one has limited knowledge of, even small achievements make an impression, however, when it comes to evaluating skills one possesses, the standard for evaluation goes up. In either case, the performance review is not holistic. 

Example:

There is a manager Ms H who is great at sales, but has limited expertise in building proposals and attention to detail. She has two team members working with her Mr T & Ms L, where the former has sales experience and the latter has experience in creating proposals with utmost accuracy. Idiosyncratic bias creeps in when unconsciously, Ms H gives Ms L a higher rating than Mr T, because the standards set for what constitutes good performance are based on her level of expertise. 

How to prevent it:

To confront and prevent this performance review bias, managers must be encouraged to go beyond rating them based on their performance and what they believe has been the impact they have created. It is best for managers to consider whether or not their performance left an impression where the manager would want to work with the employee again. 

Prevent performance review biases with performance management tools

As humans, we are inherently biased and unconscious bias training can go a long way into helping us keep our biases in check. However, to ensure that biases don’t impact performance reviews for any employees, it is best to implement a performance management tool to reduce their incidence. A performance management tool, like SuperBeings, will help you:

Aggregate performance snapshots over time

Prevent performance review biases like primacy effect and recency effect, etc. which rely on one a year bias prone 9 box grid assessment, by replacing it with a system generated grid based on performance snapshots collected throughout the year. Not only will you get a holistic view of the performance, your managers will also get a clear understanding of which employees need help more than others.

Create performance snapshots

Equip your managers with a pre-built customizable template to answer simple questions about employee performance and potential at regular intervals to get a true snapshot of the performance and improvement from time to time. This will help managers objectively review performance at the end of the year.

Collect reviews holistically

Get inputs from diverse team members with automation to get a holistic view of an employee’s performance. This will help reduce the rater biases towards or against any employee and ensure that the reviews are genuine and authentic. 

While performance review biases are common, if you are able to prevent them, you will unlock a high performance culture which greatly recognizes and incentivizes good performance. Using a performance management tool can help you achieve the same. 

Engagement
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x
min read

Employee Net Promoter Score (eNPS): How to Use eNPS for Better Engagement

“Every employee can affect your company’s brand”- Tony Hseih, Former CEO, Zappos

TL:DR

Employee NPS is a key component for your organization if you wish to create a culture which engages, motivates and inspires employees and encourages them to recommend it to their friends. Here are a few quick points that you should not forget:

  • It helps organizations gauge the level of engagement and experience for employees by segmenting employees into promoters, passives and detractors (discussed later)
  • eNPS is important as it helps in employee retention as well as facilitate fast and effective hiring by ensuring a winning employer brand
  • It is best to conduct eNPS surveys on a regular basis to gauge trends over cycles and address fluctuations in real time
  • To improve your eNPS, you must focus on understanding each segment of employees and taking appropriate action
  • You must acknowledge that passives have a great potential of changing your eNPS and you should focus your efforts on bringing them up the score spectrum
  • Finally, you must use eNPS as a means to boost employee morale and track level and reasons for disengagement

Now let’s get into the nitty-gritties of employee Net Promoter Score (eNPS) and how you can use them effectively.

What is employee Net Promoter Score?

eNPS is or employee NPS is a measure of employee loyalty and how they feel about your organization. It is a scoring mechanism that employees can use to share their satisfaction/ dissatisfaction with the company culture, which in turn helps leaders to gauge the impact it will have on the organization. 

The advent of eNPS came as a result of realizing that employees have an equal impact on an organization as the customers

For instance, if any employee leaves a bad review or reports a bad experience about your organization, it might act as a deterrent for other high performing candidates from applying to your organization.

In a nutshell, eNPS is one of the top tools you can use to gauge how satisfied your employees are with your company culture and measure whether or not your employee engagement and other efforts are actually bearing fruits. 

How to calculate eNPS?

You can calculate the eNPS for your organization by subtracting the percentage of promoters from the percentage of detractors. Let’s quickly understand what this means. 

You will start by asking your employees to rate their experience on a rating scale of 0-10. You can have questions like ‘How likely are you to recommend the organization to your peers or friends, on a scale of 0-10’. We will talk more about potential questions in subsequent sections. Depending on their experience, your employees will share their rating. Based on the rating, you can segment your employees into three categories:

  • Promoters: With a rating of 9-10; they are highly loyal, motivated and inspired and show full commitment to the organization
  • Passives: With a rating of 7-8; they are generally neutral, while they are happy with the experience, their level of loyalty and commitment may not be as high as the promoters
  • Detractors: With a rating of 0-6; they are generally dissatisfied, lack loyalty, inspiration and motivation and may not recommend the organization to others
eNPS= %of promoters - %of detractors

For instance, if your organization has a total of 100 employees and 61 are promoters, 18 are detractors and 21 are passives, then your eNPS= 61%-18% = 43

The higher the eNPS, the more advocates you have. This suggests you will have an ecosystem of high percentage of employees that are loyal, inspired, motivated and committed. 

enps

Why does eNPS matter?

For growing organizations like yours there are several reasons why eNPS matters to create a sustainable workplace. Such as —

1. Get a picture of your employer branding

Research shows that the majority of candidates read six reviews before forming an opinion about a company and 70% of people look to reviews before they make career decisions

With employee NPS, you will know how likely your employees are to recommend your organization to others outside. This ensures employer branding which determines the quality of talent you will be able to attract. 

By ensuring a good Net Promoter Score from employees, you will be able to manage the reviews effectively. 

2, Identify your advocates in a simple and quick manner

Employee NPS is very easy to execute, fast and cost-effective. At the same time, it gives you a clear picture of who are the advocates for your organization vs those who are disengaged and are unlikely to make recommendations. This information has two-fold benefits:

  • You can create personalized plans to engage the different employee segments based on results
  • You can leverage the reasons your promoters or advocates list for high level of loyalty and focus on enhancing the same

3. Reduce employee turnover

It is very rare that an employee will one day decide to leave your organization out of nowhere. Often, the decision to quit starts in advance and can be attributed to several factors including disengagement and dissatisfaction. eNPS, conducted regularly, can help you anticipate potential turnover in advance, when the employee rates low on the eNPS survey. You can use this data to fine tune your engagement plan and identify and address specific challenges. 

🚀 Predict and prevent turnover with employee experience surveys by SuperBeings. Learn more 

4. Hire faster

As stated above, eNPS directly impacts the quality of the talent you attract. Similarly, it also impacts how fast you are able to close an open position. If you have a high eNPS, you will receive a higher inflow of applications because your organization will be branded as a preferred place to work. This higher number of applications will translate to faster interviews and closures. Invariably, this will prevent the loss of work hours between transitions. 

5. Gauge employee trends over time

Finally, eNPS can help you track employee loyalty and engagement over time. If individual and overall employee NPS increases, it reflects that your interventions are moving the needle. However, if the score drops, you may need to relook at your practices and understand the root cause. 

Employee NPS cycles

As mentioned before, employee NPS is generally measured with eNPS surveys. Therefore, like any other feedback cycle, your eNPS surveys should also follow a structured and cyclical approach. Here are to create an effective eNPS survey process —

1. Ensure anonymity

Make your eNPS ratings confidential and anonymous. Do not force your employees to give names along with ratings or do not disclose ratings of one to another even if you know who it is from. One of the easiest ways is to use a platform that doesn’t capture respondent data, except the rating. Anonymity will help build employee trust and ensure honesty in the rating received

2. Keep it short

Refrain from adding too many questions in your eNPS rating. A maximum of 2-3 questions is more than enough. While most organizations use 1 central or core question, you can supplement it with another one to augment impact. For instance, one question can be about probability to recommend, while the other could be on motivation, inspiration.

3. Make it frequent

Having an eNPS rating at regular intervals is important. Ideally, as a growing organization, you should have a monthly cadence. However, if that seems overwhelming, you can start with a quarterly rating, and gradually increase the frequency. 

4. Use a 10 point rating scale or open ended questions

While a 2 or 5 point rating scale can also capture data, a 10 point scale and open ended questions enable employees to be more specific about their answer by giving them more options to choose from. The deeper your eNPS survey insights are, the more accurate actions you can take to improve your score.

5. Follow up

Just because responding to an eNPS question requires one click, you cannot assume that you’ll receive 100% participation. You must follow up a couple of times. Using employee survey tools to increase survey participation rate can be useful here. For example, SuperBeings sends reminders and follow up nudges at preset intervals via existing chat tools (Slack, Teams, Gchat etc) directly in the flow of work to maximize response rate. 

6. Encourage authentic answers

Finally, you must encourage your employees to be honest in their rating. Anonymity will help you achieve this. Additionally, explain to your employees that the answers will not have an impact on their appraisal and their negative rating will not land them in a backlash. 

eNPS survey questions

As a best practice, you can start your employee NPS survey with a core question and then you could follow it up with a few open ended questions. Your first question must follow a rating pattern to get your employee Net Promoter Score. Some of the questions can be:

  • How likely are you to recommend your organization as a workplace to your friends/ peers?
  • On a scale of 0-10, how inspired do you feel to work at this organization?
  • What is the primary reason for the score you gave?
  • What can the organization do better to get a higher score?
  • What is one reason that is preventing you from recommending the organization to your friends?
  • What is one reason why you enjoy working here?

Here are a few best practices you can use while preparing your follow up questions:

  • Don’t be too vague with your questions
  • Try to keep your questions open ended to get support for your core questions
  • Try to get specific answers with 1 or 2 instances

What is a good employee NPS score?

While it is difficult to pinpoint the exact score which can be considered good, there are a few ways to measure how well your performance has been on eNPS. 

If you look closely, by formula, your score can range from -100 to +100, depending on the ratio of your promoters and detractors. Generally, any positive score, that is, a score above 0 is considered to be a good starting point. This indicates that there are more promoters in your organization than detractors. This translates to the fact that more employees are likely to recommend your organization than those who will not. 

However, only a positive score is not the end of the story. While a positive score represents retention and recommendation, the higher the score, the greater will be propensity and impact.

Use eNPS benchmarks

Furthermore, you must also align your eNPS with other organizations in your industry. For instance, while 60 might be a great score, if all organizations in your industry have an eNPS of 70+, then you may need to relook at your numbers. 

Here, studying industry benchmarks can help. However, eNPS is not a data point that is publicly available that you can consume. 

At the same time, your own eNPS can also be a benchmark for you over time with an aim to increase every time. The idea is to track your own company’s fluctuation, positive or negative, to identify the reasons or interventions behind the same. 

Unlock top engagement survey question templates and advanced employee analytics. See SuperBeings in Action

How to improve employee NPS?

eNPS surveys can disillusion even the most people friendly organizations. It is not rare to have a survey score below expectations. But improving eNPS is easier than you think:

1. Capture eNPS regularly

You must have heard that what gets measured, gets improved. The same is true for eNPS. When you capture employee NPS on a regular basis, you can track fluctuations and gauge whether or not the needle is moving. You can get a real time picture of whether the promoters or the detractors are increasing. Furthermore, the fluctuations can help you identify how specific interventions or regular organizational activities impact eNPS. 

2. Share the results

No matter what the results say, share it with your team members. Even if you have a negative score, share it with the team to facilitate collaborative thinking on what is going wrong. This will help you create an image that you are truly listening to your employees and are taking action. After sharing results, follow up and communicate the next action steps so your employees know that their voices are being heard and impact is being created. 

3. Understand the rationale

To improve eNPS, you need to understand the rationale or the reason behind each rating. Here, you should ask follow up questions to your employees on what contributed to this particular rating. On one hand, it will help you understand the motivation or the inspiration for promoters as well as you will be able to identify what is stopping detractors from recommending the organization to others. 

Put simply, the factors mentioned by promoters can be augmented and focused on, while those from detractors must be addressed or resolved 

4. Take action 

Once you share the results and engage in collective brainstorming, you must take action. 

  • Example 1: If the major reason behind low eNPS is lack of work-life balance, your focus should be on addressing the same, by facilitating workplace boundaries. 
  • Example 2: If lack of career growth is stopping your employees from recommending the companies to others, investing in mentorship, learning and development, career coaching, etc. can be extremely helpful.

5. Communicate with all segments

If you think that you only need to focus on detractors to improve your eNPS, you are mistaken. While you definitely need to pay attention to them, the other two segments, i.e. promoters and passives must not be left attended. 

  • When it comes to detractors, your focus should be on their pain points, how it translates to a poor experience and what you can do to reverse the same. 
  • For promoters, while you may think they are happy, engaged and don’t require any intervention, you must not lose attention on them and focus on keeping their rating high. Furthermore, when you communicate with them, you will be able to get insights for long term strategies. 
  • For passives, focus on understanding what would make their experience within the organization and the role even better and more meaningful.

6. Improve continuously

When it comes to improving your eNPS, there is no stopping point. Just because you improve your eNPS by 20 points, doesn’t mean you have reached the pinnacle, even if you are above the industry average. 

  • While in the first few years of your employees’ lifecycle, you will focus on retention and loyalty by ensuring a positive score,
  • In the later years, your focus should be on making the employees feel inspired, motivated and committed to unleashing high levels of innovation and productivity. 

7. Follow up with more comprehensive feedback

Employee Net Promoter Score must be a part of a more comprehensive employee feedback framework. The idea is to get more qualitative feedback and insights to compliment the score. You can use open-ended survey comments for this purpose. Such feedback will help you understand where the score came from and how you can take steps to move in the right direction. 

8. Understand the passives

Finally, to improve your eNPS, you need to focus on the passives. Based on the formula, you might think that passives have no role to play in eNPS. However, you must understand that they are just one point away from falling in the detractor or the promoter category. Here, your focus should be on moving them up the spectrum. Getting qualitative inputs from them is very important as they have some level of commitment and positive regard towards the organization already. 

How to use employee NPS for better engagement

With eNPS, you can turn employee feedback into a growth strategy both as a business and as an employer. Here’s how:

1. Boosts morale

First, employee NPS boosts the morale of employees who believe that their voice has value and is being heard. It makes employees feel included in the process of building the right culture. Employees who participate in eNPS come with a sense of pride as being a contributor to building the overall experience in the organization. It also comes with a sense of respect when an organization asks the employees for their perception.

2. Understand level of disengagement

Low or negative eNPS is a clear indicator of the level of disengagement. It shares an inverse relationship.

Lower the eNPS, higher will be the disengagement

Obviously, only when employees feel disengaged at work, will they not recommend it to others in their network. This can act as initial information for your organization to create strategic plans to reverse the trend. Furthermore, fluctuations in eNPS can be useful when it comes to sudden disengagement which may not be very apparent, but can lead to mass turnover. 

3. Gauge factors contributing to engagement

A deep dive into the qualitative aspects of eNPS can help you understand the factors contributing to engagement or disengagement. For instance, if a promoter claims that they gave a high score because of the focus on wellness, it becomes clear that wellness programs can augment engagement. Similarly, if the reason for a detractor is high workload, effective distribution can help improve engagement levels. 

Increase employee NPS with SuperBeings

Creating, communicating and analyzing employee surveys can be intimidating and time taking. To conduct eNPS in a comprehensive and hassle free manner, you can partner with SuperBeings. Here’s what you get with our employee engagement survey feature —

  • Built-in survey templates: Reduce the time to create survey questionnaires by using science backed, best practices pre-built survey templates. You can customize them as you need.
  • Choose the most suitable rating scale: You get full flexibility to customize each question by choosing from a wide array of rating scale options — 2, 5, 7 or 10 point scale, multiple choice and open-ended.
  • Filter options for better comparison: For each question you can filter the responses at manager, department or org level and compare them on a single dashboard. Also, you get deeper insights into each question on the Insights tab
  • Use comments for qualitative feedback: Understand the sentiments behind each response by looking into open-ended comments left by participants
This is just the tip of the iceberg of what you can do with our engagement survey tool. At SuperBeings, we are constantly trying to improve the engagement processes and make it easier for the people leaders. 

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7 Steps to Effective Performance Management You Need to Know

“Most organizations fail to manage performance effectively because they fail to look into the system holistically.” - Pearl Zhu, Author of Performance Master

The impact of having an effective performance management system goes way beyond hitting quarterly targets, it also facilitates employee development, high levels of retention and a high performance culture. 

Yet sadly, most organizations do not spend nearly as much time and resources into planning and developing a wholesome performance management process as they do chasing goals.

In this article, we break down the components of an efficient performance management system and how you can achieve them in 7 easy steps.

7 tips for effective performance management

We spoke with several HR practitioners and below are the 7 steps they recommend to build a super effective performance management system.

But before that, it’s important to understand that — 

Improving performance is a collective responsibility. And it starts with shifting the mindset around performance — from appraisal to improvement, from annual to continuous. 

As HR leader and author of Nothing About Business says —

“Performance management is so tightly integrated with the business that Business has no option but to do it on its own.” 

1. Adopt a continuous approach

First, you need to start with a continuous approach to make your performance management effective. Simply relying on traditional approaches of annual check-ins, feedbacks and reviews will have limited impact considering the dynamic and volatile market ecosystem. To adopt a continuous approach for effective performance management, you should:

  • Promote regular check-ins and employee pulse surveys
  • Facilitate consistent and dynamic goal setting
  • Foster a culture of constant appreciation and recognition
  • Ensure frequent feedback, evaluation and interventions
  • Set regular cadence to reflect on diverse aspects of performance management

Read our detailed article on Continuous Performance Management to learn more.

2. Capture performance feedback regularly

Next, a major component of strategic performance management is capturing and analyzing performance feedback. You need to ensure that your employees are offered adequate and comprehensive feedback on their performance and areas of development are worked on. 

You can use our Performance Review Phrases template for such performance feedback recommendations.

At the same time, there should be focus on seeking feedback from your employees for self evaluation and to understand what they feel about their work and the organizational culture as a whole. 

Here adopting an employee feedback tool can enable you to find success easily. It can help you to not only capture feedback, but also generate insights and share heatmaps on how certain areas of performance can be improved, which is essential for finding success with your performance management initiatives. 

3. Facilitate meaningful 1:1 conversations

A good performance management goes way beyond just reviews and evaluations on how the performance of an employee has been. You need to equip all your line managers and leaders within the organization to conduct powerful and meaningful 1:1 conversations with their team members. 

The right conversations have the potential to preempt any potential risk of turnover, drop in productivity, low levels of motivation etc.

Once you have been able to identify any potential challenge, you need to ensure that the conversations take a new avatar. The idea is to have conversations that can address the surfacing risks. 

However, conducting directed conversations on different challenges can be overwhelming at times. Therefore, you may want to leverage a guided 1:1/ Meetings tool to train and equip your managers.

4. Identify learning opportunities

Based on the feedback, conversations, reviews, surveys that you conduct, you will have a clear picture of what factors are promoting high performance and which ones are deterrents. The latter ones form the areas of development and learning opportunities. You need to identify these areas of intervention and provide your employees with adequate resources and support to hone the skills and competencies that are needed for effective performance. 

Pulse surveys can be an effective way to gauge employee sentiment on a regular basis. 

Frequent pulse surveys are excellent for understanding how employees feel about their current capabilities vis-a-vis their role and the external support they need.

Ideally, you can also look at industry benchmarks to understand the types of learning opportunities available for different roles and provide them to your employees. 

Thus, to make the most of your performance management, you need to identify and acknowledge the strengths and weaknesses of your organization as a collective measure of your employees and work towards them.

5. Promote coaching and mentoring

While effective performance management requires learning and development interventions, it is equally important to focus on guidance via mentoring and coaching. Your employees need the right mentorship to help them navigate through professional challenges that may not require upskilling but a change in mindset. Here setting up a formal mentorship program can contribute to effective performance management. 

Read: How to use employee coaching to unlock performance

You can also enable your managers to provide the right mentorship and coaching support. You can count on SuperBeings to help you ensure the same. 

  • On one hand, it offers opportunities for manager development with a focus on key leadership competencies that can enable your managers to become better leaders.
  • Additionally, the guided 1:1 conversations act as a mass coaching initiative where gradually your managers will master the art of coaching and mentoring. 

6. Navigate collaborations

Undoubtedly, a key step for effective performance management is to navigate collaborations for different aspects of the employee lifecycle. You need to adopt the right tool to capture employee pulse, feedback, review, facilitate continuous performance improvement and much more. Fortunately, today you can find all these features in a unified solution to relieve yourself from the costs of different tools and the added administrative hassles. 

7. Ensure recognition and reward performance 

The last and the final step for effective performance management is to ensure that you recognize and reward a job well done. This will catalyze a high performance culture by positively reinforcing those who performed well and encouraging others to improve their performance in a bid to achieve rewards and incentives. A few things to keep in mind:

  • Recognize efforts and results
  • Track performance continuously to reward consistency
  • Ensure that recognition translates to rewards, even if it is just an extra day off
  • Encourage career planning and mapping to illustrate recognition

Importance of effective performance management 

Before we finish, let’s quickly discuss the tangible benefits you will get if you have a solid performance management system. This will help you build a stronger case for performance management and secure leadership buy-in.

1. Employee development

Efficient performance management can help you in facilitating the right development opportunities for your employees. Based on a combination of expectations, feedback and conversations, you can enable your team members to grow in their professional journey. This will also facilitate higher retention

94% of employees say they would stay at a company longer if it invested in their learning and development. 

2. Organizational success

Effective performance management has the potential to create an equal impact on organizational success. When the performance of the teams and individuals increases, it will invariably positively impact the organization as a whole. As employee performance becomes better, productivity, quality of work and other related parameters also improve and impact the bottom line. Furthermore, it leads to creation of a high performance culture. Research shows, that good company culture could help you increase revenue by more than four times

3. Strategic allocation

If your organization is growing fast, you may have financial and budget constraints to spend towards employee development and training. 

47% of HR leaders are not aware of employee skill gaps, and 60% of HR leaders say that building new skills and competencies will be their top performance management priority.

An efficient performance management process can help ensure that you are able to allocate your resources to interventions that actually make an impact and eventually monitor, track and measure the return on investment

4. Clarity of expectations

Performance management goes beyond feedback and performance evaluation. In fact, it actually starts with creating a clarity of expectations. 

Most fast growing organizations are chasing multiple priorities and this leads to a confusion among employees on what is expected out of them. In fact, only 50% of employees would “strongly agree” they know what’s expected of them at work. A practical performance management process can help you and your managers create a clear path for employees with a focus on OKRs to ensure everyone is on the same page

5. Better engagement

Finally, performance management sets the stage for greater levels of engagement and a better employee experience. When employees feel valued and believe that you are taking genuine interest in helping them grow, the motivation, morale and commitment is bound to rise. As a result, they will be more engaged at work which will eventually show in their performance, productivity and quality of work. The impact on the bottom line is also phenomenal. 

Companies with a highly engaged workforce are 21% more profitable

Get started with effective performance management

Use the following resources to get started on everything you have learned so far —

And finally, to see how SuperBeings can help, talk to one of our experts today.

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