Lever 4: Aligning Employee Experience Measurement

Earlier this year, we began to explore the concept of employee experience. Since then, we talked to over twenty organizations to understand their approach to employee experience and identify leading practices. Now, this is the fourth and final article highlighting our findings. A huge thanks to Medallia for sponsoring this research!

Throughout our research, we identified four levers of employee experience to create sustainable results. This article focuses on one of the employee experience levers – aligned measurement – and is just an excerpt from the main report.

Most of us know the old, yet wise, saying: “what gets measured is what gets done.” This saying holds true especially for employee experience in that organizations’ measurement approach – and their relative level of sophistication – can not only dictate what they know about employee experience but also how they bring it to life.

This is why it is especially critical to have an aligned measurement approach. In our conversations, two themes of an aligned measurement approach rose to the surface and we explain them in detail in the sections below.

Analytics maturity: Employee experience measurement aligned to data analytics capabilities

Our research revealed that many organizations decide how to approach employee experience based on the sophistication of their people analytics capabilities (see Figure 1). Taking a close look at organizational capabilities to measure and analyze employee experience can certainly save a lot of headaches.

Figure 1: Immature vs. mature data analytics approach to employee experience | Source: RedThread Research, 2019.

Immature data analytics capabilities: Use a prescriptive measurement approach

At first, organizations with immature people analytics capabilities often struggle to figure out how to measure and analyze employee experience data. Our research showed that leaders at these types of organizations were more likely to rely on a prebuilt employee experience measurement model and to measure experience using pre-established experience definitions. This prescriptive approach can be extremely effective in helping organizations get started quickly. These existing models are effective across a large number of organizations and can help leaders get quick access to relevant and actionable insights.

When using a prebuilt model, organizations typically ascribe to the particular “moments that matter” or “touchpoints” perspective of the vendor with whom they partnered. When organizations pursue this path, they should consider if the prebuilt model extends to their specific organization or if there are particular “touchpoints” they need to add or remove. Given our perspective that employee experience is about both the emotionally laden events (which are often touchpoints) and everyday exchanges, we encourage leaders to ensure that their approach also accounts for measuring people’s perspectives across the board, not just at specific touchpoints.

Finally, these organizations often assign measurement and analytics to the wider HR function which may have minimal analytics expertise. In cases where they have a people analytics team but opt to bring in external resources, we also find that these organizations may run their employee experience efforts without the substantial involvement of their people analytics team. This can be tempting (and sometimes more expeditious in the short-term) to jumpstart an employee experience effort. However, we also encourage organizations to bring along their people analytics functions as much as possible, as the entire organization will eventually benefit more from an aligned approach.

“We hope to be able to marry our employee survey feedback and results with some of our business performance and customer satisfaction data. By comparing different KPIs that we use for the business with employee outcomes, we aim to provide our leaders with key insights to make decisions confidently.”

Kate Miller, Director of Employee Experience, Robert Half

Mature data analytics capabilities: Use a descriptive measurement approach to determine what matters to employee experience

By contrast, when an organization has a mature people analytics capability, the employee experience and people analytics teams are more likely to partner closely. These teams tend to identify critical outcome metrics (more on those below) and then leverage existing data sources to determine which aspects of employee experience influence those critical metrics.

While this approach does not necessarily reject a “touchpoints” framework, it tends to rely more heavily on interactions that are already measured. As such, it may include interactions beyond those found in a prebuilt measurement model. It may also exclude interactions or touchpoints for which there is not a current measurement need.

The advantage of this type of descriptive approach is that it is a custom-built model for the organization. Thus, it is more likely to influence relevant organizational outcomes (versus a more generic prebuilt model). Further, this type of approach has broad buy-in and is likely more sustainable over time because it takes into account meaningful measures and organizational outcomes. However, this approach can have limitations if touchpoints that could influence employee experience are rejected for measurement simply because data collection methods are not already in place.

Outcome metrics: Data analytics strategy aligned to relevant business metrics

Even though it may be tricky to quantify employee experience itself, organizations pay close attention to the specific metrics or outcomes they use to measure the success of their employee experience efforts. The most common one we heard in our conversations was employee engagement. This is perhaps because organizations have long used employee engagement as the “be-all and end-all” of people metrics.

However, throughout our research, we learned that in addition to considering employee engagement as an outcome of experience, progressive organizations are also considering other types of metrics. They recognize that employee experience may impact other organizational performance indicators, and as such, they keep an open mind to the metrics they consider as outcomes of employee experience.

For example, some progressive organizations may use a net promoter score (NPS),1 a customer satisfaction score (CSAT),2 an employee satisfaction score (ESAT),3 or an organizational health index score (OHI)4 as business outcomes of employee experience (see Figure 2).

Figure 2: Example of business metrics considered as outcomes of employee experience efforts | RedThread Research, 2019.

Others are willing, actively searching for, or developing an employee experience index that can measure experience itself and aggregate their most important performance indicators as relevant outcomes of employee experience.

For more on this and other levers of employee experience – and examples of how companies have brought them to life – we encourage you to download and read the full report.

1 Defined as an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. Source: “Net Promoter Score,” Medallia, 2019.
2 Defined as a basic measurement of a customer’s satisfaction with a brand’s product and/or services. Source: “What is Customer Satisfaction Score (CSAT)?” Nicastro, D., CMS Wire, 2018.
3 Defined as a basic measurement of employees’ self-reported satisfaction with the business in which they work in addition to the extent that their wants and needs are perceived to have been met by the organization. Source: “How to Calculate ESAT (Employee Satisfaction) and Why it Should Matter to Your Business,” Buenaventura, M., Task Us, 2016.
4 Defined as a leading indicator of sustained performance, measuring organizational health relative to a global benchmark. Source: “Organizational Health Index,” McKinsey & Company, 2019.

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