Editorial
Organizations that prioritize and enhance their employee experience (EX) have demonstrated remarkable financial and operational benefits. Research has consistently shown that such organizations can achieve revenue and profit increases of more than 50% compared to their peers. In addition to this substantial boost in financial performance, they also report elevated levels of employee engagement, reduction in absenteeism and heightened customer satisfaction.
However, despite the compelling business case for investing in employee experience, many organizations grapple with the challenge of quantifying its impact systematically and comprehensively. This difficulty often leads to skepticism within the organization about the actual value of EX initiatives and a reluctance to allocate resources toward them.
One common critique of current EX measurement practices is the perceived intangibility of the data collected. Many organizations rely on surveys, Net Promoter Scores (NPS), and Employee Experience Indices (EEIs) to assess EX. However, critics argue that these metrics fail to measure the impact of the employee experience accurately. While there is some truth to this critique, the more significant issue stems from attempting to explain the impact of EX as one holistic measure.
Instead of seeking a singular impact measure, adopting a multi-tiered perspective on EX measurement is more effective to understand both direct and indirect impact. This entails evaluating the employee experience at various levels and examining how different metrics contribute to a comprehensive understanding of its impact across the organization.
A Three-tiered Model of EX Measurement
To effectively measure EX, it is essential to distinguish between three different tiers, each contributing something unique to a holistic understanding of EX. These tiers all exist in relation to each other. As such, it is essential to focus on all three tiers when assessing the benefit of employee experience within the organization. There will be more data points to consider at the operational EX level, while impact should focus on more targeted and specific measures.
Level 1: Operational EX Measurements
The first level refers to the operational EX metrics that provide direct feedback concerning the identified moments that matter for employees within the EX journey. As part of EX design, these measurement moments must be identified and monitored to understand if the desired EX is taking place.
At this level, we want to get direct feedback from employees, and as such, the feedback channel includes pulse surveys, focus groups, and employee reflections in key moments. Many organizations use basic descriptive statistics to monitor these data points and report on these moments in a longitudinal manner.
Example:
Corp Inc. has identified the talent acquisition journey as a critical employee experience moment for new talent. Within this employee journey, three moments matter:
- The screening discussion with the recruiter.
- The interview experience.
- The offer negotiations.
These three moments are measured in different ways. The candidate receives a short pulse survey after the screening discussion and the interview that asks basic questions to assess the quality of the interaction. After the offer negotiations, the candidate receives a short call from an HR representative, who asks them a few basic questions about how they experienced this discussion.
Related Article: 5 Ways to Measure the Value of Your Employee Experience Function
Level 2: Outcome EX Measurements
At Tier Two, our focus shifts to evaluating the outcome of Employee Experience (EX) within the organization. In essence, Tier Two asks, "What difference does a positive EX make?" The metrics at this stage are less concerned with directly assessing EX itself but aim to gauge the outcomes we anticipate when EX is positive. These outcomes include longitudinal employee engagement, job satisfaction, and net promoter scores.
Given that these metrics aren't tied to specific momentary events, they should be assessed on a regular schedule. The frequency of assessment can vary depending on the organization's needs, ranging from biannual evaluations to the more traditional annual ones. At this tier of measurement, a more comprehensive understanding is essential. Therefore, a blended approach that combines quantitative and qualitative measurement methods is considered most effective.
Example:
Corp Inc. has an annual employee survey that assesses job satisfaction and employee engagement levels. The survey output is a crucial contributing data point for the people plan, and initiatives focused on improving the work environment. On an annual basis, the HR team also conducts semi-structured interviews with a sample of employees to better understand how they can improve the culture of the business.
Level 3: Impact EX Measurements
The final measurement level relates to EX's impact on the organization. At this level, we aim to answer whether having a positive EX is driving the desired results for the business. These metrics usually refer to business-level variables such as customer experience and satisfaction, brand reputation, revenue, profits, and other performance metrics.
At this level, there are various variables of influence, so it is essential to remember that EX is one contributing factor to shifting these measures. Once an organization has collected enough longitudinal data, statistical measures can be utilized to test and explain the relationship between specific EX moments and business impact. For most businesses, a good starting point is to at least start seeing these measures collectively within the same dashboard or monitoring data.
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Example:
The people analytics team at Corp Inc utilizes the data collected from tier one and tier two to better understand EX's impact on key business value drivers. Using a statistical model that they developed over time, they can showcase the direct impact that EX has on Client Satisfaction in the call center, as well as some preliminary models that show that an increase in EX directly influenced revenue gains in the last financial year.
Final Words
When measuring employee experience, it is essential to adopt a multi-tiered approach that provides a holistic view of the impact of EX on the organization. Measuring EX at an operational, outcome, and impact level allows for a more robust understanding of how a positive EX leads to improved business performance.
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