5 KPIs to track & improve the employee experience

The employee experience is increasingly important for organisations and their HR functions, however, it needs to be tracked and improved through a number of specific KPIs

The employee experience is increasingly important for organisations and their HR functions, however, it needs to be tracked and improved through a number of specific KPIs, writes Kate Messenger

In 2015, we learned that Airbnb’s chief HR officer had reframed himself as chief employee experience officer. It made sense – bringing together traditional HR functions, along with employee communications, plus facilities, food, and global citizenship, to support a productive culture and retain top talent. Since then other businesses around the world, including several here in Australia, have also appointed heads of employee experience within the HR team.

Observers have championed the idea. Jeanne Meister in Forbes reported that “HR leaders are leading this effort by reaching outside of the HR function to partner with heads of real estate, IT, marketing, internal communications, and global citizenship to create one seamless employee and customer experience.”

Symbols are certainly powerful in shaping cultures, and it says something to both leaders and employees when an organisation stops calling its people a ‘resource’ and starts caring about their ‘experience.’ But can a new title actually change an underlying dynamic of siloed business thinking, to address the entirety and substance of the employee experience?

Clearly, our experience as employees is shaped by HR, communications and office design, but it’s also defined by our manager and our interactions with customers, our dealings with finance and IT teams, our feelings about the marketing, the CEO and how the product works. So there can be no great employee experience where the organisation isn’t genuinely aligning all business areas: people, product development, external marketing and operational decision-making.

“Perhaps employee experience isn’t best addressed by only a job title, any more than customer experience is”

Will the new head of employee experience and the existing head of marketing work together on a day to day basis, better than when the role carried an HR title? Or will employee experience and operations teams find a better way to align their priorities than HR and Ops did the year before?

Perhaps employee experience isn’t best addressed by only a job title, any more than customer experience is. A better approach may be to think about these issues as ecosystems: where multiple forces interact and affect the organisms within it, who in turn interact with each other. That seems much messier than handing the employee (or customer) experience problem off to some brave senior exec to ‘own’. But whatever the titles, we need to bridge organisational divides.

New roles or working groups can work to steer employee experience, only where that person or group has the scope to significantly contribute to decisions made in operations, sales or technology. And in some organisations we see, where the right person occupies an existing role, like internal communications or corporate affairs, there are already real efforts to align employee experience, brand, sales and operations.

There are also opportunities to connect skills and align priorities by asking senior leaders to take new roles, across traditional divisional boundaries. In the case of Forrester, for example, the new head of employee experience, Jon Symons did not come from HR but from communications. Less closely related internal appointments might be even more powerful: but would it make sense to give the head of HR role to a senior sales person, or vice versa?

“A better approach may be to think about these issues as ecosystems: where multiple forces interact and affect the organisms within it, who in turn interact with each other”

At a conference recently, I spoke to Natasha Ritz at Lush Cosmetics about their related, interesting approach to inject cross-silo, complementary thinking into key decisions. Apparently, managers and directors in that business are assigned partners – peers from another part of the business – with whom they share decision-making: brand with finance or product, HR with marketing, and so on.

Ultimately, of course, the CEO/MD has the remit to look across divisions and drive alignment. It’s not sustainably possible for a single person to check every decision and trade-off across a large business, but they can set clear priorities with measurable goals. Where it’s important to the CEO, employee (or customer) experience can have a place on the agenda at every exec session. And rather than being individual job titles, it can be a KPI for all roles, with everyone held accountable for their impact on experience metrics – alongside other key indicators like shareholder value and sustainability.

Under recent CEOs, Westpac has increasingly put NPS on everyone’s scorecard and provided guiding principles in a service promise that is discussed weekly at all levels of the business, to help people improve the customer experience. Under David Thodey, Telstra had a similar organisation-wide focus on the customer. The same approach could work for employee experience in any business, where the leadership believes it matters.

The challenge then would be to agree a useful measure of employee experience. Is it just employee satisfaction?

“Ultimately of course, the CEO/MD has the remit to look across divisions and drive alignment”

Again a parallel can be drawn to customer experience. It’s not enough to measure only how customers feel (satisfaction) or whether they’d recommend (NPS). They may be delighted by an experience that is still not the best experience it can be. For example: if the customer experience doesn’t make it easy for that customer to find some products or services that would be valuable to them, then they will receive less value – and buy less. We can imagine how they might report themselves as very satisfied, or say they’d recommend the brand, because they don’t know what they’re missing.

Equally, employee experience should be assessed by more than employees’ mood. It might be a combination of a number of factors:

Satisfaction/emotion: how happy, likely to stay, likely to recommend (stated, usually measured through staff surveys)

Motivation: is the experience meeting employees’ underlying psychological needs for autonomy, relatedness, achievement and purpose (stated, usually measured through staff surveys)

Performance/behaviour: is the experience encouraging productive and sustainable behaviours, like collaboration and innovation (observed where possible)

Business outcomes (metrics like retention, efficiency or sales)

Audit: the key touchpoints of an employee experience can also be mapped, exactly as is done for customer experience, and assessed against comparable businesses. So if you’re a bank aiming to be more agile, you could review your employee experience against your top bank competitors, or against businesses displaying agility in other sectors, a software developer for instance (audit).

Several of our clients are working on better ways to measure what might be called employee experience, but it’s probably fair to say no one has cracked this yet. It would be worth the effort. And ultimately it will be more useful if any agreed measure considers something more than only employee satisfaction, perhaps something closer to what’s usually meant by engagement – employees getting more out of AND putting more into their work.

Image source: iStock