Examination Assignment # 1 Marks: 10

Plagiarism cut off point: 10% Submission Deadline: 18 th October

CASE APPLICATION: INVINCIBILITY SYSTEMS

The 17,000 employees of Invincibility Systems design and make aerospace and defense
equipment such as rockets, spacecraft propulsion systems, and missile propulsion systems.
Along with cutting-edge engineering, the company stands out for its cutting edge human
resource management. Invincibility has hired quantitative experts to analyze HR data with the
same care it uses to analyze rocket trajectories. A few years ago, the company hired a
statistician and an HR planner to join a team that would collect and analyze data, looking
for factors that would predict human resource needs. The team started by looking for ways to
improve recruiting. They collected data on the various sources of candidates that the company
was using and the candidates actually selected. Then they used a statistical method called
regression analysis to identify which sources of candidates generated the most hires—as well as
the sources that generated hires who went on to perform well. Using the results of the analysis,
Invincibility made its recruiting effort more efficient. By focusing on the most productive
sources of top employees, it saves time and money that formerly had gone toward recruiting
through channels that were less fruitful. Next the HR team turned its efforts toward workforce
planning. For each department of Invincibility, the team collects data describing the workforce
—for example, job categories, years with the company, and labor force projections. It runs
regression analysis to predict the likelihood that employees will leave the company in the
coming year. The results, coupled with sales forecasts, enable the company to predict how
many new employees will need to be hired in each department. Other companies do this kind
of planning, but the extent of the analysis at Invincibility is unusual. For one thing, the analysis
is conducted on the level of individual employees. Thus it shows not only that turnover may rise
or fall, but also which employees are most likely to leave. That level of analysis is important to
Invincibility because unlike organizations where many people perform the same type of work
and can step in when someone leaves, employees at Invincibility typically fill highly specialized,
highly skilled roles. If an engineer with years of experience in developing high-caliber
ammunition suddenly departs, there may be no one else on the team with that person’s
knowledge and skill set. Another unusual quality of Invincibility’s HR planning is the variety of
factors that the planners consider when they run their regression analyses. For example, the
company has run regressions to determine whether turnover is related to changes in employee
benefits and even the month of the year. If the analysis shows that a factor has been significant
in the past, the planners take it into account in their forecasts. In one situation, the planners
found that retirements in a department rose after the company announced that it would be
phasing out health insurance benefits for retirees. More experienced workers left before
the phase-out took effect. When the company prepared to phase out similar benefits in
another division, the planners knew they would need to step up recruiting efforts there in
preparation for an uptick in retirements. Some of the data Invincibility uses for planning are
unsuitable for other kinds of HR decisions. For example, the company has found that
employees’ ages and marital status are relevant for predicting whether they are likely to leave
the company. Turnover rates are higher among unmarried employees and recently hired
employees (who tend to be younger). Thus the company plans greater recruiting efforts in
departments where it has higher levels of young and unmarried employees. It also may
consider stepping up its efforts to mentor and train employees in these departments. However,
it does not make employment decisions such as hiring and promotion based on these factors.

DISCUSSION QUESTIONS

1. Besides the factors identified, what other factors should Invincibility Systems take into
account in its HR planning?
2. What legal concerns does the data analysis at Invincibility raise? How should the
company address those issues?
3. Besides its use for HR planning and recruiting, how might Invincibility’s data analysis be
applied to improving the company’s training programs?