Data-Driven HR: Metrics, Learning Theory, and Motivation

Freescale's Metrics-Driven Approach to Talent Retention

Freescale operates in one of the most competitive industries globally: semiconductor development and manufacturing. The skill set required is so unique and so critical to new product development and introduction timeframes that replacing an experienced engineer can take months. The retention and development of strategically important skill sets is essential for companies competing in exceptionally fast-moving and technologically complex industries (Glen, 2006). For semiconductor manufacturers, the recruitment and retention of top talent can often carry strategic consequences as well (Guthridge, Komm, & Lawson, 2008). Their industry rewards firms that are able to stay consistently within the product lifecycle timing driven almost entirely by technology. A case in point is Motorola and its need to continually nurture a high level of employee involvement, ownership, and internalization of job objectives — and, more importantly, to foster a drive to improve over time (Srivastava & Bhatnagar, 2008).

Other companies may not share Freescale's sense of urgency for several reasons. First, there is a tendency not to place a high priority on measuring retention, on the assumption that there will always be a sufficient number of candidates for open positions. This is admittedly a complacent perception, yet even in difficult economic times — when more talented engineers may be looking for work — the very best workers are being closely managed by competitors to ensure their retention and internal growth. Second, other companies may not focus on measuring retention effectiveness at the managerial level because their cultures do not treat it as a core value. Third, there may be a traditional assumption that retention is the role of human resources rather than the responsibility of the engineering and design managers themselves — as is clearly expected at Freescale.

The semiconductor industry's relentless pace of technological change makes this kind of metrics-driven approach not merely advantageous but strategically necessary for sustaining competitive advantage.

Advantages and Limitations of HR Metrics

One major advantage of making retention metrics a strategic priority is that they can lead to the development of a matrix-based approach to defining future growth opportunities and development methodologies — in short, creating a career planning matrix for key contributors (Benko & Weisberg, 2007). Second, metrics can lead to significant advantages in reducing managerial turnover, as managers can be incentivized with bonuses tied to the long-term retention of key talent. Third, the ability to deliver results consistently enables an organization to realize the experience effect (Sampson, 2005) — the compounding benefit of accumulated organizational learning over time.

The limitations of using these metrics are notable as well. First, they may introduce a level of formality into manager–employee relationships that causes managers to lose credibility or, worse, the trust of their subordinates. Second, there is the risk that metrics become irrelevant over time as organizational priorities shift. Third, managers may learn to "play" the metrics — making performance appear strong only during review cycles while ignoring the underlying goals at other times.

Extending Metrics to Employee Attitudes, Performance, and Skills

Metrics can be applied pervasively throughout management, though there are conflicting mindsets in many organizations regarding this practice. One school of thought holds that recruiting and retaining younger, talented, yet less expensive workers is a practice better suited to managers from comparable generations who intuitively understand what motivates workers by generation (Young, 2008). Contingency-based leadership theory, as defined by Fiedler and others (Fiedler & Mahar, 1979), has also shown how metrics can define the goodness of fit between a manager's leadership style and the needs of the organization. Finally, the use of Balanced Scorecard (BSC) methodologies has a significant impact on how companies measure the retention and growth of employee skills over time. In each of these cases, metrics are managed against a series of Key Performance Indicators (KPIs) and measured for variance over time to ensure managers stay on track toward their goals.

Learning Theories: How Behavioral Patterns Are Acquired

There are dozens of theories that explain how people learn, with the majority of peer-reviewed research concentrating on learning by observation and self-efficacy, behaviorism, cognitivism, and social learning. Theorists have also worked to create frameworks that encompass learned behavior in the context of strategic planning (Hunt & Sorenson, 2001). This is highly relevant in industries marked by rapid and abrupt structural changes — such as Freescale Semiconductor. Each of these theories must also account for the extent to which collaboratively based information sharing and intelligence can provide competitive advantages over time (Ray, 2007).

Learning by observation assumes that an adequate level of innate motivation is present in the employee and that the guidance received is accurate for the task at hand. It is most successful in self-efficacy scenarios, where employees have internalized the objectives of their positions and can readily see the value of the learned behavior. Behaviorism, by contrast, relies more on observable behavior and its quantification, without regard for the attitudes, beliefs, and values of the employee. Because it does not accurately gauge innate motivation — only observable behavior — its value in organizational settings is limited. It is typically viewed as just one of several strategies for defining learning programs, rather than a complete solution.

Cognitivism stands in direct contrast to behaviorism: its key components are entirely internalized within the learner. Because information processing is internal, it is not measurable through observation alone; attitudinal questionnaires and interviews are required to assess it over time. Retention strategies grounded in cognitivism must therefore be measured through internal assessments to ensure that programs resonate with key contributors. Cognitivism also implies a continual, recursive development cycle focused on relevancy as perceived by learners themselves — inherently more challenging to manage than purely observational methods.