Applying Six Sigma Techniques to Human Capital Management
Short summary:
management of human capital gets built into the way that an organization does business. ... Best Practices in Human Capital Management: There is one category ...
Long summary:
W HITE P APER Applying Six Sigma Techniques to Human Capital Management By Laurie Bassi and Daniel McMurrer July 2006 Introduction 1 ©2006. McBassi & Company, Inc. Introduction In an increasingly knowledge-intensive and global economy, superior management of human capital the skills, talents, and knowledge of an organizations employees is arguably the only sustainable source of competitive advantage for an organization. Yet many firms remain surprisingly unsophisticated in managing their human capital, placing their success, if not their survival, at risk. Why this lack of sophistication? The reasons are many. They include the dearth of analytic capability within most HR departments, as well as external accounting and reporting requirements that continue to foster industrial era mindsets and human capital investment behavior. The problems that result can range from difficulty in retaining key employees to missed opportunities for growing market share and revenue. Although there is no silver bullet for correcting this situation, there is an important and typically overlooked solution: the development of better systems for measuring how an organizations human capabilities contribute to its business outcomes. Developing such systems for an organization is neither difficult nor expensive. All that is required is more creative and clever use of a standard HR tool the employee survey. How to use employee surveys more cleverly? By borrowing a few basic analytic techniques from six sigma, it is possible to identify, with considerable precision, the unique people-related drivers of an organizations business results. At this point, we can almost hear you thinking one of three thoughts: 1. Holy cow! Six sigma is a big pain, what with all of those Black Belts running around with their fishbone diagrams, and the monstrous training and certification processes that are involved. (If this is you, please stick with us. We hope to convince you that it wont be too painful, and that whatever pain you experience will be more than justified by the benefits you enjoy.) 2. Give me a break! Theres no reason why the HR function requires that type of rigor. (If this is you, you should perhaps stop reading now. This article isnt for you.) 3. Right on! Its about time. Tell me more. (We will read on.) By borrowing a few basic analytic techniques from six sigma, it is possible to identify, with considerable precision, the unique people-related drivers of an organizations business results. First, a Few Definitions 2 ©2006. McBassi & Company, Inc. First, a Few Definitions So, what is meant by human capital management? By this, we mean the practices, processes, and systems that are used to manage and develop employees. We have found that these practices, processes, and systems can be classified into one of five major categories leadership practices, employee engagement, knowledge accessibility, workforce optimization, and learning capacity. 1 A discussion of what we ...
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