ADMS 2600 Chapter Notes -Offshoring, Corporate Social Responsibility, Six Sigma
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UNIT 1 – September 10th, 2013
Human Resource Management
•The process of managing human resources (human capital and intellectual assets) to
achieve an organization’s objectives.
•Staffing the organization, designing jobs and teams, developing skillful employees,
identifying approaches for improving their performance, and rewarding employee successes
are as relevant to line managers as they are to the HR department.
•Competitive advantage through employees: Employees have to be selected and motivated
to be better.
•Human capital is the knowledge, skills, and capabilities of employees that add economic
value to an organization. Even if some key people leave, it’s important to have others in the
oEx: CEO of Saatchi & Saatchi gets fired by the board and stock plummets; the CEO
and his team were the human capital.
•Human capital and HRM
oCreation of knowledge
oUtilization of knowledge
oApplication of knowledge
•It’s foolish to let talent go after developing them, so companies like Sun Microsystems ask
employees to work on long-term projects or take unpaid vacations in tough times.
•Brain waste : the biggest mistake that companies make is not using the human capital they
have. Many workers are underutilized. For example, failure to recognize foreign experience.
•A way of applying knowledge is to post ideas, wisdom, knowledge, problems on an intranet
to share solutions or best practices so that other units can benefit from this shared
Impact of HR
•The impact of HR functions is dramatically positive; positive gains, more profitable, etc.
o15% of relative profit derives from HR studies
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oIncreased financial success
•Two main ways of affecting businesses
Most expensive cost is labour, representing approx. 80% of running the
businesses, meaning this needs to be controlled
Managing turnover and absenteeism
Hiring an employee is estimated to be about 1 years’ worth of salary
oMore productive employees
Doing things faster, better, or cheaper with the same number of employees
Key HR functions of selection : HR planning, performance appraisal, training,
The HR manager should be able to outline the cost/benefit analysis of a
•Most pressing competitive issues:
oResponding strategically to changes in the marketplace
oCompeting, Recruiting and Staffing Globally
oAchieving Corporate Social Responsibility and Sustainability Goals
oAdvancing HR with technology
oContaining costs while retaining talent and productivity
oResponding to the demographic and diversity challenges of the workforce.
•HRM systems can help organizations can help provide products faster, better and cheaper
A process used to translate customer needs into a set of optimal tasks that
are performed in concert with one another
3.4 defects per 1 million products
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