Labor turnover is one of the biggest challenges faced by Chinese firms. The make-to-order companies use human resource outsourcing which is termed as dispatched employees (people hired through an employment service agency, later dispatched to work at different companies or locations). The dispatched are not formal employees of the firm and have no employment relationship. The present paper has tried to use Six Sigma processes in HRM management. Particularly, it has chosen the DMAIC process to reduce the turnover rate by identifying the key causal factors. Using Six Sigma in HRM involves challenges such lack of theoretical research on the turnover model as theoretical support; inadequate use of typical Six Sigma tools in process improvement; more research on regular employee turnover than dispatched employees. Hence the present paper presents a framework of DMAIC process to analyze the problem of dispatched employees' voluntary turnover. A case study of a high-tech electronics company M has been presented to illustrate the application of typical tools and techniques of Six Sigma. The analysis involved building a retention model for dispatched employees based on a questionnaire. Then a preliminary model according to the characteristics of the dispatched employees has been presented. The model measures the 'retention will' to measure the dispatched employees' willingness to stay in the company where they are currently working. The response to retention will has been subjected to factor analysis and principal component regression to identify the significant factors influencing retention will based on questionnaire survey data. (17 refs.)
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