Managing Human Capital - Harvard Business School MBA Program

Managing Human Capital

Course Number 2060

Assistant Professor Ethan S. Bernstein
Senior Lecturer Paul D. McKinnon
Fall; Q1Q2; 3 credits
28 Sessions

Introduction and Overview

Recently, at a conference sponsored by a venture/ private equity fund, there were 80 CEO's of new and growing enterprises. Some of the companies were nascent, while others had been operating for a number of years. The founders/owners were all enthusiastic about their company, and its future prospects. When asked about who reported to them, they all reported having a finance executive, a head of IT/technology, a marketing leader, and an operations expert. No one reported having someone dedicated to managing their human capital.

However, when asked about the greatest challenge they faced in growing their company, their replies were all similar: We don't know how to hire, develop, motivate, or even retain the kind of people to keep our enterprise thriving.

These entrepreneurs are not alone. As the worst of the Great Recession recedes in the rearview mirror, all companies, big and small, will be wrestling with that same challenge. The graduates of HBS, like the population at large, will all have more and more choices about where to work. And all companies, from the great global enterprises of the 21st century to the smallest entrepreneurial venture, will struggle with common questions and concerns about the people who work in their organizations.

  • What kind of people do I need?
  • How do I hire them?
  • How do I keep them fully engaged and productive?
  • How do I make sure they are properly incented to get done what the company needs them to do?
  • How do I develop our people over time, so they are prepared to take on bigger roles down the road?
  • How do we let go those who are not contributing?
  • What are our expectations of those who manage others in the organizations?
  • And how do we make sure people don't leave because they can't find a way to have a full life outside of work?
  • In summary, what kind of a culture do we want to create in our company?

In short, companies are looking to build productive, distinctive organizations that can be a source of competitive advantage. And to make that happen, they need to be places where talented people want to come, produce, develop, and thrive.

Our course, "Managing Human Capital", will be framed around all of these questions, and can be captured in a simple concept: How can I develop an organization that helps drive performance, and becomes a source of competitive advantage? And while the question is simple in concept, it is remarkably difficult to execute. We need not look beyond just the cases covered in many of the RC classes from last year, and your own experience, to see the wide range of organizational constructs that are in use in today's enterprises.

This is not a class aimed at budding HR professionals. There is probably too much to know and too few class sessions to prepare someone to be fully ready for such a challenging profession. Rather, this is a class that is built for future managers and leaders who want to more fully understand how to get the most out of the talented people who work for them. We will explore those issues and challenges that any good general manager should understand in order to be effective. In addition, we will spend time helping students in planning how they can be successful in their new careers.


We are all in the class to learn new ways to manage human capital. But we all learn differently. As a result, this course will draw on a range of different ways to learn.

Cases. The majority of the classes will be case based, using materials that highlight and illustrate issues in the management of human capital.

Research and Technical Knowledge. An article or chapter that discusses good practice for each of the levers discussed in the course will accompany most case discussions.

The Class. This is a discussion-based class, where we learn from each other. With these topics, there will be ample opportunity for people to wrestle with the best way to organize. As always, our best conversations will be when we choose to find both areas of difference and areas of agreement.

The Instructor. My career has been focused on exploring how to run organizations. I hope to share that perspective during our classes.

Guests. We will have a wide range of guests in our class. We will have guests who are protagonists in a case, subject matter experts, and successful C-Suite executives. Our goal with these guests will be to understand their perspective on the core issues of the class.

The Field. I believe we learn best when we are engaged in organizational action research. The paper for this class will require you to enter a company and get enough information to assess the effectiveness of their human capital practices. Seeing these concepts in action will help you understand what works well and what doesn't.


There will be seven modules in the course.

  1. Framing the course.
  2. Hiring and On-boarding.
  3. Evaluating Performance.
  4. Compensation and Rewards
  5. Effective Managers
  6. Talent Management
  7. Managing your own Human Capital.

In addition, we will have two classes dedicated to the project.


The final grade will be determined 60% on class participation and 40% on the final paper.

The Research Paper: Human Capital Assessment.

The final paper will be a Human Capital Assessment of an organization of your choice.

Work in groups of no more than three.

  • The data should come primarily from interviews with people in your chosen company. You can use data from public sources to supplement the interview data
  • Focus will be on the primary levers of Organizational Effectiveness that we will discuss in the course
  • The paper should contain your findings, analysis and recommendations for improvement
  • Should be no less than 10-15 typed pages

The timetable for the project is as follows:

  • September (wk. 3): Establish your project teams
  • November (wk. 10): Preliminary findings and observations
  • December (wk. 15): Class Presentations
  • December (wk. 15): Final Submission

The focus of your research and assessment should be on the formal and informal processes the company uses for:

  • Recruitment
  • Onboarding or socialization
  • Measurement
  • Performance Management
  • Compensation
  • Learning
  • Development
  • Effective Managers
  • Talent Management
  • Other processes developed by the company.

The quality of the paper will be assessed based on:

  1. Research. Based on the number and quality of the interviews and the use of public information.
  2. Structure/organization of the findings. Has the information been analyzed and organized in a coherent and thoughtful way?
  3. Quality of recommendations and insights. Do the recommendations fit with the strategy of the company? Do they draw on the material we have covered in class? Do they reflect a clear point of view about the findings?
  4. Conclusions. Do your conclusions fit the data you presented? Are they practical and feasible?