Human Capital Management Part II (Modules & Transactions) EGN 5622 Enterprise Systems Integration...

Human Capital Human Capital ManagementManagement

Part IIPart II(Modules & Transactions)(Modules & Transactions)

EGN 5622 Enterprise Systems Integration EGN 5622 Enterprise Systems Integration

Spring, 2015Spring, 2015

Human Capital ManagementHuman Capital Management

Part II Part II (Transactions) (Transactions)

Concepts & TheoriesConcepts & Theories

Quarles: Flya Kite IntroductionQuarles: Flya Kite Introduction 33

Importance of HCMImportance of HCMHuman resources are one of the most expensive

resources in organizations.

Goal: Hire and assign right people to the right Job at the right time and right cost which is critical to an organization.

January 2007 (v1.0)January 2007 (v1.0)

© 2007 by SAP AG. All rights © 2007 by SAP AG. All rights reserved. SAP University Alliance. reserved. SAP University Alliance. The Rushmore Group, LLCThe Rushmore Group, LLC 44

Shift of HCM views Shift of HCM views

PayrollPersonnelHuman ResourcesHuman Capital Management

◦Shift from brute labor force to quality workers get rid of the fishing nets and bring in the lines

◦Transform employees into competitive resources

Human Capital Management (HCM)Human Capital Management (HCM)Human Capital Management (HCM) modules enabling

managers to perform transactions pertaining to the HRM cycle of events.

HR Modules in SAP ERP: 1. Organizational management 2. Personnel management,

3. Payroll4. Time management5. Training and event management, 6. Travel management,7. Manager’s desktop

1. Organizational Management1. Organizational ManagementOrganizational structure including

departments, jobs, positions, and tasks of the company is designed and created to reflect its hierarchies and reporting relationships.

Basis for structuring personnel planning, development processes, and personnel administration.

Work is further defined and described through the process of job analysis.

2. Personnel Management2. Personnel Management

2.1 Personnel administration2.2 Recruitment2.3 Personnel development2.4 Benefits2.5 Compensation management

2.1 Personal Administration2.1 Personal AdministrationFacilitates the management of HR master data, Info

systems, and setting for relational data bases.

HR master data◦ Personnel actions, and Personnel files

Info system◦ Report

Employee Organizational entity (Headcount changes, headcount development, salary

accounting to seniority, assignment to wage level) Age/gender

Setting: Define organizational unit including positions and jobs

2.2 Recruitment2.2 Recruitment

2.2.1 ObjectiveObjective of recruitment is to enable the selection and hiring of

qualified applicants for a vacant position.

2.2.2 Recruitment process:◦ Create a vacant position, ◦ Determine the qualifications required of the position, ◦ advertising the position, ◦ Receive and screening applications,◦ Identify the most qualified applicants for hiring,◦ Reject unqualified applicants, and ◦ Store applicant materials of those not hired but to be considered for

future vacancies.



Recruitment - HiringRecruitment - Hiring

Hire Profile Match

Vacancy

Applicants

Advertising

Select & Notify

VacancyVacancy

Determine position with vacancies.

Define requirements required of vacant positions that will match with the qualifications of applicants.

AdvertisementAdvertisement

Make advertisements for vacancy◦May be internal or external announcement of a

position.

◦Advertisement is recorded in system, such as cost, applications, medium, and recruitment instrument



Applicant AdministrationApplicant Administration

1) Receiving applicationsAll applicants must be maintained in the system

maintenance responsibility must be delegated (one or more people)

the status of the applicant will determine the information that is needed

2) Profile MatchingCompares skills (qualification) of the applicant to the

requirements of the positioncan the applicant offer what the company needsis there another vacant position that he/she would have a better

match

3) Upon completion of qualification review and interviews the position must be filled (or closed)



Applicant AdministrationApplicant Administration

Applicant Administration functions:1) Receiving applications2) Profile matching3) Selection of applicants

• Allows a company to coordinate and monitor all the steps involved in the applicant process

Quarles: Flya Kite IntroductionQuarles: Flya Kite Introduction 1515

HiringHiring

Once qualified applicants have been identified, an offer or contract is extended.

Data transactions for hiring ◦ Make an offer◦ Assign a personnel number to the new employee,◦ transfer applicant data to a master database, where

infotypes such as planned working time, basic pay, bank details are created.

◦ Assure the EEO compliance through HR data transactions.

2.3 Personal Development2.3 Personal Development Make Performance appraisals, career and succession

planning, and career development.

Identify the preferences, potentials, and dislikes of employees for career planning and training and development purposes.

Generate a profile match up of the position’s requirements and the person’s qualifications

Appraise employee performance on a periodic basis for◦ employee development and◦ administrative purposes (to determine promotions, merit

increases, etc.).

2.4 Benefits2.4 BenefitsBenefits are crucial to the entire compensation package,

and play a vital role in enabling a company to remain competitive.

Typical benefits transactions include ◦Activate benefits infotypes for employees, ◦Enroll employees in various benefit plans (e.g., health,

flexible spending accounts, 401(k) plans), and◦Review the costs of various employee benefit choices.

2.5 Compensation Management2.5 Compensation ManagementRewarding employees with basic pay, as well as with

incentives, is a typical feature of organizational life.

Common compensation transactions include ◦Enter internal job evaluation results and external

salary survey data, ◦Generate salary structures, ◦Develop pay grades and pay scales, ◦Create budgets, and ◦Develop incentive pay.

3. Payroll3. Payroll

Release payrollStart payroll processCheck payrollCorrectionSimulationFollow upTaxOverpayment recoveryBank transfer



HCM Process: Payroll AdministrationHCM Process: Payroll Administration

may contain an international payroll driver modified for each country

may release for individual payroll areas◦ payroll run is for a specific group of employees

and a specific period of time ◦upon release all affected personnel records are

lockedgenerate an payroll results, and earning

statement, bank transfers and check payments



HCM Process: Payroll AdministrationHCM Process: Payroll AdministrationPayroll Process

◦Determine Gross Amount base pay and any other additional payment

◦overtime, sick pay, Christmas bonuses, special pay

◦Determine Deductions (Net Amount) processes garnishments, deductions, taxes, and

benefits for employees◦Federal/State Income Tax, Insurance (Health, Life),

Loans

◦Integration with Financial Accounting & Controlling G/L postings, payments processed, reports

available

Overview of the Payroll ProcessOverview of the Payroll Process

Payroll AccountingPayroll Accounting

Calculation of Remuneration ElementsCalculation of Remuneration Elements

4. Time Management4. Time Management

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Shift planningAdministration

Time dataTime evaluationWork schedule

Incentive wagesTime sheet

January 2007 (v1.0)January 2007 (v1.0)© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLCGroup, LLC 2626

Time ManagementTime Managementsupports planning,

recording, and evaluation of internal employee time data

time data that would be gathered and evaluated◦ hours worked◦ leave◦ illness◦ overtime◦ substitutions◦ business trips

conference, training


Time ManagementTime ManagementThere are multiple methods for data collection:

Time TerminalsTime Terminals

Mobile TechnologyMobile Technology

Cross Applications Time SheetCross Applications Time SheetEmployee Self ServiceEmployee Self Service

Time Time AdministratorsAdministratorsTime Manager’s Time Manager’s

WorkplaceWorkplace



Time ManagementTime ManagementTime collection will be used for:

◦payroll accounting◦personnel cost analysis◦internal cost allocations◦invoicing◦performance analysis◦capacity availability◦shift planning

Time Management ProcessTime Management Process

5. Training and Event Management5. Training and Event Management

It involves the management of employee activities associated with training, workshop attendance, and other business-related events.

Information on descriptions of programs, prerequisites, and cost factors can be generated.

6. Travel Management6. Travel Management

It enables organizations to monitor the controllable expense associated with travel, training, and entertainment.

Employees frequently travel on business, so managing this expense is essential

7. Manager’s Desktop7. Manager’s Desktop

A tool which enables managers to access employee information at a manager’s fingertips.

Through decentralization of HR tasks and responsibilities, managers can easily access HR data of subordinates, both directly and indirectly supervised, to perform administrative and organizational tasks, and to make strategic decisions

Human Capital ManagementHuman Capital Management

SAP Implementation SAP Implementation

January 2008January 2008

© SAP AG - University Alliances and © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All The Rushmore Group, LLC 2007. All rights reserved.rights reserved. 3434

Business Process IntegrationBusiness Process Integration

HCM

HCM

HCM

HCM

Org

Dat

a

Rules

Master D

ata

HCM Implementation in SAPHCM Implementation in SAP1. Recruitment, Selection & Hiring Process

1.1 Recruitment 1.2 Advertising 1.3 Applicant administration 1.4 Assign hired employee to position

2. Training & Development2.1 Personnel Development2.2 Appraisal Systems2.3 Career and Succession Planning

2.4 Qualifications/Requirements2.5 Development Plans2.6 Training & event management2.7 Cost & Planning Reporting

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1.4 Assign Hired Employee to Position1.4 Assign Hired Employee to Position

International Aspects of HCM (SAP ECC 6.0)International Aspects of HCM (SAP ECC 6.0)



2. 2. Training & DevelopmentTraining & Development

Personnel Development

Development Plan

Appraisals

Qualifications/

Requirements

Career & Succession Planning

Training

develop

based upon

generate

de

term

ine

creates



2.1 Personnel Development2.1 Personnel Development

Compare current or future work requirements with employees’ qualifications, preferences, and aspirations.

Personnel Development comprises of the following components:◦ Qualifications/Requirements◦ Appraisal Systems◦ Career and Succession Planning◦ Development Plans



2.2 Appraisal Systems2.2 Appraisal SystemsAppraisal system used in

1) Personnel Administration◦as an instrument to evaluate members of your

organization in a planned, formalized and standardized manner

2) TEMs (Training & Event Management)◦training appraisals◦attendance appraisals

3) Compensation Management◦appraisal results can be used to influence remuneration



2.3 Career and Succession Planning2.3 Career and Succession Planning1) Career Planning

A planning functionality that allows you to analyze an employees skills, preferences, dislikes, qualifications, potential and determine positions they should hold during their tenure at the company

2) Succession Planning It allows you plan for positions in the company that

will need to be filled because of turnover (or new position)

It enables a company to analyze employees and determine and prepare potential replacements



2.4 Qualifications/Requirements2.4 Qualifications/Requirements

◦It is used to define, structure, and manage your qualifications catalog

◦Catalog enables you to place requirements on positions and qualifications on employees (or applicants) within the company Perform profile match-ups (people and positions) Run reports to recognize qualification deficits and

enact training measures



2.5 Development Plans2.5 Development Plans◦Consist of a series of development measures and

information on the sequence in which they should be passed through and time requirements to provide an individual with a specific qualification

Generic Plans◦training program (all prospective sales reps must

complete a course on Fundamental Selling Techniques)

Individual Plans◦comprised of all the items that a person has completed, is

currently involved in, or will be involved in the future◦proposes needed course work (integration with TEMs)



2.6 Training & Event Management2.6 Training & Event ManagementIt involves the management of employee activities

associated with training, workshop attendance, and other business-related events.

1) Enables new hires and current employees access to the necessary resources to build job skills needed for both current and future task assignments

• this is figured through Qualifications/Requirements reports, development plans, career planning, etc

2) Encourages continual learning and professional development

• SAP offers a resource to assist in scheduling training - TEMs



Integration Points of TEMSIntegration Points of TEMS

TEMS

SDMM

COFI

HCMPersonnelDevelopment

PersonnelAdministration

OrganizationalAdministration

TimeManagement


2.6 Training and Event Management2.6 Training and Event Management Component that enables

a company to manage, track, and plan various different business events

Helps determine demand for courses and schedule dates, manage the resources, attendees, and costs associates with the event



2.7 Cost & Planning Reporting2.7 Cost & Planning Reporting

Used to analyze, monitor, plan a company’s personnel costs, wages, salaries, and employer contributionscost plans are generated by developing and

comparing multiple cost scenarios, these scenarios might be actual or projected

Exercises: Exercises: (Due date 3/20/2015)(Due date 3/20/2015)

11: Hiring applicant12: Proof hiring13: Maintain qualification profile14: Execute career planning15: Create an event16: Book the even17: Follow up the event18: Execute career planning19: Prepare appraisal20: Perform appraisal21: Transfer of employee

Human Capital Management Part II (Modules & Transactions) EGN 5622 Enterprise Systems Integration...

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