Human Capital Management Part II (Modules & Transactions) EGS 5622 Enterprise Systems Integration Spring, 2016 Human Capital Management Part II (Modules & Transactions) EGS 5622 Enterprise Systems Integration Spring, 2016

Human Capital Management Part II (Transactions) Concepts & Theories Human Capital Management Part II (Transactions) Concepts & Theories

Quarles: Flya Kite Introduction 3 Importance of HCM Human 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.

4 Shift of HCM views Payroll (work and pay) Personnel (e.x. incentives) Human Resources (values) Human Capital Management ◦Shift from 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) 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. Payroll 4. Time management 5. Training and event management, 6. Travel management, 7. Manager’s desktop

1. Organizational Management Organizational 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.

2. Personnel Management 2.1 Personnel administration 2.2 Recruitment 2.3 Personnel development 2.4 Benefits 2.5 Compensation management

2.1 Personal Administration Facilitates 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

2.2 Recruitment Objective Objective of recruitment is to enable the selection and hiring of qualified applicants for a vacant position Recruitment process: ◦Create a vacant position, ◦Determine the applicant 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.

10 Recruitment - Hiring Hire Profile Match Vacancy Applicants Advertising Select & Notify

Vacancy Determine position with vacancies. Define requirements required for vacant positions that will match with the qualifications of applicants.

Advertisement 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

13 Applicant Administration 1) Receiving applications  All 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 Matching  Compares skills (qualification) of the applicant to the requirements of the position  can the applicant offer what the company needs  is 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)

14 Applicant Administration Applicant Administration functions: 1)Receiving applications 2)Profile matching 3)Selection of applicants Allows a company to coordinate and monitor all the steps involved in the applicant process

15 Hiring 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. EEO : Equal Employment Opportunity

2.3 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 Benefits Benefits 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 Management Rewarding 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. Payroll Release payroll Start payroll process Check payroll Correction Simulation Follow up Tax Overpayment recovery Bank transfer

20 HCM Process: Payroll Administration Payroll 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

Payroll Accounting

Calculation of Remuneration Elements

4. Time Management 23 Shift planning Administration Time data Time evaluation Work schedule Incentive wages Time sheet

January 2007 (v1.0) 24 Time Management supports 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

January 2007 (v1.0) 25 Time Management There are multiple methods for data collection: Time Terminals Mobile Technology Cross Applications Time Sheet Employee Self Service Time Administrators Time Manager’s Workplace

26 Time Management Time collection will be used for: ◦payroll accounting ◦personnel cost analysis ◦internal cost allocations ◦invoicing ◦performance analysis ◦capacity availability ◦shift planning

Time Management Process

5. 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 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 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 Management SAP Implementation Human Capital Management SAP Implementation

32 Business Process Integration HCM Org Data Rules Master Data

HCM Implementation in SAP 1. Recruitment, Selection & Hiring Process 1.1 Recruitment 1.2 Advertising 1.3 Applicant administration 1.4 Assign hired employee to position 2. Training & Development 2.1 Personnel Development 2.2 Appraisal Systems 2.3 Career and Succession Planning 2.4 Qualifications/Requirements 2.5 Development Plans 2.6 Training & event management 2.7 Cost & Planning Reporting

Assign Hired Employee to Position International Aspects of HCM (SAP ECC 6.0)

35 2. Training & Development Personnel Development Development Plan Appraisals Qualifications/ Requirements Career & Succession Planning Training develop based upon generate determine creates

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

Appraisal Systems Appraisal 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

Career and Succession Planning 1) 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

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

Development Plans ◦Include development measures and information with time requirements for improvement of employee’s qualifications  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)

Training & Event Management It 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

42 Integration Points of TEMS TEMS SDMM COFI HCM Personnel Development Personnel Administration Organizational Administration Time Management TEMS - Training & Event Management System

Cost & Planning Reporting  Used to analyze, monitor, plan a company’s personnel costs, wages, salaries, and employer contributions  cost plans are generated by developing and comparing multiple cost scenarios, these scenarios might be actual or projected

Exercises: (Due date 3/30/2016) 11: Hiring applicant 12: Proof hiring 13. Maintain qualification profile 14.Execute career planning 15. Create an event 16. Book the event 17. Follow up the event 18. Execute career planning 19. Prepare appraisal 20.Perform appraisal 21. Transfer of employee