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

Human Capital Management Part II (Transactions) Concepts & Theories

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. Quarles: Flya Kite Introduction

Shift of HCM views Payroll (work and pay) Personnel (e.x. incentives) Version 1.0 Shift of HCM views January 2007 Payroll (work and pay) Personnel (e.x. incentives) Human Resources (values) Human Capital Management Shift from labor force to quality workers Transform employees into competitive resources The Rushmore Group, LLC

Human Capital Management (HCM) Human Capital Management (HCM) modules enabling managers to perform transactions after organization structure and master data set up. 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 organizational units, jobs, positions, and tasks of the company is designed and created to reflect its hierarchies and reporting relationships. Basis for 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 Infotypes, 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 2.2.1 Objective Objective 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 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.

Recruitment - Hiring Applicants Advertising Vacancy Select & Notify Version 1.0 Recruitment - Hiring January 2007 Applicants Advertising Vacancy Select & Notify Hire Profile Match The Rushmore Group, LLC

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

Applicant Administration Version 1.0 January 2007 Receiving applications All applicants must be maintained in the system 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) Entry of applications in the system can be divided so that more than one person is responsible for it. EX. On receipt of the applications, one employee enters the mandatory data for all applicants. The applications are then distributed among the responsible administrators/personnel officers, who decide which applicants can be rejected immediately. They then enter additional data on applicants who are still of interest to the company. Status determines what information is needed: If the applicant is an external applicant, all the required data must be entered manually. When dealing with internal applicants, however, you can import data such as name and address simply by specifying the candidate's personnel number. You can overwrite this data, if necessary The Rushmore Group, LLC

Applicant Administration Version 1.0 Applicant Administration January 2007 Allows a company to coordinate and monitor all the steps involved in the applicant process Applicant Administration functions: Receiving applications Profile matching Selection of applicants allows a company to coordinate and monitor all the steps involved in the applicant process solicited or unsolicited applicants The Rushmore Group, LLC

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 EEO : Equal Employment Opportunity

2.3 Personal Development Make Performance appraisals, career and succession planning, and career development. Identify the preferences, and potentials 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

HCM Process: Payroll Administration Version 1.0 January 2007 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 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 HOPE the +’s outweigh the –’s Generation of W2 – W4 The Rushmore Group, LLC

Payroll Accounting TERP10 12-46

Calculation of Remuneration Elements TERP10 12-47

4. Time Management Time collection will be used for: Version 1.0 4. Time Management January 2007 Time collection will be used for: payroll accounting personnel cost analysis internal cost allocations invoicing performance analysis capacity availability shift planning Payroll Accounting – Remuneration, Incentive Wages Personnel Cost Analysis Internal Cost Allocation – assign labor costs to the correct cost objects Invoicing – Billing for work performed (consulting) Performance Analysis – absenteeism, tardiness, etc Capacity Availability – work schedule, can he/she be assigned to a task or Work Center Shift Planning – available hours, hours needed The Rushmore Group, LLC

Time Management There are multiple methods for data collection: Version 1.0 January 2007 Time Management There are multiple methods for data collection: CATS ESS Time Terminals Mobile Technology Cross Applications Time Sheet Employee Self Service Time Administrators Time Manager’s Workplace You are not limited to one method of time recording when entering time and labor data. There are different methods of time recording depending on the technical prerequisites, the demands on the data being recorded, and the employee's tasks: Your employees post their working times at external time recording terminal (swipe, punch, piecework). Your employees use the Cross-Application Time Sheet (CATS) to record information on their working times. You can use the recorded data for further business processes in Human Resources, Logistics, and Controlling. Your employees use Web applications or mobile devices to record their working times and receive information about their planned and actual working times. These include applications for the Cross-Application Time Sheet, clock-in and clock-out postings, and for displaying time accounts and work schedules. Your time administrators, such as supervisors and secretaries, use the Time Manager's Workplace to correct and complete decentrally the time data of the employees assigned to them. Your time administrators in the Human Resources department use the Maintain Time Data transaction to check and complete employees’ time data centrally. January 2007 (v1.0) The Rushmore Group, LLC

Time Management Process Zeitwirtschaft Time Management Process Die Zeitwirtschaft beinhaltet sowohl die Zeiterfassung als auch die Zeitbewertung mit der entsprechenden Generierung der Zeitlohnarten Seite 6-1 Stamm- und Zeitdaten

5. Training and Event Management It involves 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

Business Process Integration ECC 6.0 Business Process Integration January 2008 HCM Transactions Master Data Org Data Rules HCM HCM HCM © SAP AG and The Rushmore Group, LLC 2008

HCM Implementation in SAP Recruitment, Selection & Hiring Process Recruitment Advertising Applicant administration Assign hired employee to position Training & Development Personnel Development Appraisal Systems Career and Succession Planning Qualifications/Requirements Development Plans Training & event management Cost & Planning Reporting

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

Training & Development Version 1.0 Training & Development January 2007 Personnel Development develop Career & Succession Planning Development Plan generate Appraisals based upon determine Qualifications/ Requirements Training creates The Rushmore Group, LLC

Integration Points of TEMS Version 1.0 Integration Points of TEMS January 2007 TEMS SD MM CO FI HCM Personnel Development Personnel Administration Organizational Time Management Integration Points within HCM MM (requisitions for supplies – Markers, Paper, Manuals) (reservations – Rooms, Projectors) SD (tracking external attendees – contact information, etc) FI/CO (billing external attendees) (cross billing for internal attendees) HCM Personnel Administration – use of Employee data (attendees – instructors) Organizational Admin – approval procedures Personnel Development – qualifications check for entry to class – update skills upon completion Time Management – recording and checking of attendance to the class TEMS - Training & Event Management System The Rushmore Group, LLC

2.7 Cost & Planning Reporting Version 1.0 2.7 Cost & Planning Reporting January 2007 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 The Rushmore Group, LLC

Exercises: (Due date 10/15/2016) 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