Human Capital Management Part II (Transactions) EGN 5622 Enterprise Systems Integration Professional MSEM Fall, 2012

Human Capital Management Part II (Transactions) Concepts & Theories

Shift of HCM views Payroll Personnel Human Resources Version 1.0 Shift of HCM views January 2007 Payroll Personnel Human Resources Human 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Version 1.0 January 2007 HCM Goal: Place right people to the right Job at the right time Functions Determining staffing needs Determining organization structures Recruitment and training Time management Performance issues and performance monitoring Compensation and benefits Proper alignment of corporate and personnel goals January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Importance of HCM The effort of acquiring and retaining a qualified pool of talent to work in an organization is critical to the success of any organization. Human resources (employees) are valued for their intellectual capital, flexibility, and ability to develop, adapt, and respond to a rapidly changing environment. Human resources are one of the most expensive resources in organizations. Thus, it is essential to hire, train, compensate, and promote valued employees in a cost effective way. SAP R/3 helps facilitate the process and monitor data transactions in HR Quarles: Flya Kite Introduction

HCM Functions: Organizational Management and Job Analysis Recruitment Selection Personnel development Training Travel management Compensation management Benefits Quarles: Flya Kite Introduction

HCM Transaction Function: Organizational Management and Job Analysis The organizational structure of the company is designed to reflect departments, hierarchies and reporting relationships. Data transactions include creating organizational units, jobs, positions, position descriptions, and an organizational chart. Quarles: Flya Kite Introduction

HCM Transaction Function: Recruitment: The objective of recruitment is to enable the selection and hiring of qualified applicants for a vacant position. Data transactions include Create a vacant position, Determine the qualifications required of the position, advertising the position, Receive and screening applications, Identify the most qualified applicants, Reject unqualified applicants, and Store applicant materials of those not hired but to be considered for future vacancies. Quarles: Flya Kite Introduction

HCM Transaction Function: Selection: Once qualified applicants have been identified, an offer or contract is extended. Data transactions include 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 Quarles: Flya Kite Introduction

HCM Transaction Function: Personnel Development Appraise employee performance on a periodic basis for employee development and administrative purposes (to determine promotions, merit increases, etc.). Conduct a performance appraisal using 360 degree feedback, 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 Quarles: Flya Kite Introduction

HCM Transaction Function: Training: Performance appraisals help identify qualification deficits. Employees needing to develop a competency can be sent to a training program or workshop. Data transactions include Select the appropriate program based on its contents from a catalog, pre-book an employee in the training program, and Review various reports, including costs, attendance statistics, and attendee training history. Quarles: Flya Kite Introduction

HCM Transaction Function: Travel Management: Employees typically attend training programs or engage in business off-site. Hence, the travel of employees must be managed. Data transactions include Enter employee travel preferences in a database (e.g., airline, hotel, car rental), Plan travel (e.g., selecting dates and destinations), posting travel expenses, and Generate trip data reports to negotiate special conditions with travel service providers. Quarles: Flya Kite Introduction

HCM Transaction Function: 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. Quarles: Flya Kite Introduction

HCM Transaction Function: 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. Quarles: Flya Kite Introduction

Integration of HCM HCM with Production HCM with FI/CO HCM with MM Version 1.0 Integration of HCM January 2007 HCM with Production Shift Planning (Capacity) HCM with FI/CO Payroll Personnel Cost Planning HCM with MM TEMs (Training and Event Management) HCM with SD Salespeople - Commissions January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

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 January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved. © SAP AG and The Rushmore Group, LLC 2008

Recruitment, Selection & Hiring Process Transactions enable the advertising of position vacancies, the identification of recruitment sources, and the hiring of employees. Additionally, qualifications required of vacant positions can be matched with the qualifications of applicants to facilitate decision making in the selection process. This functionality in SAP R/3 relates to recruitment and selection in HCM.

Recruitment – Selection - Hiring Version 1.0 Recruitment – Selection - Hiring January 2007 Applicants Advertising Vacancy Select & Notify Hire Profile Match January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Recruitment Version 1.0 HCM Process: Recruitment January 2007 monitor and meet the personnel requirements within the company determines vacancies within the company maintained by Personnel or Line Managers the system will generate a list of all positions that are marked vacant once a vacancy has been identified advertising can be initiated January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Recruitment: Advertising Version 1.0 Recruitment: Advertising January 2007 Vacancies are published in advertisements internal or external announcement of a position The advertisements are recorded in the system enabling you to gather information about that advertisement cost applications medium recruitment instrument Cost – costs incurred for advertising Applications – how many applications did you receive from that advertisment Medium – Press, Radio, TV Recruitment Instrument – New York Time, Chicago Tribune, Argus Leader January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Recruitment: Applicant Administration Version 1.0 Recruitment: Applicant Administration January 2007 allows a company to coordinate and monitor all the steps involved in the applicant process Applicant Administration is a combination of receiving applications profile match selection of applicants allows a company to coordinate and monitor all the steps involved in the applicant process solicited or unsolicited applicants January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Recruitment: Applicant Administration Version 1.0 Recruitment: Applicant Administration January 2007 Maintaining applications Applicants are the central object of Recruitment it is a person who expresses interest (through job application) in employment or position change within the company 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 Profile Matching Compares skills 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 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Recruitment: Applicant Administration Version 1.0 Recruitment: Applicant Administration January 2007 Selection Applicant Activities aid in Selection process used to enter, log, and plan all the tasks for an applicant during the selection process Activity Types: mail confirmation of receipt, mail invitation to interview, schedule appointment for interview, reject applicant, offer contract depending on the activity and the system output can be generated automatically Activity Status: planned, completed Performance Date: when it was carried out Person Responsible: person responsible for carrying it out Upon completion of qualification review and interviews the position must be filled January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Assignment of Employee to Position during Hiring Action International Aspects of HCM (SAP ECC 6.0)

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 Personnel Development develop Career & Succession Planning Development Plan generate Appraisals based upon determine Qualifications/Requirements Training creates January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Personnel Development Version 1.0 HCM Process: Personnel Development January 2007 Personnel Development component is used to assess and create employee “value” that can be utilized by the company. Purpose is to manage the work efforts and develop the work skills of employees within the company Pertains to performance appraisals, career and succession planning, and career development. Performance appraisals help facilitate decisions regarding promotions, merit pay, and terminations. Transactions in SAP R/3 relate to the typical HCM practices associated with performance management systems. January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Personnel Development Version 1.0 HCM Process: Personnel Development January 2007 A company’s Personnel Development needs are determined by comparing 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 Qualifications/Requirements It is used to define, structure, and manage your qualifications catalog The 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 You use the Qualifications and Requirements component to define, structure, and manage your qualifications catalog. On the basis of this qualifications catalog, the organizational structure (and, if required, other information) you can create profiles. You can then use these profiles to manage, evaluate and compare object characteristics. The profiles can be used to show both the requirements of a position and the qualifications and career goals (preferences) of a person. You can also run profile match-ups to find out how suitable certain persons are for a certain position in your organization, for example. If any qualification deficits arise, you can plan further training measures January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 Appraisal Systems used in Personnel Administration as an instrument to evaluate members of your organization in a planned, formalized and standardized manner TEMs (Training & Event Management) training appraisals attendance appraisals Compensation Management appraisal results can be used to influence remuneration January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 Career and Succession Planning 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 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 Career Planning – ensure employees feel good about themselves and the direction they are going within the company – done by aligning goals of the company and the employee Succession Planning – determining qualified successors for specific posts within the company ensuring our success (having internal replacements) and minimizing cost associated with finding retrain employees January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 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) January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Development Version 1.0 HCM Process: Training & Development January 2007 Training 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 Encourages continual learning and professional development SAP offers a resource to assist in scheduling training - TEMs January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

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. SAP R/3 has the training and development function in HCM.

Training and Event Management Version 1.0 January 2007 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Training & Event Mgmt Version 1.0 HCM Process: Training & Event Mgmt January 2007 Integration Points 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

HCM Process: Cost Planning Reporting Version 1.0 HCM Process: 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 January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC The Rushmore Group, LLC

Exercises: HCM 11: Create an advertisement for salesman (East) HCM 12: Receive application for advertised position HCM 13: Hire an application for salesman (east) position HCM 14: Transfer application info to personnel Admin. HCM 15: Review new employee information HCM 16: Update employee master data HCM 17: Compare qualifications and requirements HCM 18: Send employee to training HCM 19: Update employee profile with new qualification HCM 20: Employee career planning