Human Capital Management Part II (Modules & Transactions) EGS 5622 Enterprise Systems Integration Spring, 2017

Human Capital Management Part II (Transactions) Concepts & Theories

Which of the following accounts appears in the Balance Sheet? a. Inventory account b. Vendor account c. Customer account d. Sales discount

2. Which of the following accounts appears in the Profit and Loss report? a. Customer account b. Vendor account c. Sales revenue d. Common stock

3. Which of the following is NOT an element of the enterprise structure in SAP’s HCM? Company code b. Controlling area c. Client d. Personnel area e. Personnel sub-area

4. Which of the following is NOT an element of the personnel structure in SAP’s HCM? Employee group b. Employee subgroup c. Payroll area d. Business area

5. Which of the following is NOT an element of the organizational structure in SAP’s HCM? Organizational unit b. Positions c. Profit center d. Persons e. Jobs

6. You have a distribute cycle shown below in your control area. Please choose the correct distributed dollar amount for the receiving cost center D005 after you run the distribution center. D005: 1) 400, 2) 420, 3) 450, 4) 480 5) 500 6) 520 7) none

Importance of HCM Human resources are one of the most expensive resources in organizations. Goal: Hire and assign right people to the right position 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 get rid of the fishing nets and bring in the lines Transform employees into competitive resources The Rushmore Group, LLC

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 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 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) 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, 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

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 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 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 Shift planning Administration Time data Time evaluation Work schedule Incentive wages Time sheet

Version 1.0 January 2007 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 The Personnel Time Management component offers you support in performing all human resources processes involving the planning, recording, and valuation of internal and external employees’ work performed and absence times. It provides other SAP applications with planning data and delivers information to business processes such as: Determining personnel costs Creating invoices Confirmations Service entry of external employees January 2007 (v1.0) 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 Time collection will be used for: payroll accounting Version 1.0 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 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 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

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

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

2. Training & Development Version 1.0 2. 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

2.1 Personnel Development Version 1.0 2.1 Personnel Development January 2007 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 The Rushmore Group, LLC

2.2 Appraisal Systems Appraisal system used in Version 1.0 January 2007 2.2 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 The Rushmore Group, LLC

2.3 Career and Succession Planning Version 1.0 2.3 Career and Succession Planning January 2007 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 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 The Rushmore Group, LLC

2.4 Qualifications/Requirements Version 1.0 2.4 Qualifications/Requirements January 2007 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 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 The Rushmore Group, LLC

Version 1.0 2.5 Development Plans January 2007 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) The Rushmore Group, LLC

2.6 Training & Event Management Version 1.0 January 2007 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 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 3/29/2017) 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