Human Capital Management Part I (Function, Structure, and Master Data) EGN 5622 Enterprise Systems Integration Fall, 2015

Human Capital Management Part I (Function, Structure, and Master Data) Concepts & Theories

Human Resources Management Manage requirements for human resources to support company current needs and future growth. Typical HR Functions: Planning and job analysis, Recruitment and selection, Training and development, Performance management, Compensation and benefits, and Employee and labor relations.

HCM Process in the Employee Lifecycle 12-28

Leveraging HCM for Organizational Performance Improvement

Human Capital Management SAP Implementation

SAP Module View Integrated Solution Client / Server Open Systems Financial Accounting Sales & Distribution Materials Mgmt. Controlling Production Planning Fixed Assets Mgmt. Integrated Solution Human Resources Project System Client / Server Quality Maintenance Open Systems Workflow Plant Management Industry Solutions

Business Process Integration ECC 6.0 January 2008 Business Process Integration FI MM HCM PP SD Transactions Master Data MM PP SD Org Data Rules MM PP SD FI FI FI In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup. The legs are typically configured during the implementation process. During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution. MM PP SD HCM HCM January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. HCM © SAP AG and The Rushmore Group, LLC 2008

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

Organizational Data in HCM Version 1.0 Organizational Data in HCM January 2007 A hierarchy in which the organizational units in an enterprise are arranged according to task and functions. Are static data and are rarely changed Definition of organization units is a fundamental step, it is a critical factor in how the company will be structured The Rushmore Group, LLC

Structures of HCM Enterprise structure 2. Personnel structure 3. Organization Plan

Structures of HCM Enterprise Structure Personnel Structure Version 1.0 January 2007 Structures of HCM Enterprise Structure Personnel Structure Organizational Plan The Rushmore Group, LLC

Version 1.0 1. Enterprise Structure January 2007 It makes up the legal identity of the company. Every employee in an organization is included in the enterprise structure. It usually is sub-divided, according to factors relevant to time management and payroll. The Enterprise Structure is made up of the following elements: Client Company Code Personnel Area Personnel Sub-area The Rushmore Group, LLC

Enterprise Structure (Client) Client is the major organization unit in the system, and it is a self-contained unit. Personnel data entered in a client can only be accessed in that client. Data cannot be exchanged among clients. If employees change clients, data have to be re-created in that new client.

Enterprise Structure (Company Code) Company code is an independent accounting unit, and is also self-contained. A set of accounts can be developed in the company code, and financial statements such as balance sheets and profit-and-loss statements are created at this level.

Enterprise Structure (Personnel area) Personnel area is a sub-unit of the company code, usually based on location or division. It is unique within a client, and is used primarily for personnel administration. It serves as a selection criterion for reporting, constitutes a unit for authorization check, and allows the user to generate default values for data entry, e.g., for the payroll accounting area. It represents the “company and country version for payroll” view.

Enterprise Structure (personnel sub-area) Personnel sub-area is a subdivision of a personnel area (such as a department). It is used to identify groupings of employees assigned to a particular personnel area or company code. It is usually used to represent the “location and public holiday calendar” view. It is the level at which the primary organizational aspects of human resources are controlled. Its functions include specifying a country grouping, setting groupings for time management so that work schedules can be set up for individual personnel sub-areas, generating a default pay scale type and area for basic pay. Each personnel sub-area must be unique to a company code

Enterprise Structure 12-7

Enterprise Structure 12-9

Enterprise Structure: Global Bike Group Version 1.0 January 2007 Enterprise Structure: Global Bike Group Global Bike Group Global Bike US Global Bike Germany Marketing & Sales Operations Aministration & Financials Administration Financials Security The Rushmore Group, LLC

Enterprise Structure: Global Bike Group Version 1.0 January 2007 Enterprise Structure: Global Bike Group The Rushmore Group, LLC

Version 1.0 2. Personnel Structure January 2007 Personal Structure is used to sub-divide organizations and employees according to factors relevant to time management and payroll. Personnel Structure is made up of the following elements: Employee Group Employee Subgroup Payroll Area The Rushmore Group, LLC

Personnel Structure (Employee Group) Employee group is the highest level, and defines the relationship between an employee and a company in terms of work For example, employees can be grouped into active employees, pensioners, and early retirees. Employee grouping is used to generate default values for payroll accounting area and basic pay;

Personnel Structure (Employee sub-group) Employee sub-group is used to further classify employees with regard to their status. For example, active employees may be classified as a trainee, hourly wage earner, non pay-scale employee, salaried employee, etc. Employee subgrouping allows applying a different payroll procedure to each different employee subgroup, controlling the validity of wage types at the employee sub-group level, and defining the validity of work schedules, attendance and absence quotas.

Personnel Structure (Employee Group vs. Sub-group)

Personnel Structure (Payroll Area) Version 1.0 Personnel Structure (Payroll Area) January 2007 Payroll Area It groups employees together that are paid at the same time E.g., Weekly, Bi-Weekly, Monthly Payroll area is determined from a combination of the Employee Group and Employee Subgroup number of employees in the payroll run specific dates of the payroll run The Rushmore Group, LLC

Enterprise Structure: Global Bike Group Version 1.0 January 2007 Enterprise Structure: Global Bike Group The Rushmore Group, LLC

3. Organizational Plan in HCM Organizational structure and plan are the comprehensive model of the structural and personnel environment in the enterprise. Hierarchies and reporting relationships are determined. Typical object types in Organizational structure and plan include organizational units, jobs, positions, tasks, and persons.

Organizational Plan (Structure) Using organization and planning, you can get a clear picture of your organization at any point in time: past, present or future. With this information, you can be proactive in planning for future human resource needs. A company’s organizational structure is represented on the left as it may exist “today”. Using the Organization and Planning module, any type of reorganization can be planned, from changing position titles to restructuring entire divisions or departments. The system offers a graphics-based environment to accomplish this task, with which you can visually move, add, and change objects quickly and easily.

Organizational Plan: Pen Inc Version 1.0 January 2007 Organizational Plan: Pen Inc Organizational Units Person Position January 2007 (v1.0) The Rushmore Group, LLC

Organizational Plan (Org. Units) Organizational units reflect the various business units or departments in the enterprise. An example of a functional structure would include accounting, sales, human resources, and manufacturing departments.

Organizational Plan (Jobs) Jobs reflect the tasks, duties and responsibilities of the work being performed in the organization. Typically, they are grouped in terms of similarity of tasks being performed. For example, analyst, specialist, manager, and supervisor.

Organization Structure (Positions) Positions are more specific than jobs, and all of the information stored in a job is inherited by all of the positions created from the job. Positions reflect individual employee assignments, and can be occupied by persons. Position examples: Accounting Analyst, Logistics Specialist, Compensation and Benefits Manager, and Production Supervisor.

Organizational Plan (Persons) Persons are assigned to positions in the organizational structure, and generally represent the employees in the company. E.G., Ross Quarles is a person assigned to the position of Accounting Analyst; Fawzi Norman is a person assigned to the position of Logistics Specialist; Kathy Utecht is the Compensation & Benefits Manager; and Asa Kite is the Production Supervisor.

Organizational Plan (Tasks) Tasks are specific duties and responsibilities undertaken by an employee in his/her position, as reflected in their job descriptions. Tasks Example: prepare accounting reports, maintain warehouse inventory, review salary surveys, and oversee production scheduling.

Organizational Plan The Organization and Planning module is the foundation for the Personnel Planning and Development Area. Objects are linked to each other by relationships. Linking organizational units results in the production of organizational charts. Positions occupied by individuals belong to an organizational unit. Within HR Planning the term “job” is used as a classification. Every position is described by a job.

Integration of Org. Mgt. with Personnel Admin. 5-11

Integration of Org. Management with Personnel Admin. 12-18

Enterprise Structure: Global Bike Group Version 1.0 January 2007 Enterprise Structure: Global Bike Group The Rushmore Group, LLC

HCM: Master Data Master data is relatively fixed Version 1.0 HCM: Master Data January 2007 Master data is relatively fixed Record that contains all the necessary information to conduct business transactions Information within a master record can and will change, our hope is that it does not change frequently. Before making the master data configurations, you must have completely defined the organizational structures The Rushmore Group, LLC

HCM: Master Data A vast amount of HR data can be maintained in SAP ERP. Personnel data provide the basis for various HR transaction processing and reporting. Hence, its accuracy, timeliness, relevance, and completeness are crucial. Typically, the data pertains to employee information which is entered into the system using infotypes (types of information) and HR Master Database which stores Infotypes.

HCM: Master Data (-continued) Infotypes categorize information and enable data input, i.e., they are data entry screens which allow the entering of various types of information into data fields. Similar types of information can be grouped by content to facilitate data entry. Infotypes can be processed individually or through the fast entry mode (entering specific data for several employees at once).

HCM: Master Data (-continued) Infotypes - similar to view for materials, but more complicate: creating (creating a new record with beginning and end dates), changing (changing or correcting a record), copying (using the initial record as a template), delimiting (upon entering a delimitation date, records valid for that date are selected, and then setting the end date for that record to the day before the delimitation date), and displaying (viewing but not changing records). Over 600 HR infotypes are available to maintain employee and applicant data, User can customize the number, types, and settings of infotypes to fit the business requirements of the company

HCM: Master Data (-continued) HR Master Database is where HR data are stored. Typically, employee information is stored in a personnel file which can be accessed by entering the employee’s assigned personnel number (usually generated internally by the system). Information can be retrieved in a relational database format by accessing specific infotypes. Several records of information on an employee can be reviewed, such as organizational assignment, basic pay, addresses, travel preferences, planned working time, etc.

HCM: Master Data (-continued) For example, if a manager wants to review the basic pay of an employee, the manager does not have to access the personnel file and review all of the records in order to reach basic pay. Rather, the basic pay infotype (i.e., 0008) can be accessed directly to retrieve the specific information.

HCM: Master Data - Employee Data Version 1.0 HCM: Master Data - Employee Data January 2007 Information must be recorded and maintained effectively for every employee Infotypes (Information Types) are units of information that aid in the entry of master data and group like information together Status of the Employee will determine what information should be gathered Active vs. Intern Exempt vs. Non-exempt The Rushmore Group, LLC

Employee Data: Infotypes Version 1.0 January 2007 Employee Data: Infotypes Numerous infotypes will be created for each employee Organizational Assignment must be the first infotype recorded The Rushmore Group, LLC

Employee Data: Personnel Actions Version 1.0 Employee Data: Personnel Actions January 2007 Personnel actions are a series of predefined infotypes that are grouped together to speed the data entry process Examples: Hiring, Firing, Reassignment, Retiring All above examples are a procedure that could be represented by a Personnel action Personnel Actions enable the user to enter information about an employee without having to access each individual infotype The Rushmore Group, LLC

Version 1.0 Personnel File January 2007 Information maintained about an employee is stored in their Personnel File The Rushmore Group, LLC

HCM: Employee Lifecycle Version 1.0 January 2007 HCM: Employee Lifecycle Birth Death (Retire) Work Taxes January 2007 (v1.0) The Rushmore Group, LLC

HCM: Process/Functions Version 1.0 HCM: Process/Functions January 2007 Recruitment Cost Planning Reporting Training and Development Manage Work Time (CATS) Payroll Administration Hire Employee ESS Employee Self-Service Compensation & Benefits CATS : Cross-Application Time Sheet The Rushmore Group, LLC

Exercises: (due date 10/10/2015) 1: Display Organization Plan. 2: Display personnel master record 3: Create positions 4: Create Career 5: Define requirement 6: Hire employee 7: Display organizational plan