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

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

3. 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

4. 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

5. 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

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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. Human Capital Management SAP Implementation

17. 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 All rights reserved.
© SAP AG and The Rushmore Group, LLC 2008

18. 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.

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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.

35. 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

36. 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

37. 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

38. 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