1. Human Capital Management Part I (Function, Structure, and Master Data) EGN Enterprise Systems Integration (MSEM, Professional) Fall, 2013

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

3. Human Resources Management
Manage requirements for human resources to support company current needs and future growth, including:
Planning,
Hiring/assigning,
Training, and
Evaluating employees

4. Human Resources Management
Typical HR Functions:
Planning and job analysis,
Recruitment and selection,
Training and development,
Performance management,
Compensation and benefits, and
Employee and labor relations.

5. HCM Process in the Employee Lifecycle
12-28

6. Leveraging HCM for Organizational Performance Improvement

7. Human Capital Management SAP Implementation

8. R/3 SAP Module View Integrated Solution Client / Server Open Systems
Financial
Accounting
Sales &
Distribution
Materials
Mgmt.
Controlling
Production
Planning
R/3
Fixed Assets
Mgmt.
Integrated Solution
Human
Resources
Project
System
Client / Server
Quality
Maintenance
Open Systems
Workflow
Plant
Management
Industry
Solutions

9. Human Capital Management
Human Capital Management (HCM) modules in SAP R/3 incorporates HCM concepts and practices, enabling managers to perform transactions pertaining to the HRM cycle of events.
HR modules in SAP R/3:
Organizational management
Personnel management,
Payroll
Time management
Training and event management,
Travel management,
Manager’s desktop
Environment, health and safety

10. Organizational Management
It provides the basis for structuring personnel planning and development processes, and is necessary for personnel administration.
Using this application, an organizational structure, including departments, jobs, positions, and tasks, can be created.
Work is further defined and described through the process of job analysis: the cornerstone of HRM.

11. Organization Management
Organizational Plan
Expert mode
Info system
Tool
Setting

12. Personnel Management Personnel administration Recruitment
Personnel development
Benefits
Compensation management
Personnel cost planning
Management of global employees

13. Personal Administration
Facilitates the management of HR master data, personnel files, and relational data bases.
Maintaining accurate and confidential employee records is critical to this function.

14. Personnel Administration
HR master data
Personnel actions
Personnel files
Info system
Report
Employee
Organizational entity (Headcount changes, headcount development, salary accounting to seniority, assignment to wage level)
Age/gender
Setting
Define organizational unit
Define positions
Define jobs

15. Recruitment and Selection
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.

16. Personal Development
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.

17. Benefits
Benefits pertains to flexible spending accounts, 401(k) plans, health care accounts, as well as mechanisms to track costs of benefits.
SAP R/3 extend far beyond the typical benefits required by law.

18. Compensation Management
It is essential in promoting internal equity and external competitiveness.
Features of this application include job pricing, reviewing salary surveys, and creating policies and budgets.

19. HCM Process: Compensation & Benefits
Version 1.0
HCM Process: Compensation & Benefits
January 2007
Compensation is not the cut-and-dry subject it once was
Past – consisted of an employee's base salary or, at most, a base salary and commission.
Today - looked at as compensation packages; including:
salaries, stock options
employee stock ownership plans
pay-for-performance plans
bonuses, profit sharing
commissions, non-cash rewards
variable pay, and much more.
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: Compensation Management
Version 1.0
January 2007
HCM Process: Compensation Management
The balancing of company interests to operate within the company's fiscal budget and fairly paying employees
key component of attracting, developing, retaining, and rewarding high quality staff through wages and salaries which are competitive in the labor markets
Compensation Management is comprised of the following components:
Job Pricing
Budgeting
Compensation Administration
Long-term Incentives
Job Pricing
generates salary structures based on internal and external information and provides reporting capabilities
will perform the following functions
generate and maintain salary structures
define pay grades and levels
external job evaluations systems and salary surveys
evaluation and comparison of jobs and related jobs
Budgeting
used to allocated funds to organizational units within the organization
can create several budgets
roll-up feature
bottom up – submit the budget
top down – approve the budget
The Compensation Administration component provides you with the necessary tools for strategic remuneration planning that reflects both your corporate culture and your salary policies. User-defined calculation rules and eligibility criteria mean that you can create compensation adjustments that meet your individual requirements and comply with your compensation policy.
January 2007 (v1.0)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

21. HCM Process: Benefits Administration
Version 1.0
HCM Process: Benefits Administration
January 2007
benefits today are offered as a part of an employees overall compensation package
this component allows a company great flexibility in creating and maintaining individual packages for your employees
Six international Plan Categories
Allows for detailed company reporting
Benefit Plan Participation
Health Plan Costs
Employee Demographics
Benefits Election Analysis
Country Specific Settings available
FSA, COBRA (US examples)
HIPPA Certificates
US Specific:
FSA – Flexible Spending Accounts - enable employees to set aside pre-tax income to cover anticipated medical or dependent care expenses
COBRA – Consolidated Omnibus Budget Reconciliation Act of 1985 – requires the vast majority of employers to offer continuation of coverage to covered employees and their dependents who, due to certain qualifying events, lose group health plan under the same terms and conditions as effective immediately prior to the event.
HIPPA - Health Insurance Portability and Accountability Act - The HIPAA Certificate Report enables you to generate the "Certificate of Creditable Coverage" for employees and their dependents who are entitled to this document under the Health Insurance Portability and Accountability Act of 1996
January 2007 (v1.0)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

22. Payroll Release payroll Start payroll process Check payroll Correction
Simulation
Follow up
Tax
Overpayment recovery
Bank transfer

23. HCM Process: Payroll Administration
Version 1.0
January 2007
HCM Process: Payroll Administration
SAP contains an international payroll driver that is modified for each country
payroll is released for individual payroll areas
the run is for a specific group of employees and a specific period of time
upon release all affected personnel records are locked
will generate an payroll results, and earning statement, bank transfers and check payments
Many internal integration points
Often integrates with an outside or 3rd party system
January 2007 (v1.0)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

24. 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
January 2007 (v1.0)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

25. Overview of the Payroll Process
TERP

26. Payroll Accounting
TERP

27. Calculation of Remuneration Elements
TERP

28. Time Management Shift planning Administration Time data
Time evaluation
Work schedule
Incentive wages
Time sheet

29. HCM Process: Time Management
Version 1.0
January 2007
HCM Process: 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)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

30. HCM Process: Time Management
Version 1.0
January 2007
HCM Process: 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)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

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

32. 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

33. 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.
This functionality in SAP R/3 relates to training and development in HCM.

34. 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

35. Manager’s Desktop
It is a tool which enables managers to access employee information at a manager’s fingertips, i.e., managers do not have to access menu paths or transaction codes to retrieve employee information. Rather, 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

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

37. 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

38. 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
The definition of organization units is a fundamental step, it is a critical factor in how the company will be structured
The Rushmore Group, LLC

39. Structures of HCM Enterprise structure Personnel structure
Organization structure

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

41. Version 1.0
Enterprise Structure
January 2007
This structure makes up the legal identity of the company
Every employee in an organization is included in the structure of his or her enterprise. The Enterprise Structure sub-divides organizations and employees 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

42. Enterprise Structure (-continued)
Client is the major organization criterion in the system, and is a self-contained unit.
Client has technical structure feature
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.

43. Enterprise Structure (-continued)
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.

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

45. Enterprise Structure (-continued)
Personnel sub-area represents the “location and public holiday calendar” view.
It is subdivision of a personnel area (such as a department), and identifies groupings of employees assigned to a particular personnel area or company code.
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.
sub-area must be unique to a company code

46. Enterprise Structure
12-7

47. Enterprise Structure
12-9

48. 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

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

50. Personnel Structure (-continued)
Employee group is the highest level, and defines the relationship between an employee and a company in terms of work, i.e., active employees, pensioners, and early retirees.
These groups can be differentiated further. For example, an active employee may also be a trainee, an hourly wage earner, a salaried employee, etc.
The principal functions of the employee group include generating default values for payroll accounting area and basic pay, serving as a selection criterion for reporting, and serving as a unit in authorization checking.

51. Personnel Structure (-continued)
Employee sub-group enables distinguishing among employees specifically 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.
Functions include allowing different payroll procedures for different employee subgroups, controlling the validity of wage types on an employee sub-group level, and defining the validity of work schedules, attendance and absence quotas.

52. Personnel Structure

53. Personnel Structure: Elements
Version 1.0
Personnel Structure: Elements
January 2007
Payroll Area
It groups employees together that are paid the same (time)
Weekly, Bi-Weekly, Monthly
The 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

54. Organization Structure in HCM
The organizational structure and plan is the comprehensive model of the structural and personnel environment in the enterprise, with hierarchies and reporting relationships clearly defined.
Hierarchies and reporting relationships are determined once object types are created.
Typical object types include
organizational units,
jobs,
positions,
tasks, and
persons.

55. Organizational 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.

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

57. Organization Structure (-continued)
Organizational units reflect the various business units or departments in the enterprise.
Several organizational units can be created, and they must be related to one another in an organizational plan. They can be defined as functional, divisional, or geographical departments, or as project groups.
An example of a functional structure would include accounting, sales, human resources, and manufacturing departments.

58. Organization Structure (-continued)
Jobs reflect the tasks, duties and responsibilities of the work being performed in the organization.
Typically, they are grouped in terms of the similarity of tasks being performed, and are more generic in nature. Some examples include analyst, specialist, manager, and supervisor.

59. Organization Structure (-continued)
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 are occupied by persons.
Examples of positions include Accounting Analyst, Logistics Specialist, Compensation and Benefits Manager, and Production Supervisor.

60. Organization Structure (-continued)
Persons are assigned to positions in the organizational structure, and generally represent the employees in the company.
For example, Ross Quarles may be the Accounting Analyst, Fawzi Noman may be the Logistics Specialist, Kathy Utecht may be the Compensation & Benefits Manager, and High Asa Kite may be the Production Supervisor.

61. Organization Structure (-continued)
Tasks are the individual duties and responsibilities undertaken by employees in their positions, as reflected in their job descriptions.
Examples of tasks include “prepares accounting reports,” “maintains warehouse inventory,” “reviews salary surveys,” and “oversees production scheduling.”

62. Organizational Structure
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.

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

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

65. 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

66. HCM: Master Data Master Data
A vast amount of HR data can be maintained in SAP R/3. Personnel data provide the basis for various HR transaction processing and reporting. Hence, its accuracy, timeliness, relevance, and completeness are crucial.
While most data may be housed in an HR department’s information system, it is important that data that pertaining to an overall HR information system be included.
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.

67. 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).

68. HCM: Master Data (-continued)
Processing of infotypes may include 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).
There are over 600 HR infotypes used to maintain employee and applicant data, and the number, types, and settings of infotypes can be customized to fit the business requirements of the company

69. 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).
Several records of information on an employee can be reviewed, such as organizational assignment, basic pay, addresses, travel preferences, planned working time, etc.

70. HCM: Master Data (-continued)
Information can also be retrieved in a relational database format by accessing specific infotypes.
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 until basic pay is reached. Rather, the basic pay infotype (i.e., 0008) can be accessed directly so that only that information is retrieved.

71. 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

72. 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

73. Employee Data: Infosubtypes
Version 1.0
Employee Data: Infosubtypes
January 2007
Certain data that is entered in an infotype can trigger the need for a infosubtype
ex. Family Member/Dependents
If you enter that you are married or have children it will generate the need for a spouse/child infosubtype to capture the information about the spouse or child(ren)
Subtypes also allow you to account for time constraints
Different addresses may be current at the same time
Permanent Residence
Temporary Residence
Home address
The Rushmore Group, LLC

74. 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
Hiring, Firing, Reassignment, Retiring – would all be examples of procedures that could be represented by a Personnel action
Personnel Actions enable users to enter information about an employee without having to access each individual infotype
The Rushmore Group, LLC

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

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

77. 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

78. SAP GBI Client, Userid, Password
SAP Exercises HW7 & HW8:
Description: SAP BASEL Fall 2013
Application server: basel.cob.csuchico.edu
Instance number: 26
System ID: BAS
Client: 270
Userid: gbi-012 to gbi-050
Initial password: SAP4US

79. Exercises: (due date 10/5/2013)
HCM 1: Display Organization Plan.
HCM 2: Display personnel master record
HCM 3: Create positions
HCM 4: Create Career
HCM 5: Define requirement
HCM 6: Hire employee
HCM 7: Display organizational plan
HCM 8: Post job advertisement
HCM 9: Enter applicant master data
HCM 10: Prepare hiring