Human Capital Management Part II (Transactions) EGN 5622 Enterprise Systems Integration Spring, 2012 Human Capital Management Part II (Transactions) EGN 5622 Enterprise Systems Integration Spring, 2012

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC2 Goal of HCM Right People for 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

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

Quarles: Flya Kite Introduction4 Transaction Processing in HCM Acquiring and retaining a qualified pool of talent to work in an organization is critical to the success of the organization. Human resources, or employees, are valued for their intellectual capital, flexibility, and ability to develop, adapt, and respond to a rapidly changing environment. Human resources are also one of the most expensive resources in organizations. Hence, hiring, training, paying, and promoting valued employees in a cost effective way is essential. Monitoring HR data transactions in SAP R/3 helps facilitate the process.

Quarles: Flya Kite Introduction5 Transaction Processing in HCM Organizational Management and Job Analysis Recruitment Selection Personnel development Training Travel management Compensation management Benefits

Quarles: Flya Kite Introduction6 Transaction Processing (-continued) Organizational Management and Job Analysis The organizational structure of the company is designed to reflect departments, hierarchies and reporting relationships. Data transactions include the creation of organizational units, jobs, positions, position descriptions, and an organizational chart.

Quarles: Flya Kite Introduction7 Transaction Processing (-continued) Recruitment: The objective of recruitment is to enable the selection and hiring of qualified applicants for a vacant position. Data transactions include ◦creating a vacant position, ◦determining the qualifications required of the position, ◦advertising the position, ◦receiving and screening applications, ◦identifying the most qualified applicants, ◦rejecting unqualified applicants, and ◦storing applicant materials of those not hired but to be considered for future vacancies.

Quarles: Flya Kite Introduction8 Transaction Processing (-continued) Selection: Once qualified applicants have been identified, an offer or contract is extended. Data transactions include ◦Making an offer ◦Assigning a personnel number to the new employee, ◦transferring applicant data to a master database, where infotypes such as planned working time, basic pay, bank details are created. ◦Assuring the EEO compliance through HR data transactions.

Quarles: Flya Kite Introduction9 Transaction Processing (-continued) Personnel Development Employee performance is evaluated or appraised on a periodic basis for developmental reasons (to provide feedback to the employee) as well as for administrative purposes (to determine promotions, merit increases, etc.). Additionally, a profile match up of the position’s requirements and the person’s qualifications can be generated. Additional data transactions include conducting a performance appraisal using 360 degree feedback, and identifying the preferences, potentials, and dislikes of employees for career planning and training and development purposes.

Quarles: Flya Kite Introduction10 Transaction Processing (-continued) 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 ◦selecting the appropriate program based on its contents from a catalog, ◦pre-booking an employee in the training program, and ◦reviewing various reports, including costs, attendance statistics, and attendee training history.

Quarles: Flya Kite Introduction11 Transaction Processing (-continued) Travel Management: Employees typically attend training programs or engage in business off-site. Hence, the travel of employees must be managed. Data transactions include ◦entering employee travel preferences in a database (e.g., airline, hotel, car rental), ◦travel planning (e.g., selecting dates and destinations), posting travel expenses, and ◦generating trip data reports to negotiate special conditions with travel service providers.

Quarles: Flya Kite Introduction12 Transaction Processing (-continued) Compensation Management: Rewarding employees with basic pay, as well as with incentives, is a typical feature of organizational life. Common compensation transactions include ◦entering internal job evaluation results and external salary survey data, ◦generating salary structures, ◦developing pay grades and pay scales, ◦creating budgets, and ◦developing incentive pay.

Quarles: Flya Kite Introduction13 Transaction Processing (-continued) 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 ◦activating benefits infotypes for employees, ◦enrolling employees in various benefit plans (e.g., health, flexible spending accounts, 401(k) plans), and ◦reviewing the costs of various employee benefit choices.

Human Capital Management SAP Implementation Human Capital Management SAP Implementation

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.15 Business Process Integration HCM Org Data Rules Master Data

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC16 Integration of HCM 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, LLC17 Shift in HCM Effects of Globalization and Technology ◦Stereotype shift  Payroll  Personnel Department  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

Process for Recruitment & 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.

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC19 Recruitment – Selection - Hiring Hire Profile Match Vacancy Applicants Advertising Select & Notify

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC20 HCM Process: Recruitment 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, LLC21 Recruitment: Advertising 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

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC22 Recruitment: Applicant Administration 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

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC23 Recruitment: Applicant Administration 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

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC24 Recruitment: Applicant Administration 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, LLC25 HCM Process: Personnel Development 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, LLC26 HCM Process: Personnel Development 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, LLC27 HCM Process: Training & Development Personnel Development Development Plan Appraisals Qualifications/R equirements Career & Succession Planning Training develop based upon generate determine creates

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC28 HCM Process: Training & Development Qualifications/Requirements ◦this component 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

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC29 HCM Process: Training & Development 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, LLC30 HCM Process: Training & Development Career and Succession Planning ◦Career Planning  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  planning functionality that allows you plan for positions in the company that will need to be filled because of turnover (or new position)  enables a company to analyze employees and determine and prepare potential replacements

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC31 HCM Process: Training & Development Development Plans ◦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, LLC32 HCM Process: Training & Development Training ◦enable 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 ◦Encourage continually learning and professional development  SAP offers a powerful resource to assist in scheduling training - TEMs

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.

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC34 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, LLC35 HCM Process: Training & Event Mgmt TEMS Catalog Structure ◦Business Event Groups  Used to classify business event types ◦Business Event Types  Time independent description of a business event ◦Business Events  Actual time based event that is to take place

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC36 HCM Process: Training & Event Mgmt ◦Integration Points TEMS SDMM COFI HCM Personnel Development Personnel Administration Organizational Administration Time Management

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC37 HCM Process: Cost Planning Reporting 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

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

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