egn_5622 hcm part 1 fall 2013 lab 7

Human Capital Human Capital ManagementManagement

Part IPart I(Function, Structure, and Master Data)(Function, Structure, and Master Data)

EGN 5622 Enterprise Systems Integration EGN 5622 Enterprise Systems Integration

(MSEM, Professional)(MSEM, Professional)Fall, 2013Fall, 2013

Human Capital ManagementHuman Capital Management

Part I Part I (Function, Structure, and Master Data) (Function, Structure, and Master Data)

Concepts & TheoriesConcepts & Theories

Human Resources ManagementHuman Resources ManagementManage requirements for human

resources to support company current needs and future growth, including:◦Planning,◦Hiring/assigning,◦Training, and◦Evaluating employees

Human Resources ManagementHuman Resources ManagementTypical 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 LifecycleHCM Process in the Employee Lifecycle

Leveraging HCM for Organizational Leveraging HCM for Organizational Performance ImprovementPerformance Improvement

Human Capital ManagementHuman Capital Management

SAP Implementation SAP Implementation

R/3

SAP Module ViewSAP Module View

Integrated SolutionClient / Server

Open Systems

FinancialAccounting

Controlling

Fixed AssetsMgmt.

ProjectSystem

Workflow

IndustrySolutions

ProductionPlanning

Sales &Distribution

MaterialsMgmt.

PlantManagement

QualityMaintenance

Human Resources

Human Capital ManagementHuman Capital ManagementHuman 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,

PayrollTime managementTraining and event management, Travel management,Manager’s desktopEnvironment, health and safety

Organizational ManagementOrganizational 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.

Organization ManagementOrganization ManagementOrganizational Plan Expert modeInfo systemToolSetting

Personnel ManagementPersonnel ManagementPersonnel administrationRecruitmentPersonnel developmentBenefitsCompensation managementPersonnel cost planningManagement of global employees

Personal AdministrationPersonal 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.

Personnel AdministrationPersonnel AdministrationHR 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/genderSetting

◦ Define organizational unit◦ Define positions◦ Define jobs

Recruitment and SelectionRecruitment and SelectionTransactions 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.

Personal DevelopmentPersonal 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.

BenefitsBenefits

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.

Compensation ManagementCompensation 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.

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HCM Process: Compensation & BenefitsHCM Process: Compensation & BenefitsCompensation 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.



HCM Process: HCM Process: Compensation Compensation ManagementManagementThe 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



HCM Process: Benefits AdministrationHCM Process: Benefits Administration 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

PayrollPayrollRelease payrollStart payroll processCheck payrollCorrectionSimulationFollow upTaxOverpayment recoveryBank transfer



HCM Process: Payroll HCM Process: Payroll AdministrationAdministration

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

lockedwill generate an payroll results, and earning

statement, bank transfers and check payments



HCM Process: Payroll HCM Process: Payroll AdministrationAdministrationPayroll 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

Overview of the Payroll ProcessOverview of the Payroll Process

Payroll AccountingPayroll Accounting

Calculation of Remuneration ElementsCalculation of Remuneration Elements

Time ManagementTime Management

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Shift planningAdministration

Time dataTime evaluationWork schedule

Incentive wagesTime sheet

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HCM Process: Time HCM Process: Time ManagementManagement

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

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HCM Process: Time HCM Process: Time ManagementManagementThere are multiple methods for data collection:

Time TerminalsTime Terminals

Mobile TechnologyMobile Technology

Cross Applications Time SheetCross Applications Time SheetEmployee Self ServiceEmployee Self Service

Time Time AdministratorsAdministratorsTime Manager’s Time Manager’s

WorkplaceWorkplace



HCM Process: Time ManagementHCM Process: Time ManagementTime collection will be used for:

◦payroll accounting◦personnel cost analysis◦internal cost allocations◦invoicing◦performance analysis◦capacity availability◦shift planning

Time Management ProcessTime Management Process

Training and Event ManagementTraining 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.

Travel ManagementTravel 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

Manager’s DesktopManager’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

Business Process IntegrationBusiness Process Integration

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MM

PP

SD

Org

Dat

a

Rules

MM

PP

SD

Master D

ata

MM

PP

SD

FI HCMMM

FIFI

FI

PPSD

HCM

HCM

HCM

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Business Process IntegrationBusiness Process Integration

HCM

HCM

HCM

HCM

Org

Dat

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Rules

Master D

ata

Organizational Data in HCMOrganizational Data in HCMA 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

Structures of HCMStructures of HCM

Enterprise structurePersonnel structureOrganization structure

Structures of HCMStructures of HCM

Enterprise Structure

Personnel Structure

Organizational Structure

Enterprise StructureEnterprise StructureThis structure makes up the legal identity of the

companyEvery 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

Enterprise Structure (-continued)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.


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.


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.

Enterprise Structure (-continued)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

Enterprise StructureEnterprise Structure

Enterprise Structure: Global Enterprise Structure: Global Bike GroupBike Group Global Bike Group

Global Bike US Global Bike Germany

Marketing & Sales OperationsAministration & Financials

Administration Financials

Security

Personnel StructurePersonnel StructureThis 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

Personnel Structure (-continued)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.

Personnel Structure (-continued)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.

Personnel StructurePersonnel Structure

Personnel Structure: ElementsPersonnel Structure: ElementsPayroll 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

Organization Structure in HCMOrganization Structure in HCMThe 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.

Organizational StructureOrganizational 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.

Organizational Structure: Pen IncOrganizational Structure: Pen Inc


Organizational Units

Person

Position

Organization Structure (-continued)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.

Organization Structure (-continued)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.


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.


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.


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.”

Organizational StructureOrganizational Structure

Integration of Org. Mgt. with Personnel Integration of Org. Mgt. with Personnel Admin.Admin.

Integration of Org. Management with Integration of Org. Management with Personnel Admin. Personnel Admin.

HCM: Master DataHCM: Master DataMaster 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

HCM: Master Data Master Data 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.

HCM: Master Data (-continued)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)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

HCM: Master Data (-continued)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.

HCM: Master Data (-continued)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.

HCM: Master Data - Employee HCM: Master Data - Employee DataDataInformation 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

Employee Data: InfotypesEmployee Data: InfotypesNumerous infotypes will be created for each employee

◦ Organizational Assignment must be the first infotype recorded

Employee Data: InfosubtypesEmployee Data: InfosubtypesCertain 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

Employee Data: Personnel ActionsEmployee Data: Personnel ActionsPersonnel 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

Personnel FilePersonnel File• Information maintained about an employee is stored in their

Personnel File

HCM: Employee LifecycleHCM: Employee Lifecycle


Birth

Work Taxes

Death (Retire)

HCM: Process/FunctionsHCM: Process/Functions

Recruitment

Cost PlanningReporting

Training and Development

Manage WorkTime (CATS)

PayrollAdministration

Hire Employee

ESSEmployeeSelf-Service

Compensation& Benefits

SAP GBI Client, Userid, Password SAP GBI Client, Userid, Password SAP Exercises HW7 & HW8:Description: SAP BASEL Fall 2013Application server: basel.cob.csuchico.eduInstance number: 26System ID: BAS

Client: 270Userid: gbi-012 to gbi-050Initial password: SAP4US

Exercises: Exercises: (due date 10/5/2013)(due date 10/5/2013)HCM 1: Display Organization Plan.HCM 2: Display personnel master recordHCM 3: Create positionsHCM 4: Create CareerHCM 5: Define requirementHCM 6: Hire employeeHCM 7: Display organizational planHCM 8: Post job advertisementHCM 9: Enter applicant master dataHCM 10: Prepare hiring

egn_5622 hcm part 1 fall 2013 lab 7

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