Human Capital Management

(HCM)

BPI - Overview

Goal of HCM
Right People for Right Job at the Right Time Functions
determining staffing needs recruitment and training time management performance issues and performance monitoring compensation and benefits proper alignment of corporate and personnel goals

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

Modules within HCM

Personnel Management
HR Master Data, Personnel Administration, Info. Systems, Recruitment, Benefits & Salary Administration,

Organizational Management
Organizational Structure, Staffing Schedules, Job Descriptions, Planning Scenarios, Personnel Cost Planning

Payroll Accounting
Payroll Administration, Payroll Simulation

Time Management
Shift Planning, Work Schedules, Time Recording, Absence Determination

Personnel Development
Career/Succession Planning, Profile Match-ups, Training, TEMs

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
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Organizational Data
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

Structure of HCM

Enterprise Structure

Personnel Structure

Organizational Structure

Organizational Structure for HCM

Enterprise Structure
This structure makes up the legal identity of the company The Enterprise Structure is made up of the following elements:
Client Company Code Personnel Area Personnel Subarea

Enterprise Structure
Client
technical structure feature

Company Code
highest level of the enterprise structure

Personnel Area
divides the company into sub-units (unique to a client) locations or divisions

Personnel Subarea
subdivision of the personnel area (the grouping of the personnel area and subarea must be unique to a company code) departments

Enterprise Structure: Pen Inc.

Client

Client 420 Pen Inc 100

Company Code

Personnel Area

P100
Pen Inc. Central Office

P101
Pen Inc. MFG Center

Personnel Subarea

0001
Administration

0002
Finance

0001
Manufacturing

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Personnel Structure
This structure describes an employees position within the company in regards to work hours and compensation The Personnel Structures is made up of the following elements
Employee Group Employee Subgroup Payroll Area

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Personnel Structure: Elements

Employee Group
represents a division of the companies employees and establishes a relationship between the company and the employee defines the extent which the employees capacity is available to for the company
Active Employee, Pensioner, Interns, External Employee

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Personnel Structure: Elements

Employee Subgroup
refines the relationship between company and employee
Standard Salary, Executive Salary, Daily Wage, Hourly Wage, Etc.

control features for the personnel structure are defined at this level.
employee relationship with payroll eligible work schedules, wage types, attendance policy, restrictions for collective agreement provision

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Personnel Structure: Elements

Payroll Area
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

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Organizational Structure
This is an overview of your Companys Organizational Plan (Org. Hierarchy)
Depicts the reporting structure and task distribution

The Organization Structure is made up of the following elements

Organizational Unit
represent functional units within an enterprise (ex. departments)

Position
spots that are occupied by individuals (Salesperson)

Job
classifications of functions within an enterprise
ex. Job: Officer, which is used for Positions: CEO, CFO, COO

job description for numerous positions

Person
the individual, he/she is assigned to a specific position

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Organizational Structure: Pen Inc

Organizational Units

Position

Person

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HCM: Master Data

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

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Employee Data
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

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Employee Data: Infotypes

Numerous infotypes will be created for each employee
Organizational Assignment must be the first infotype recorded

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Employee Data: Infosubtypes

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

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Employee Data: Personnel Actions

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

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

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HCM: Process/Functions
Recruitment Hire Employee Training and Development Cost Planning Reporting

ESS
Employee Self-Service

Manage Work Time (CATS)

Payroll Administration

Compensation & Benefits

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Recruitment Selection - Hiring

Applicants

Advertising Vacancy

Hire

Select & Notify

Profile Match
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HCM Process: Recruitment

allows you to 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

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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

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Recruitment: Applicant Administration

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

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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

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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

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HCM Process: Hiring

Master data (information) is obtained during the hiring process (employee data)
Personal Data, Payroll Data, Time Data, Etc.

Hiring can be integrated with Recruitment

information obtained about an applicant can be copied into his/her personnel record

Hiring can be done independently of Recruitment

through the Hiring personnel action (infotypes)

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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 A companys 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

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HCM Process: Training & Development

Personnel Development Career & Succession Planning

generate

Development Plan
determine

Appraisals

based upon

Qualifications/ Requirements

creates

Training

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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

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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 appraisals attendance appraisals

Compensation Management
appraisal results can be used to influence remuneration

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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

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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
comprises 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)

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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

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HCM Process: Training & Development

Training and Event Management (TEMs)

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

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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

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HCM Process: Training & Event Mgmt

Integration Points
MM SD

FI

TEMS

CO

Personnel Development

HCM
Time Management Organizational Administration Personnel Administration

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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

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HCM Process: Time Management

There are multiple methods for data collection:
Time Managers Workplace Time Terminals Time Administrators

Cross Applications Time Sheet Employee Self Service Mobile Technology

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HCM Process: Time Management

Time collection will be used for:
payroll accounting personnel cost analysis internal cost allocations invoicing performance analysis capacity availability shift planning

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HCM Process: Compensation & Benefits

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.

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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

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HCM 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

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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

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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

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HCM Process: Cost Planning Reporting used to analyze, monitor, plan a companys 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

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HCM Process: Employee Self-Service

Employee Self-Service (ESS)
empowers employees to create, display, and change their own personal information
streamlines and simplifies the HR data entry process

some of the capabilities include

SAP Office appointment calendar, employee directory Personal Information address, bank information Time Management record working time, request leave Business Trips submit travel request, reserve flights, rooms, also expense reimbursement process Training register for training, display your bookings Benefit Enrollment and Overview (Healthcare, Retirement, etc) Display Leave and Earnings Statements Qualification and Appraisal Review W-2 W-4 printout

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