Human Capital Management (HCM)

1
Human Capital Management(HCM)

• BPI - Overview

2
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

3
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

4
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

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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

6
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

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Structure of HCM

• Enterprise Structure
• Personnel Structure
• Organizational Structure

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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

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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

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Enterprise Structure Pen Inc.
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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
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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

23
HCM Process/Functions
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Recruitment Selection - Hiring
Applicants
Advertising
Vacancy
Select Notify
Hire
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
develop
generate
based upon
determine
creates
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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/Requirement
  s 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

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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

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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