Human Capital
Management
(HCM)
BPI - Overview
January 2007 (v1.0)
The Rushmore Group, LLC
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Goal of HCM
• Right People for Right Job at the Right Time
• Functions
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determining staffing needs
recruitment and training
time management
performance issues and performance monitoring
compensation and benefits
proper alignment of corporate and personnel goals
January 2007 (v1.0)
The Rushmore Group, LLC
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Shift in HCM
• Effects of Globalization and Technology
– Stereotype shift
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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Structure of HCM
•
Enterprise Structure
•
Personnel Structure
•
Organizational Structure
January 2007 (v1.0)
The Rushmore Group, LLC
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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:
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Client
Company Code
Personnel Area
Personnel Subarea
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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Enterprise Structure: Pen Inc.
Client
Client 420
Company
Code
Pen Inc 100
Personnel
Area
Personnel
Subarea
January 2007 (v1.0)
P100
P101
Pen Inc. Central Office
Pen Inc. MFG Center
0001
0002
0001
Administration
Finance
Manufacturing
The Rushmore Group, LLC
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Personnel Structure
• This structure describes an employee’s 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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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Organizational Structure
• This is an overview of your Company’s 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
January 2007 (v1.0)
The Rushmore Group, LLC
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Organizational Structure: Pen Inc
Organizational Units
Position
Person
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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Employee Data: Infotypes
• Numerous infotypes will be created for each employee
– Organizational Assignment must be the first infotype recorded
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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Personnel File
• Information maintained about an employee is stored in their
Personnel File
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM: Process/Functions
Hire
Employee
Recruitment
Training and
Development
Cost Planning
Reporting
ESS
Employee
Self-Service
Payroll
Administration
January 2007 (v1.0)
The Rushmore Group, LLC
Manage Work
Time (CATS)
Compensation
& Benefits
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Recruitment – Selection - Hiring
Applicants
Advertising
Vacancy
Hire
January 2007 (v1.0)
Select & Notify
The Rushmore Group, LLC
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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
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cost
applications
medium
recruitment instrument
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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)
January 2007 (v1.0)
The Rushmore Group, LLC
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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 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:
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Qualifications/Requirements
Appraisal Systems
Career and Succession Planning
Development Plans
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM Process: Training & Development
Personnel
Development
Career &
Succession
Planning
creates
Training
based upon
Qualifications/
Requirements
January 2007 (v1.0)
Development
Plan
determine
Appraisals
generate
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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)
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM Process: Training & Event Mgmt
• TEMS Catalog Structure
– Business Event Groups
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Used to classify business event types
– Business Event Types
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Time independent description of a
business event
– Business Events
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Actual time based event that is to take
place
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM Process: Training & Event Mgmt
– Integration Points
MM
FI
Personnel
Development
SD
TEMS
HCM
Time
Management
Organizational
Administration
January 2007 (v1.0)
CO
The Rushmore Group, LLC
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
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hours worked
leave
illness
overtime
substitutions
business trips
• conference, training
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM Process: Time Management
• There are multiple methods for data collection:
Time Administrators
Time Manager’s Workplace
Time Terminals
Cross Applications Time Sheet
Employee Self Service
Mobile Technology
January 2007 (v1.0)
The Rushmore Group, LLC
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HCM Process: Time Management
• Time collection will be used for:
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payroll accounting
personnel cost analysis
internal cost allocations
invoicing
performance analysis
capacity availability
shift planning
January 2007 (v1.0)
The Rushmore Group, LLC
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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:
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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)
The Rushmore Group, LLC
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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:
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Job Pricing
Budgeting
Compensation Administration
Long-term Incentives
January 2007 (v1.0)
The Rushmore Group, LLC
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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
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Benefit Plan Participation
Health Plan Costs
Employee Demographics
Benefits Election Analysis
• Country Specific Settings available
– FSA, COBRA (US examples)
• HIPPA Certificates
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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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
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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
January 2007 (v1.0)
The Rushmore Group, LLC
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