January 2007 (v1.0) The Rushmore Group, LLC1 Human Capital Management (HCM) BPI - Overview

January 2007 (v1.0) The Rushmore Group, LLC 1

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


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

PersonnelSubarea

CompanyCode

PersonnelArea

Client 420

Pen Inc 100

P100Pen Inc. Central Office

P101Pen Inc. MFG Center

0001Administration

0002Finance

0001Manufacturing


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


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



• 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



• 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


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


Organizational Structure: Pen Inc

Organizational Units

Person

Position


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


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


Employee Data: Infotypes

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


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


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


Personnel File

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


HCM: Process/Functions

Recruitment

Cost PlanningReporting

Training and Development

Manage WorkTime (CATS)

PayrollAdministration

Hire Employee

ESSEmployee

Self-Service

Compensation& Benefits


Recruitment – Selection - Hiring

Hire Profile Match

Vacancy

Applicants

Advertising

Select & Notify


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


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


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



• 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



• 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


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)


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:– Qualifications/Requirements– Appraisal Systems– Career and Succession Planning– Development Plans


HCM Process: Training & Development

Personnel Development

Development Plan

Appraisals

Qualifications/Requirements

Career & Succession

Planning

Training

develop

based upon

generate

de

term

ine

creates



• 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



• 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



• 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



• 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)



• 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



– 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

• Training and Event Management (TEMs)


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


HCM Process: Training & Event Mgmt

– Integration Points

TEMS

SDMM

COFI

HCMPersonnel

Development

PersonnelAdministration

OrganizationalAdministration

TimeManagement


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



• There 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



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


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.


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


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


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


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


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


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

Documents

January 2007 (v1.0) The Rushmore Group, LLC1 Human Capital Management (HCM) BPI - Overview