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Human Resources Processes

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Title: Human Resources Processes


1
Human Resources Processes with ERP
2
Chapter Objectives
  • Explain why the Human Resources function is
    critical to the success of a company
  • Describe the key processes managed by a Human
    Resources Department

3
Chapter Objectives
  • Describe how an integrated information system can
    support effective Human Resources Processes

4
Introduction
  • A companys employees are its most important
    resources
  • The Human Resources Department is responsible for
    attracting, hiring, rewarding, terminating
    employees.
  • The decisions made in the HR department can
    affect every department in the company.

5
Introduction
  • Companies are increasingly aware of the
    importance of an experienced, well-trained
    workforce and have begun using the term Human
    Capital Management (HCM) to describe the tasks
    associated with managing a companys workforce.

6
HR Department Responsibilities
  • Attracting, selecting, and hiring new employees
    using information from resumes, references, and
    the interview process
  • Communicating information regarding new positions
    and hires throughout the organization and beyond

7
HR Department Responsibilities
  • Ensuring that employees have the proper
    education, training and certification to
    successfully complete their duties
  • Handling issues related to employee conduct
  • Making sure employees understand the
    responsibilities of their jobs

8
HR Department Responsibilities
  • Using an effective process to review employee
    performance and determine salary increases and
    bonuses
  • Managing the salary and benefits provided to each
    employee and confirming that the proper benefits
    are disbursed to new and current employees

9
HR Department Responsibilities
  • Communicating changes in salaries, benefits, or
    policies to employees
  • Supporting management plans for changes in the
    organization (expansion, retirements and so on)
    so that competent employees are available to
    support business processes

10
Problems with Fitter Snackers HR Processes
  • The description of the qualifications required
    for the job may be incomplete,
  • sometimes because the supervisor is in hurry,
  • sometimes because the supervisor does not realize
    all of the functions required for the position,
    and
  • sometimes because the supervisor assumes that all
    candidates will have certain basic skills.

11
Problems with Fitter Snackers HR Processes
  • Paper form can be lost, delaying hiring process
  • Functional department left shorthanded, creating
    tension between the departments
  • Good candidates lost due to drawn-out hiring
    process

12
Problems with Fitter Snackers HR Processes
  • Keeping track of resumes submitted from different
    sources is problematic
  • Being able to retrieve resumes on file that fit a
    job description is difficult, time-consuming and
    fraught with error

13
Problems with Fitter Snackers HR Processes
  • Interviewing Process Problems
  • Without group appointment software, HR has
    difficulty scheduling interviews when all
    interested parties are available
  • Similarly, collecting feedback on the job
    candidates is difficult
  • Managing travel arrangements and reimbursing
    candidates for travel expenses is also a problem
  • Delays may result in losing a top candidate

14
Problems with Fitter Snackers HR Processes
  • Gathering new employee information and enrolling
    employee in correct benefits plan (such as
    healthcare plans, life insurance, retirement
    plans, and medical savings accounts) is difficult
  • May take months to get employees proper
    compensation and benefits

15
HR Duties after Hiring
  • Performance Evaluations
  • Important to maintain sufficient documentation on
    underperforming employees in case termination is
    warranted
  • Without proper documentation, lawsuits may follow

16
HR Duties after Hiring
  • Performance Evaluations
  • Difficulties in managing performance evaluation
    data makes it difficult to identify employee
    problems and take corrective action (counseling,
    transfer) before problem leads to termination

17
HR Duties after Hiring
  • It is difficult to quantify the employees
    historical knowledge of the job, which is lost
    when an employee leaves a company. For example,
  • If a purchasing manager leaves a company, then
    all of the managers knowledge about supplier
    relation is lost.
  • The company does have a record of the contract
    signed with the supplier, but details of the
    negotiations that led to the contract may not be
    documented.

18
HR Duties after Hiring
  • Such details can be crucial in successfully
    negotiating the next contract.
  • The manager may have developed good relations
    with the supplier and knows who to contact when
    there are problems.
  • These relationships are not specified as part of
    the purchasing manager position, but accrue over
    time with the individual holding the position.

19
HR Duties after Hiring
  • Employee satisfaction is strongly related to job
    turnover
  • Well compensated employees with satisfying jobs
    are less likely to leave the company

20
HR Duties after Hiring
  • Human Resources can help maintain a satisfying
    work environment through
  • Training programs through supervisors and
    managers
  • Conducting employee satisfactions surveys
  • Conducting employee exit surveys
  • Human resources should ensure compensation levels
    are competitive and applied fairly to all
    employees

21
Human Resources with ERP
  • Managing a companys human capital is information
    intensive
  • Electronic storage of data greatly simplifies the
    retrieval of important data

22
Human Resources with ERP
  • The SAP R/3 HR module provides tools to
  • Manage an organizations structure, job roles and
    responsibilities, and definitions
  • Personal employee information
  • Time management
  • Payroll
  • Travel management
  • Employee training

23
Organizational Management
  • Most companies have an organizational chart or
    plan to help define an individuals
    responsibilities in the organization
  • With ERP, the organizational chart provides a
    structure to support additional tasks

24
Organizational Management
  • SAP R/3 provides an Organizational and Staffing
    Plan tool to define a companys management
    structure and define positions within the
    organizational structure
  • The plan can also define the individuals that
    hold each position

25
Organizational Units
Positions
Person holding position
Figure 6.1 Organization and Staffing Plan in SAP
R/3
26
Task, Job, Position and Person
  • SAP distinguishes between Task, Job, Position,
    and Person
  • An employee is a Person who performs Tasks
  • Tasks can be assigned to
  • Jobs, which are generic descriptions of an
    employees work responsibilities
  • Positions, which are the specific organizational
    assignments a person holds

27
Task, Job, Position and Person
  • If Tasks, Jobs and Positions are well-defined and
    current, then recruiting is simplified and
    compensation levels can be set more consistently
    and fairly

28
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29
Job
Task assigned to Job
Figure 6.3 Assignment of a Task to a Job in SAP
R/3
30
Managers Desktop
  • The SAP HR Module provides the Managers Desktop
    (see Figure6.4), a tool that provides access to
    all Human Resource data and transactions in one
    location
  • Human Resource data is very sensitive, so
    controlling access is critical

31
Managers Desktop
  • With an integrated information system,
    controlling access is simplified as a range of
    authorization tools are available
  • See User Authorizations in Chapter 5

32
Employees in managers organization
Functions in task area
Figure 6.4 Managers Desktop provides
single-point access to HR functions
33
Advanced SAP R/3 HR Features
  • Time Management
  • Cross Application Time Sheets (CATS) record
    employee working times and provide data to
  • Controlling (CO), for cost management
  • Payroll, for calculating payroll data, which is
    transferred to Financial Accounting (FI) for
    payment
  • Production Planning (PP), to manage labor
    required for production

34
Advanced SAP R/3 HR Features
  • Payroll Management
  • Paying employees the correct amount at the
    correct time is critical for employee
    satisfaction
  • Payroll calculations are complicated, involving
  • Remuneration Elements
  • Base pay, bonuses, gratuities, overtime and sick
    pay, vacation allowances

35
Advanced SAP R/3 HR Features
  • Statutory and Voluntary Deductions
  • Taxes Federal, State, Local
  • Medicare and Social Security
  • Benefit contributions
  • Company loans

36
Advanced SAP R/3 HR Features
  • Travel Management
  • Companies can spend a significant amount of money
    on employee travel
  • Managing travel planning and expenses requires a
    number of tasks
  • Travel authorizations
  • Travel reservations
  • Must meet trip requirements while controlling
    costs
  • Recording expenses and providing reimbursement

37
Advanced SAP R/3 HR Features
  • The SAP R/3 Travel Management system facilitates
    this process by maintaining travel data for each
    employee,
  • including flight, hotel and car preferences and
  • integrating this data with the Payroll module
    (for reimbursements) and with the Financial
    Accounting and Controlling modules to properly
    record travel expense.

38
Advanced SAP R/3 HR Features
  • Training and Development
  • The Personnel Development component of the SAP
    R/3 Human Resources module supports planning and
    implementation of employee development and
    training activities

39
Advanced SAP R/3 HR Features
  • Employee development is driven by Requirements
    and Qualifications
  • Requirements Skills or abilities associated with
    a position
  • Qualifications Skills or abilities associated
    with a specific employee
  • Two perspectives on the same concept

40
Advanced SAP R/3 HR Features
  • Training and Development
  • An employees qualifications can be compared to
    the requirements of a position to which the
    employee aspires
  • The comparison identifies gaps and allows a
    manager to plan development and training efforts
    to close the gap
  • The comparison can serve as a basis for employee
    evaluation, and can motivate the employee by
    providing a goal and a means to achieve it

41
Advanced SAP R/3 HR Features
  • Succession Planning
  • Companies should have plans for replacing key
    employees when they leave the company
  • Small companies can lose business if customers
    are unclear about succession plans for key people

42
New HR Features in SAP R/3
  • Mobile Time Management Allows employees who
    spend significant time on the road to use
    cellular phones and other mobile devices to
    record work times, time charges, absences, and
    leave requests

43
New HR Features in SAP R/3
  • Management of Family and Medical Leave The SAP
    R/3 HR system can now determine employee
    eligibility for FMLA leave and track usage

44
New HR Features in SAP R/3
  • Personnel Cost Planning Scenarios can be
    developed for major organizational changes like
    expansions, acquisitions and downsizing to
    determine the cost impacts
  • Cost planning and simulation allows HR to
    forecast cost estimates by integrating data with
    other SAP R/3 modules

45
New HR Features in SAP R/3
  • Management and Payroll for Global Employees
    Managing global employees involves complicated
    issues including relocation, visas, work permits,
    housing, taxes, and bonus pay
  • SAP R/3 has enhanced features to support the
    management of these issues with customized
    functionality for over 50 countries

46
Summary
  • Employees are among a companys most important
    assets. Without qualified and motivated
    employees, a company cannot succeed

47
Summary
  • The Human Resources Department has the primary
    responsibility of ensuring that the company can
    find, evaluate, hire, develop, evaluate, and
    compensate the right employees to achieve the
    companys goals. HR is also responsible for
    employee training and development, succession
    planning, and termination

48
Summary
  • Managing, sharing, controlling, and evaluating
    the data required to manage a companys human
    capital is simplified with an integrated
    information system

49
Summary
  • Effective Human Resource processes require a
    system that controls the flow of timely and
    accurate information within and among departments

50
Exercise
  • 1. Describe a position in a company that you
    would like to have after five years of work
    experience. List the requirements that you think
    would be required to hold this position. List the
    qualifications that you currently possess.
    Describe how you plan to obtain the
    qualifications necessary to hold the position.

51
Exercise
  • 2. List the steps in a typical recruiting
    process. Highlight the steps that involve
    interaction with the potential job candidate.
    Identify problems in the process that might lead
    a candidate to develop a negative opinion of the
    company. How might an effective information
    system reduce the potential for these problems?
    Incorporate into your answer experiences you may
    have had in looking for a job.
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