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Human Capital Management HCM


shift from brute labor force to quality workers. get rid of the fishing nets and bring in the lines ... HR Master Data, Personnel Administration, Info. ... – PowerPoint PPT presentation

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Title: Human Capital Management HCM

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
  • transform employees into competitive resources

Modules within HCM
  • Personnel Management
  • HR Master Data, Personnel Administration, Info.
    Systems, Recruitment, Benefits Salary
  • Organizational Management
  • Organizational Structure, Staffing Schedules, Job
    Descriptions, Planning Scenarios, Personnel Cost
  • 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
  • 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
  • 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
  • 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.
Personnel Structure
  • This structure describes an employees position
    within the company in regards to work hours and
  • 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

Personnel Structure Elements
  • Employee Subgroup
  • refines the relationship between company and
  • 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

Personnel Structure Elements
  • Payroll Area
  • groups employees together that are paid the same
  • 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 Companys
    Organizational Plan (Org. Hierarchy)
  • Depicts the reporting structure and task
  • 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
  • Job
  • classifications of functions within an enterprise
  • ex. Job Officer, which is used for Positions
  • job description for numerous positions
  • Person
  • the individual, he/she is assigned to a specific

Organizational Structure Pen Inc
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
  • Before making the master data configurations, you
    must have completely defined the organizational

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
  • 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
  • Different addresses may be current at the same
  • 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 Selection - Hiring
Select Notify
Profile Match
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
  • cost
  • applications
  • medium
  • recruitment instrument

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

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

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

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 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
  • Qualifications/Requirements
  • Appraisal Systems
  • Career and Succession Planning
  • Development Plans

HCM Process Training Development
based upon
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

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

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
  • 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

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
  • 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

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
  • this is figured through Qualifications/Requirement
    s reports, development plans, career planning,
  • Encourage continually learning and professional
  • SAP offers a powerful resource to assist in
    scheduling training - TEMs

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

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

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

HCM Process Time Management
  • There are multiple methods for data collection

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

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
  • 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
  • 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
  • determine Deductions (Net Amount)
  • processes garnishments, deductions, taxes, and
    benefits for employees
  • Federal/State Income Tax, Insurance (Health,
    Life), Loans
  • Integration with Financial Accounting
  • G/L postings, payments processed, reports

HCM Process Cost Planning Reporting
  • used to analyze, monitor, plan a companys
    personnel costs, wages, salaries, and employer
  • 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
  • some of the capabilities include
  • SAP Office appointment calendar, employee
  • Personal Information address, bank information
  • Time Management record working time, request
  • Business Trips submit travel request, reserve
    flights, rooms, also expense reimbursement
  • Training register for training, display your
  • Benefit Enrollment and Overview (Healthcare,
    Retirement, etc)
  • Display Leave and Earnings Statements
  • Qualification and Appraisal Review
  • W-2 W-4 printout