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Transcript of 1 Human Resources Processes with ERP. Concepts in Enterprise Resource Planning, Second Edition 2...
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Human Resources Processeswith ERP
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Chapter Objectives
Describe how an integrated information system can support effective Human Resources Processes
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Concepts in Enterprise Resource Planning, Second Edition
Introduction A company’s 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.
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Concepts in Enterprise Resource Planning, Second Edition
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 company’s workforce.
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Problems with Fitter Snacker’s 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.
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Concepts in Enterprise Resource Planning, Second Edition
Problems with Fitter Snacker’s 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
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Concepts in Enterprise Resource Planning, Second Edition
Problems with Fitter Snacker’s 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
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Concepts in Enterprise Resource Planning, Second Edition
Problems with Fitter Snacker’s 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
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Concepts in Enterprise Resource Planning, Second Edition
Problems with Fitter Snacker’s 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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
HR Duties after Hiring
It is difficult to quantify the employee’s 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 manager’s 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.
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Concepts in Enterprise Resource Planning, Second Edition
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.
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Human Resources with ERP
Managing a company’s human capital is information intensive Electronic storage of data greatly
simplifies the retrieval of important data
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Concepts in Enterprise Resource Planning, Second Edition
Human Resources with ERP
The SAP R/3 HR module provides tools to: Manage an organization’s structure, job
roles and responsibilities, and definitions Personal employee information Time management Payroll Travel management Employee training
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Organizational Management
SAP R/3 provides an Organizational and Staffing Plan tool to define a company’s management structure and define positions within the organizational structure The plan can also define the individuals
that hold each position
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Concepts in Enterprise Resource Planning, Second Edition
Figure 6.1 Organization and Staffing Plan in SAP R/3
Organizational Units
Positions
Person holding position
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Concepts in Enterprise Resource Planning, Second Edition
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 employee’s work responsibilities
Positions, which are the specific organizational assignments a person holds
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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Concepts in Enterprise Resource Planning, Second Edition
Figure 6.3 Assignment of a Task to a Job in SAP R/3
Job
Task assigned to Job
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Concepts in Enterprise Resource Planning, Second Edition
Manager’s Desktop
The SAP HR Module provides the Manager’s 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
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Concepts in Enterprise Resource Planning, Second Edition
Manager’s Desktop
With an integrated information system, controlling access is simplified as a range of authorization tools are available See User Authorizations in Chapter 5
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Concepts in Enterprise Resource Planning, Second Edition
Figure 6.4 Manager’s Desktop provides single-point access to HR functions
Employees in manager’s organization
Functions in task area
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Advanced SAP R/3 HR Features
Statutory and Voluntary Deductions Taxes: Federal, State, Local Medicare and Social Security Benefit contributions Company loans
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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.
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Advanced SAP R/3 HR Features
Training and Development An employee’s 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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
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
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Concepts in Enterprise Resource Planning, Second Edition
Summary
Employees are among a company’s most important assets. Without qualified and motivated employees, a company cannot succeed
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Concepts in Enterprise Resource Planning, Second Edition
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 company’s goals. HR is also responsible for employee training and development, succession planning, and termination
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Concepts in Enterprise Resource Planning, Second Edition
Summary
Managing, sharing, controlling, and evaluating the data required to manage a company’s human capital is simplified with an integrated information system
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Concepts in Enterprise Resource Planning, Second Edition
Summary
Effective Human Resource processes require a system that controls the flow of timely and accurate information within and among departments
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Concepts in Enterprise Resource Planning, Second Edition
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.
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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.