MIS490 3

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Enterprise Systems Configuration for Business

MIS 490

CHAPTER 6

Human Resources Processes with ERP

Objectives

After completing this chapter, you will be able to:

• Explain why the Human Resources function is critical to the success of a company

• Describe the key processes managed by a Human Resources department at Fitter Snacker

• Describe how an integrated information system can support effective Human Resources processes

Introduction

• Human capital management (HCM): tasks associated with managing a company’s workforce

• Human Resources (HR) department responsibilities • Attracting, selecting, and hiring new employees

• Communicating information regarding new positions and hires

• Ensuring proper education, training, and certification for employees

• Handling issues related to employee conduct

• Making sure employees understand job responsibilities

Introduction (cont’d.)

• Human Resources (HR) department responsibilities (cont’d.) • Using effective process to review employee performance and determine

salary increases and bonuses

• Managing salary and benefits for each employee

• Communicating changes in salaries, benefits, or policies to employees

• Supporting management plans for changes in the organization

Problems with Fitter Snacker’s Human Resources Processes • Personnel management relies on paper records and a manual filing

system • Creates problems

• Information is not readily accessible or easy to analyze

• Recruiting Process

• Interviewing & Hiring Process

• Post Hiring Process

Recruiting Process

• Fitter Snacker (FS) has three employees in its HR department

• Problems occur because of: • Large number of HR processes (from hiring and firing to managing health

benefits)

• Lack of integration among all departments

• Number of people with whom HR interacts

• Inaccurate, out-of-date, and inconsistent information

Recruiting Process (cont’d.)

• Problems that can arise in the recruiting process: • Description of qualifications required for the job may be incomplete or

inaccurate

• Job vacancy form may be lost or not routed properly • Human Resources department will not know that the position is available

• Supervisor will assume that paperwork is in process

• Filing and properly keeping track of resumes and applications is a challenge at Fitter Snacker • Due to applicant’s data being kept on paper form

The Interviewing and Hiring Process

• At FS, requesting department develops a short list of candidates based on data provided by HR

• Human Resources department: • Contacts candidates on the short list

• Schedules interviews

• Creates a file for each candidate

• If a candidate accepts an interview offer, HR makes arrangements for the interview • After the initial interview, HR updates candidate’s file to indicate whether he

or she is a possibility for hire

The Interviewing and Hiring Process (cont’d.)

• Second interview may be scheduled

• HR representative and supervisor of requesting department decide which candidates are acceptable and rank them

• HR person makes the highest-ranking candidate a job offer

• Acceptance of job offer by candidate

The Interviewing and Hiring Process (cont’d.)

• Many of Fitter Snacker’s problems in interviewing and hiring process deal with information flow and communication

• After candidate accepts formal job offer, Fitter Snacker hires an HR consulting firm to perform a background check

• Fitter Snacker frequently has problems enrolling new employees in correct benefits plans and establishing proper payroll deductions

Human Resources Duties after Hiring

• HR department should maintain good, continual communication with employee and supervisor to make sure the employee is performing well

• Fitter Snacker issues performance evaluations to new and current employees • Evaluation documents become part of employee’s file; maintained by HR

department

Human Resources Duties after Hiring (cont’d.)

• Not having an effective information system makes it difficult for Fitter Snacker: • To manage all of the performance evaluation data

• For HR department to identify problems with an employee and take corrective action

• To maintain proper control of sensitive personal information

Human Resources Duties after Hiring (cont’d.)

• Employee turnover can be a significant problem • Costs related to hiring and training new employees

• Companies lose knowledge and skills that may be crucial to keeping them competitive

• Employee turnover is strongly related to job satisfaction and compensation

Human Resources with ERP Software

Figure 6-1 Personal data stored in SAP Human Resources software

Human Resources with ERP Software

• A good information system allows all relevant information for an employee to be retrieved in a matter of seconds

• SAP ERP Human Resources (HR) module provides tools for: • Managing an organization’s roles and responsibilities

• Definitions

• Personal employee information

• Tasks related to time management, payroll, travel management, and employee training

Human Resources with ERP Software (cont’d.)

• SAP ERP’s Organization and Staffing Plan tool is used to define: • Company’s management structure

• Positions within the organizational structure

• SAP ERP distinguishes between task, job, position, and person

• Manager’s Desktop tool within SAP HR module • Provides access to all Human Resources data and transactions in one location

Figure 6-2 Organization and staffing plan in SAP ERP

Human Resources with ERP Software (cont’d.)

Figure 6-3 Relationships among positions, jobs, tasks, and persons who fill

positions

Advanced SAP ERP Human Resources Features • Time management

• Payroll processing

• Travel management

• Training and development

Time Management

• Hourly employees • Paid for each hour worked

• Must record time that they work

• Salaried employees • Not paid based on hours worked

• Their time worked usually must be tracked as well

Time Management (cont’d.)

• SAP ERP system uses Cross Application Time Sheets (CATS) to: • Record employee working times

• Provide the data to applications including: • SAP Controlling module

• SAP Payroll module

• SAP Production Planning module

Payroll

• Remuneration elements of an employee’s pay • Base pay, bonuses, gratuities, overtime, sick pay, and vacation allowances

• Statutory and voluntary deductions • Taxes (federal, state, local, Social Security, and Medicare), company loans, and

benefit contributions

• Payroll run: process of determining each employee’s pay • SAP ERP system evaluates input data and notes any discrepancies in error log

Travel Management

• Travel request may originate with employee or employee’s manager

• Travel requests usually require management approval

• Once travel request is approved, travel reservations must be made

Travel Management (cont’d.)

• SAP ERP Travel Management system • Maintains travel data for each employee, including flight, hotel, and car

preferences

• Integrates travel data with: • Payroll module for reimbursements

• Financial Accounting and Controlling modules to properly record travel expenses

Training and Development

• In SAP ERP system, employee development is driven by qualifications and requirements • Requirements: skills or abilities associated with a position

• Qualifications: skills or abilities associated with a specific employee

• One of the most important reasons for managing the development and training of employees is succession planning

Training and Development (cont’d.)

• Succession plan outlines strategy for replacing key employees when they leave the company

• Career and Succession Planning components of SAP ERP Human Resources module • Allow HR professionals to create, implement, and evaluate succession

planning scenarios

Additional Human Resources Features of SAP ERP • Mobile time management

• Management of family and medical leave

• Domestic partner handling

• Administration of long-term incentives

• Personnel cost planning

• Management and payroll for global employees

• Management by objectives

Summary

• Employees are among a company’s most important assets • Without qualified and motivated employees, a company cannot succeed

• Human Resources department responsible for: • Ensuring that the company can find, evaluate, hire, develop, evaluate, and

compensate the right employees to achieve the company’s goals • Employee training and development, succession planning, and termination

• Managing, sharing, controlling, and evaluating the data required to manage a company’s human capital are simplified by an integrated information system

• Additional features of SAP HR systems address today’s changing technology and legislation