Human Resources Processes with ERP

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 2 Concepts in Enterprise Resource Planning, Second Edition

Chapter Objectives  Describe how an integrated information system can support effective Human Resources Processes 3 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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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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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 6 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 7 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 8 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 9 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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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 11 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 12 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 13 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 14 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 15 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 16 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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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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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 19 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 20 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 21 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 22 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 23 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 24 Concepts in Enterprise Resource Planning, Second Edition

Organizational Units Positions Person holding position

Figure 6.1

Organization and Staffing Plan in SAP R/3 Concepts in Enterprise Resource Planning, Second Edition 25

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 26 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 27 Concepts in Enterprise Resource Planning, Second Edition

Concepts in Enterprise Resource Planning, Second Edition 28

Figure 6.3

Assignment of a Task to a Job in SAP R/3 Concepts in Enterprise Resource Planning, Second Edition Job Task assigned to Job 29

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 30 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 31 Concepts in Enterprise Resource Planning, Second Edition

Employees in manager’s organization Functions in task area

Figure 6.4

Concepts in Enterprise Resource Planning, Second Edition