Professional Documents
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Chapter 6
Human Resources Processes with ERP
At a Glance
• Objectives
• Teaching Tips
• Quick Quizzes
• Additional Projects
• Additional Resources
• Key Terms
Concepts in Enterprise Resource Planning, 4th edition 6-2
Lecture Notes
Overview
The responsibilities of a human resources department usually include (but are not limited to)
attracting, selecting, and hiring new employees using information from résumés, references,
and personal interviews. Ensuring that these tasks are accomplished and that valid human
resources-related information is communicated throughout the organization requires a system
that effectively controls the flow of information. In this chapter, students will explore the role
of an integrated information system in human resources.
Objectives
• Explain why the role of the human resources department is critical to the success of a
company
• Describe the key processes managed by human resources departments
• Describe how an integrated information system can support effective human resources
processes
Teaching Tips
Problems with Fitter’s Human Resources Processes
1. Explain that Fitter Snacker has just three employees in its Human Resources
Department, and some problems arise simply because of the large number and variety
of department responsibilities (from hiring and firing to managing health benefits) as
well as the number of people with whom Human Resources interacts. A lack of
integration among all departments often results in inaccurate, out-of-date, and
inconsistent information.
Recruiting Process
1. Explain that a job opening is initially posted internally so that current employees have
the first opportunity to apply for the position. If no current employees are acceptable for
the position, then Fitter posts the position externally.
2. Discuss the problems that can occur throughout Fitter’s recruiting process.
3. Note that although Fitter does not use recruiting agencies or Internet job sites such as
Monster.com to find candidates, it does use several other methods. The company
publishes its job vacancies on the company’s Web site, in local newspapers, and, in the
case of management positions, in national publications.
Concepts in Enterprise Resource Planning, 4th edition 6-3
2. Point out that many of Fitter’s problems in the interviewing and hiring process have to
do with information flow and communication. Fitter does not have group appointment
calendar software, which would allow Human Resources staff to easily find a time
when all key personnel would be available to interview a candidate.
3. Explain that Fitter hires a human resources consulting firm to perform drug tests and
conduct background checks to verify that candidates have not falsified any information
and do not have serious criminal records.
1. Explain that a human resources department has responsibilities that continue beyond the
hiring and job start of an employee. The human resources department must maintain an
ongoing line of communication with the employee and his or her supervisor to make
sure the employee is performing well.
2. Note that because Fitter does not have an effective information system, it is difficult to
manage performance evaluation data. This makes it more challenging for the Human
Resources Department to identify problems with an employee and take corrective action
(such as job performance counseling or a transfer) before the problems lead to
termination.
3. Explain that employee turnover is strongly tied to job satisfaction and compensation. If
employees have satisfying jobs and are well compensated, they are less likely to leave
the company. Human resources can help maintain a satisfying work environment
through a number of means, such as by holding training programs for supervisors and
managers, conducting periodic employee satisfaction surveys, and gathering data from
employee exit surveys.
2. The SAP ERP Human Resources (HR) module provides tools for managing an
organization’s roles and responsibilities, definitions, personal employee information,
and tasks related to time management, payroll, travel management, and employee
training. Use Figure 6-1 to aid the discussion.
Concepts in Enterprise Resource Planning, 4th edition 6-4
3. SAP ERP provides an Organization and Staffing Plan tool that is used to define a
company’s management structure and the positions within the organizational structure
as a whole. The Organization and Staffing Plan tool also names the person who holds
each position. Use Figure 6-2 to aid the discussion.
4. Introduce the term position. Use Figures 6-3 and 6-4 to aid the discussion.
5. Complete and accurate human resources data simplify a manager’s duties. The
Manager’s Desktop tool within the SAP Human Resources module provides access to
all the human resources data and transactions in one location. Use Figure 6-5 to aid the
discussion.
Quick Quiz 1
1. In SAP, a(n) ____ is a general classification of tasks that are routinely performed
together.
Answer: job
3. In SAP, a(n) ____ is a unique individual who holds a position and who performs tasks.
Answer: person
4. (True or False) Employee turnover is strongly tied to job satisfaction and compensation.
Answer: True
Time Management
Payroll Processing
Travel Management
1. Because airfare, hotel, and rental car costs can vary widely, companies frequently
require employees to make reservations through either a company travel office or a
travel agency that is under contract to the company. The employee must keep receipts
for expenses incurred during the trip in order to complete an expense report and receive
reimbursement. Note that the SAP ERP Travel Management system facilitates this
process by maintaining travel data for each employee.
2. Explain that travel management is getting easier - and mobile - with SAP’s Travel
OnDemand product, which is hosted by SAP and accessed via the Internet.
1. Point out that without an effective human resources information system, managing the
training, development, and certification needs for a company’s employees can be both
time consuming and prone to error.
1. SAP’s Mobile Time Management tool allows employees to use smartphones or other
mobile devices to record their working times, record absences, or enter a leave request.
1. Point out that the Human Resources module alleviates some of the administrative
burden imposed by the federal Family and Medical Leave Act (FMLA) of 1993.
Concepts in Enterprise Resource Planning, 4th edition 6-6
1. Note that the Human Resources module now supports the management of benefits for
domestic partners and their children.
1. An outgrowth of the Sarbanes-Oxley Act is that companies must account for the
expected costs that will occur as a result of long-term employee incentives, such as
stock options. Note that the Human Resources module provides more options for
processing long-term incentives.
1. Point out that the Personnel Cost Planning tool allows human resources staff to define
and evaluate planning scenarios to generate cost estimates.
1. Companies who manage a team of employees around the globe face many complicated
issues, including managing relocation plans, visas and work permits, housing, taxes, and
bonus pay in a variety of countries. Note that SAP ERP has enhanced features to
support the management of these issues.
Management by Objectives
1. Explain that SAP ERP supports the MBO approach through a process that incorporates
performance appraisal. The appraisal results can affect an employee’s compensation,
generating annual pay raises that can be significant, depending on the employee’s
performance
Quick Quiz 2
1. The ____ of an employee’s pay include the base pay, bonuses, gratuities, overtime pay,
sick pay, and vacation allowances the employee has earned during the pay period.
Answer: remuneration elements
2. ____ are paycheck withholdings that include taxes (federal, state, local, Social Security,
and Medicare), company loans, and benefit contributions.
Answer: Statutory and voluntary deductions
4. The term ____ refers to the skills or abilities associated with a position.
Answer: requirements
Concepts in Enterprise Resource Planning, 4th edition 6-7
2. Why are background checks conducted and what type of information is usually red
flagged?
Additional Projects
1. You are an employee of Fitter Snacker and you have just been informed that the
company needs to recruit a manager for the Accounting and Finance department. List
the requirements that you think would be necessary to hold this position.
2. Based on your answer for Question 1, describe the process you would use to recruit the
manager.
Additional Resources
1. Human capital management (HCM):
http://www.sap.com/solutions/business-suite/erp/hcm/index.epx
2. Succession planning:
http://help.sap.com/saphelp_46c/helpdata/en/cd/dae43e4ab011d18a0f0000e816ae6e/con
tent.htm
Key Terms
¾ error log A record of discrepancies that occur during a payroll run.
¾ human capital management (HCM) Another term for human resources that describes
the tasks associated with managing a company’s workforce.
¾ Job In SAP, a general classification of tasks that are routinely performed together.
¾ payroll run The process of determining each employee’s pay.
¾ person In SAP, the unique individual who holds a position.
¾ position In SAP, an individual employee assignment in an organization. Tasks can be
assigned directly to the position, or by assigning jobs to the position.
¾ Qualification A skill or ability associated with a specific employee.
Concepts in Enterprise Resource Planning, 4th edition 6-8
¾ remuneration element Part of an employee’s pay, such as the base pay, bonuses,
gratuities, overtime, sick pay, and vacation allowances the employee has earned during
the pay period.
¾ requirement A skill or ability associated with a position.
¾ short list The top candidates for a position, each of whom will be interviewed.
¾ statutory and voluntary deduction A paycheck withholding, such as taxes (federal,
state, local, Social Security, and Medicare), company loans, and benefit contributions.
¾ succession planning Outlining the strategy for replacing key employees when they
leave the company.
¾ task In SAP, an assigned responsibility related to a specific job.