ORGANIZATIONS

An Enterprise might have a set of child Organizations attached to it.

Similarly, it might have operations in more than one country with the
expanded business. In these cases, each entity, which operates with its
own business rules, is called an Organization. Again, there could be
internal and external Organizations. Internal Organizations are the
divisions and departments inside the enterprise. Externals are the ones
that are not directly under the enterprise umbrella; however peripheral
entities with which our enterprise deals on a frequent basis. For an
example, a Life Insurance Provider might be an External Organization.

Organizations are stored in HR_ALL_ORGANIZATION_UNITS, with

ORGANIZATION_ID as the primary key. It’s a DATE_TO Enabled table. The
Type of the Organization informs us whether it’s an Organization /
Department / Division.

To understand it better, let’s take an example of an enterprise that

manufactures car tyres. In the enterprise, there will be a registered
executive office that manages all the judicial and legal relations of the
firm. Then there will be big departments / pillars that are focused into one
type of activity / business for the firm, like sales, marketing,
manufacturing, systems etc. Now each of these big departments will have
smaller departments / divisions and further those departments divide
further into smaller sub-divisions. This might go on and on to the most
granular level of the firm. If we sort them graphically, that will look like an
inverted tree, wont it? This is known as Organizational hierarchy and the
structure in them, like our divisions, sub-divisions are known as
Organizations.

NOTE

Organizations are not essentially Internal. There will be clients and

vendors that are connected to the firm by a business Channel; and if
we need to capture information of them, we should define them as
Organizations as well.
Organization Classification
Organization classification is like a tag attached to the Organizations that
specify the purpose and usage of the Organization in the application. Let’s
take an example. We have our Manufacturing Department. Which is an
Operating unit, because it has its own set of managers managing it, a
Company Cost centre, because it maintains its own ledger books for
costing, and an Inventory Organization, as it maintains its own inventory
structure. Now the same organization is classified as three different types
of classifications and the classifications tell us more about the
organization.

But why need classification? Simple, we need classification to capture

Information. For an Example, if we have to make an organization, a Legal
Entity, we will have to store the name of the CEO, the Remuneration
head’s name, the tax id number, the Employer id number etc. and we
need all these because of the Government requirements. Because our
Seeded reports and interfaces that are sent to the Government/ tax
entities will look for Information like that in our system, and we must store
them. Again, we do not need these details for all the Organizations. We
just need the details for the Organizations that are legal entities.

The simplest way, one can think of, is to create a classification named
“Legal Entity” and add an EIT to it, and then just add the classification
whenever necessary so that we can capture the information. If we have
four different legal entities in the firm, we will have to attach it to the four
different organizations. Oracle has designed it the same way.

Legal Entity was just an Example, there are many such classifications that
need specific information to be stored, in order to get the system working
as expected.

Configuring an organization
Now, let’s create an organization. See Figure 2.7 – Defining Organizations.

Responsibility: Super HRMS Manager

Navigation: Work Structure -> Organization -> Description

Steps:

Figure 7 Defining Organizations

(Figure 2.7 – Defining Organizations)

The Organization table has a DFF that can be used to store more
information that we are unable to store with in Organizational Attributes.
This is time to add Classifications. A normal firm needs a different set of
classifications based on the localization. Like if our firm is in UK, we must
have an “Education Authority”; if we are in India, we must have a PTO
(Professional Tax Organization) etc. So based on our localization, we must
choose our classifications.

NOTE:

For the list of required organizations for a particular Localization;

please refer to Oracle documentation.

Let’s discuss the mandatory classifications that are needed for every
HRMS set up: like Operating Company, Business Group, Legal Entity, HR
Organization, Operating unit etc. Let’s discuss them one by one.
Business Group
Business group is an entity that represents an instance of the enterprise.
A business group enables us to group and manage data in accordance
with the rules and reporting requirements of each enterprise model, and
to control access to data. Business Groups are also a type of Organization.
They are stored in the same HR_ALL_ORGANIZATION_UNITS table.

A Business Group is like the backbone of the firm. This is the classification
that uniquely identifies the firm in one particular country / localization. For
an Example, if we have XYZ Corp. in India, Poland and UK, we should have
three different entities with us, isn’t it? So that each entity deals with the
legal compliance with the Government of each of the countries we
operate in. Those entities will manage the reporting, data management
and rules of the country. That entity is known as Business Group. In this
case we will create three Organizations with business Group as a
classification added to them.

NOTE:

Each localization should, however not necessarily hold its own

Business Group. Creation of business group entirely depends on the
design of the HR Organization structure.

Almost all the details that we store in our system can be classified based
on Business Groups. The system looks at the business group we are
working in, and then filters the set up and data based on that while in use.

The Business Group EITs / BG EITs hold a lot of set up attributes. These set
up are used by the system, based on the business group we are using. For
an example, in XYZ, Poland, we may not want the employee numbers to
be generated automatically, but in UK, we want it to be generated
automatically whenever there is a new employee created; based on the
last number used. This can be added in the BG EITs, and later can be
referred by the system. Not only that, there are a lot of defaults that can
be used in BG EITs.

Once we have added Business Group as a Classification in an Organization

(The one that we want to use as a BG); click on others and we will see a lot
of EITs in there. Those EITs store the default values. Here are the some
important ones:
Business Group Info EIT

1. Employee number Generation – Automatic / Manual.

2. Applicant number Generation – Automatic / Manual.

3. The KFF names of Job, Position, Grade, People Group, Cost allocation
and Competency.

4. The Legislation code: defines the Government it should report to.

5. The Currency to be used in the BG.

6. The start of the Fiscal Year.

Benefits defaults EIT

1. Default Payroll name.

2. Do we want to create the benefits assignment or not.

PTO Balance Types

1. Balance type: date earned / date paid: this is where we instruct our
system to pick the date, based on which the accruals will be calculated in
Payroll. Don’t worry about accruals and payroll now; we have an entire
chapter based on it. : )

Pay slip Information

1. If there is some balance/information that is not appearing on the Pay

slip and we want it to be added on to it, this is the EIT where we need to
do it.

SOE Information

1. Same as the Pay slip EIT, however this manages the SOE- Statement of
Earning.

Self Service preference

1. This is a place to configure some details on our SSHR. Like the following
questions.

2. Do we need paper pay slips / online pay slips / both?

3. Do we want to have the pay slip available based on date paid / pay slip
view date?

4. Do we want the Address on pay slip to be the address from Legal Entity
or the HR Org?

There are many more to it; however we are discussing some basic ones
that are used most frequently.

We can associate our business group with the responsibility we are using,
so that the data and configuration filtration can happen accordingly.

Legal Entity
A legal entity is a representation of an employer. A Country knows each
and every legal entity as independent Employers and the various rules and
regulations are attached to this entity. So If XYZ Poland, has a Marketing
team, that operates parallel to the Manufacturing team, however is
considered a separate employer, then manufacturing team will be a
separate legal entity. On the flip side, if we are employing in a country, we
must have a legal entity.

The Legal Entity has EITs as well; however most of them are based on the
localizations. Let’s discuss the most important one: Tax Information. In this
EIT we specify the Company tax Reference number, Registration number,
the Trade classification: telling the system the type of trade our company
does etc. We might also need to key in the Income tax Number for the tax
departments (IRS/ ITD / SARS etc) based on the localization.

HR Organization
This is the entity that is assigned to the employees. This is the actual
organization that appears on the assignment screen; so all departments,
divisions, subdivisions etc are actually HR Organizations. We must create
all the internal organizations (Departments, Pillars, and Verticals) with this
classification on them.

Operating Unit
An Operating unit classification is used in a case, where we have a Multi-
Org application. In that case, a set of operating units operate like
independent units that works under an umbrella of a big organization.
Usually each Operating unit is also classified with the HR Organization. So
that employees in that HR Organization or below are considered part of
that Operating unit. Although the Operating unit does not relate a lot to
HRMS, it has a very vital role in Finance and SCM modules.

ORGANIZATION
HIERARCHY
Every firm follows a hierarchy. It is the structure with which the
Departments, Divisions and sub divisions are sorted in the firm. It is the
reporting structure that looks like an inverted tree. Once the organizations
are created, we create a hierarchy, which can be called as Primary
Reporting Hierarchy. This is the basic way with which the entire reporting
has to work. However we can create a number of secondary hierarchies to
support other laterals of the business.

Question, is this just to make sure that the reporting is defined? Or are
there other usages of Organizational hierarchies?

There are many. However let’s focus on the two important ones here.
 Security: In many security profiles, we use the parent organization

name, and all the children Organizations are considered

automatically. For an Example HR-Global is our parent Organization
 for HR, and there are other HR children Organizations like, HR-New
York, HR-Philadelphia, HR-SFO, HR-Colorado etc. Now, we do not
want the Colorado HR people to see the data of HR-New York. So we
will create a security profile just based on HR-NY and add that to HR-
NY responsibility. Similarly we will create one for each of the
Organizations. But what about the HR-Head of our Organization, he
needs to be able to see everything. Here, we will create a new
security profile called: HR-Global, and use the same in Hr-Head’s
responsibility. As HR-Global is the parent and all others are children,
HR-Head can now, access all children organization data as well. It is
similar to the Folder structure, where one folder when locked, locks
all the subfolders accordingly.
 Reports: While running reports to include all children organizations
we can just key in the Parent Org along with the hierarchy, and it
does it all. For example, if we want to run a report for all HR data, we
can just run it on the HR-Global and all children organizations will be
included automatically.

So those were the two additional advantages of Organizational

hierarchies. Let’s see, how to define and control one.

Creating a Hierarchy
Responsibility: Super HRMS Manager

Navigation: Work Structure -> Organization -> Hierarchy

Steps:
 · Create a new hierarchy; add a name in the name field

 · Mark it as primary
 · Add the Version number (Initially one), from date and to date
 · Save the changes
 · Now in the Organization field, query for the top most Organization
 · And in the subordinate block, keep on adding the organization
reporting to the parent one
  · Save the changes
 · Now query one of the secondary organizations (Organizations
reporting to the top Org) and keep on adding its child organizations
 · Likewise, keep on establishing the relationship between the
organizations
 · The up and down buttons can be used to move an Organization up
or down in the hierarchy.
 Let’s say, our Organization hierarchy changes after two years, and
then we do not have to create a new organization all over again. We
can just create a new version.
 · Query our primary hierarchy; populate the end date and save it.
 · Click on the version number, and press the down arrow to go to
the next record.
 · Now add the new version number with new start and end dates.
 · We know the rest of the steps, keep on adding the organizations.
 · Else we can just copy the hierarchy using the copy hierarchy button
and then structure as per our requirement.

Using Diagrammer
This is a screen where we can go and see the hierarchy in a tree like
structure for better understanding. The screen also has search settings to
search for the particular organization.

Responsibility: Super HRMS Manager

Navigation: Work Structure -> Organization -> Diagrammer

Steps:
 · Query the name of the Organization hierarchy.

 · Go on to the next record, until we find the correct version number

with start and end dates.
 · Click on Open editor.
 · This will show us a diagrammatic representation of the
Organization hierarchy.
 · We can use the find button to look for the organizations and their
child ones.