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SAP Education (North America) presents: “How much do you know about…SAP Human Capital Management?”

Human Capital Management (HCM) is a company-wide strategy and is not only confined to HCM processes and functions. 


HCM is subdivided into:


  • Talent Management: This area represents the employee’s entire time at the company. The time of employment or the employee lifecycle can usually be divided into four phases: recruitment/hiring, assignment, development, retention at company. The HCM solutions should automate and optimize these four phases. The solutions improve the hiring process, make personnel planning more efficient, promote employee development, and improve employee retention at the company.
  • Workforce Process Management: Payroll, Benefits, Time Management, and so on, offer a wide range of functions with low operating costs.
  • Workforce Analytics: Reporting on the dataset using, for example, BW, SEM.
  • End-User Enablement: Cross-company relationships between employees, managers, contractors, and the company itself mean greater value-added gain.  This is achieved, for instance, through the portal-based components, such as ESS and MSS.


HCM solutions use technology to define, identify, use, and enhance your company’s human capital. Your company profits from a large value-added potential and the company’s bottom line can be improved.


Structures in SAP Human Capital Management


A Human Capital Management system enables you to set up organizational hierarchies and employee relationships and then store and administer employee data in the system.  You must be able to evaluate and report employee data flexibly and from all enterprise-specific organizational aspects.  Every employee is included in the structure of his or her enterprise. Data entry is restricted as the validity of all employee data is checked.


The structures of an enterprise are subdivided into organizational structures, based on an organizational plan, and administrative structures, based on the enterprise and personnel structures.


An organizational plan provides you with a complete model of the structural and personnel environment of your enterprise. Hierarchies and report structures are clearly laid out. The organizational plan is the foundation of Organizational Management. The organizational plan uses elements, called objects. The most important objects are organizational units, jobs, and positions.


The enterprise and personnel structures subdivide organizations and employees according to factors relevant to time management and payroll. These structures are stored in Customizing.


Hiring an Employee


As a personnel officer, you require a central data basis to form long-term relationships with internal and external applicants.  You want to find out about the recruitment processes offered by the E-Recruiting solution.


The E-Recruiting solution is a comprehensive, Web-based recruiting solution with the following goals:


  • Cost reduction – Including reduction of process costs, the costs for the concern-wide infrastructure, and talent acquisition costs.
  • Increased efficiency – Including automation of administrative tasks in recruiting, realignment of recruiters to consulting tasks, more efficient use of existing candidate contacts.
  • Improved target achievement/affectivity – Including greater accessibility of candidates/talent (particularly in areas that are short staffed), and employee retention.
  • Preparation for the future – Including introduction of new concepts and processes, and alignment of the organization to the challenges of the future (Change Management).


The main recruitment processes are mapped: Planning of workforce requirements, vacancy posting, and applicant hiring, and building up long-term contact to candidates.  The solution enables the HCM department to find current and potential applicants more efficiently and to maintain long-term relationships with them.


Education and Training


In the Personnel Development component, you can plan and implement specific personnel and training measures to promote the professional development of your employees.


The personnel development needs in an enterprise are determined by comparing current and future working requirements with existing skills, qualifications and development preferences of the employees. These development measures might be geared toward an employee being transferred to a specific post (using career and succession planning scenarios). They might also be more general measures geared toward retaining or enhancing existing employee skills and abilities, or ensuring that employees keep pace with technological developments.


Qualifying actions (such as training courses or job rotation) can be grouped into development plans (for example, a trainee program for sales staff). Such development plans are referred to as general development plans since they apply to all employees.  These general development plans can be tailored to the needs of individual employees.


The performance and conduct of employees can be appraised. The appraisal results can provide input for planning an employee’s further career development. You can also maintain objective setting agreements.


Training and Event Management comprises four main processes:


  • The business event preparation phase comprises the creation and maintenance of all of the master data you access when you create your business event catalog: time schedules, event locations, resources and so on. You also create the business event groups and event types that form the basic framework of your event catalog.
  • You then create your business event catalog. You can create individual event dates with or without resources, and you can plan multiple event dates at one go based on the existing demand.
  • Once you have created your business event catalog, you can carry out day-to-day activities for the events. You can make bookings for both internal and external attendees, prebook attendance, replace bookings, rebook and cancel attendance.  The Correspondence function provides suitable notifications that you can output for each of these activities.
  • The recurring activities phase comprises associated activities that are required periodically. These are firmly booking events, locking and unlocking events, canceling and following up events.


Each of the processes is supplemented by appropriate reporting options.


The Learning Solution enables access to components in SAP ERP Personnel Development, such as Qualifications (Skills).


The SAP Learning Solution is used by various target groups:


  • Learners, who can trigger and carry out all learning activities in their learning portal. All learning steps are matched and updated with the data in the back-end system.
  • Authors/instructional designers, who create learning objects and structure them into courses (learning nets). The SAP Learning Solution provides the necessary tools. Creating and structuring e-learning content is different from creating classroom training material. E-learning requires learning objects that are relatively small, self-contained units. Animations, videos and audio effects are used frequently. Although text can also be used on its own, it is often too uninspiring to sustain thelearner’s interest. Learning content must be well structured in an e-learning environment and deploy a variety of pedagogical approaches to have the most effect.
  • Training administrators manage the training catalog in the back-end system; distribute training courses to various target groups, and access reports to evaluate training processes and data.
  • Instructors can use reports to obtain information on the courses they have to teach.  They can view participant lists, appraisals, and so on.
  • Managers can monitor their employees’ training process via an SAP Workflow.  The SAP Learning Solution provides a standard workflow that can be activated on booking of training courses of any type. In addition, it provides managers with a number of reports on their employees’ learning activities and progress.


As a personal development instrument, Performance Management enables you to rate employees in a formalized, standardized way on the basis of predefined criteria.


The creation of Appraisal Systems provides you with support when planning, holding, and evaluating appraisals. An appraisal system is a self-contained process that enables you to perform formalized and standardized employee evaluations in a business context using one or more templates (appraisal templates). The process ensures the highest degree of objectivity.


As well as in Personal Development, Performance Management is also used in the Learning Solution.  You can map the following appraisal systems, for example:


  • 360° feedback appraisals: Appraisals that draw on diverse sources (supervisor, peers, and self-appraisals)
  • Performance appraisals: Appraisal of an individual employee
  • Surveys and questionnaires: Employee opinion polls, for example


Remuneration Adjustments


The Enterprise Compensation Management component controls and administers your Organization’s compensation policies.


Enterprise Compensation Management comprises several areas:


  • You can perform job pricing in Enterprise Compensation Management.  You can save the results of external job evaluation systems and salary surveys. You can use these results to generate salary structures that you can then assign to the jobs and positions in your organization.
  • Budgeting is used to plan and control how much is spent on compensation adjustments. Budgets are assigned to organizational units.
  • Compensation administration is used to distribute salary increases, shares, and so on, to individual employees in accordance with remuneration policy at the enterprise. This compensation adjustment is displayed on this slide.
  • You can manage long-term incentives (awards).


Broadly speaking, payroll is the calculation of payment for work performed by each employee. More specifically, however, payroll comprises a number of work processes, including the generation of payroll results and remuneration statements, bank transfers and check payments.


This includes a number of additional subsequent activities, for example:


  • Transfer of payroll results to Accounting
  • Data medium exchange
  • Other evaluations, for example, the payroll account or payroll journal


Personnel Cost Planning and Simulation is based on a broad data basis and is integrated with other applications. This ensures that business processes are supported across departments.


You can obtain the payment information, which you use to create personnel cost plans, from different sources. These include basic payments, payroll results, simulated reclassifications, recurring payments and deductions, and one-time payments.  You can also use the planned remuneration data for positions/jobs for planning. You can also use average calculations.


Managers have the option of making other adjustments to the plan. A Web-based front end is made available for this purpose.


Generated cost plans can be extracted to the SAP Business Information Warehouse (BI) for analysis.


After a plan has been released, the data can be used in SAP HCM:


  • To create salary budgets for Compensation Management
  • To create training budgets for Training and Event Management
  • To transfer planning data to Controlling




The various departments in your enterprise must regularly perform reporting. They do so using the different reporting options offered in the SAP system.


  • You can access standard reports from the SAP Easy Access Menu or using general report selection.
  • The Human Resources Information System (HIS) makes it easy for you to request and start all HCM reports within Structural Graphics.
  • Manager’s Desktop is a tool specifically for managers in which they can evaluate and change data.
  • Ad-Hoc-Query enables you to create reports flexibly. Although it is called InfoSet Query in other SAP system components, it remains Ad Hoc Query within Human Capital Management.
  • The Business Warehouse is an independent system in which analyses can be performed. SAP delivers business data in the form of Business Content.



To learn more about SAP Human Capital Management, I recommend you review the training courses defined in the various HCM Learning Maps provided by SAP Education North America:


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