Describing Human Capital Management Structures

The three structures in HCM are:

• Enterprise structure
• Personnel structure
• Organizational structure

The allocation of employees to the structures in their enterprise is of the utmost importance in Human Resources. In a Personnel Action, the first step is to enter the data for these three structures in IT0001 Organizational Assignment.

The employee is assigned, for example, to a company code, a personnel area, and a personnel sub area. You also assign employees to positions, which results in the employee's assignment to an organizational unit, a job, and a cost center.

An employee group is a general division of employees. The group defines the relationship between an employee and a company based on how the employee contributes to the company in terms of work. Active employees, pensioners, and early retirees comprise the main employee groups in personnel administration.

The following are the principal functions of the employee group:

• It can determine the default values for the payroll accounting area or basic pay.
• It is used as a selection criterion for reporting.
• It is one unit of the authorization check.

An employee subgroup is a division of an employee group according to contract conditions. Wage earners, salaried employees, and non–pay scale employees are examples of subgroups within the active employee group. All control features of the personnel structure are defined at the employee subgroup level.

The following features are some of the most important customizing settings for time management and payroll calculation:

• The employee subgroup for the payroll allows you to define different payroll procedures for different employee subgroups. For example, you can specify whether an employee’s pay should be accounted on an hourly or monthly basis.
• When entering data, you can define default values using the employee subgroup, for example, for the payroll accounting area.

The payroll area represents a group of employees used for running payroll. All employees who have their payroll run for them at the same time and for the same period are assigned to the same payroll area.

Payroll accounting is generally performed for each payroll area. The payroll area provides the payroll driver with two pieces of information, the number of employees to be accounted for and the dates of the payroll period. The number of employees to be accounted is determined using IT0001 Organizational Assignment, which stores the payroll area.

Once you have created a structure using objects and relationships, you can assign additional characteristics to the objects.

Objects consist of three parts:

• Object Infotype – includes the ID number, a short and long text, and the validity period.
• Relationship Infotype – contains the relationship(s) between this and other objects.
• Other Infotypes – contains the object characteristics, for example Account Assignment.

All data for an object (existence, relationships, and additional characteristics) is created in the form of infotypes. You define particular characteristics for an object in each infotype.

Not all infotypes are absolutely necessary. Some infotypes can be maintained for all object types, for example, the object and relationship infotypes. Others are only relevant for particular object types, such as the vacancy infotype, which is only relevant for positions.

Organizational units describe the various business units that exist in your company.

Organizational units can be classified generally (for example, by function or by region) or specifically (for example, by project group). The way in which organizational units for your company are classified depends on how your company is structured.

You must relate organizational units with one another in an organizational plan. The hierarchical relationships that exist between the organizational units represent the organizational structure of your enterprise. Organizational units can be linked to cost centers from Accounting.

Jobs are general classifications of tasks that are performed by employees. Each job represents a unique classification of responsibilities in your organization. When you create jobs templates, you should consider what specific tasks and requirements are associated with individual positions.

The job template is used to define the specific positions, with the positions inheriting the job characteristics.

Jobs can be used in other HR components, for example:

• Shift Planning
• Personnel Cost Planning
• Personnel Development

Positions are individual employee assignments. Positions are held by employees.

Multiple positions can be based on one job. After you create a job, you must specify the number of corresponding positions required in the company. A position inherits a job's tasks; however, you can also define additional tasks that refer specifically to one position. Positions can be completely filled, partially filled, or vacant.

As a rule, each position represents one employee. However, a position can be occupied by more than one employee, each working less than full time. For example, one employee can hold 60% and another employee 40% of a position.

Cost centers can be assigned to organizational units and positions. Cost center assignments are inherited along the organizational structure and are maintained in Controlling. This hierarchical inheritance can be interrupted, when cost centers are assigned to organizational units or positions at lower levels.

Persons are objects that hold positions within the organizational structure. Persons generally represent employees in your company.

Infotypes for persons are maintained in Personnel Administration and are linked to an organizational plan through their position assignment, for example IT0001 Organizational Assignment, IT0002 Personal Data, IT0007 Planned Working Time.