One of the major benefits of an ERP system is the integration of modules. In the case of HR, the payroll, compensation, and expense reimbursement subsystems are inte-grated with the Financial Accounting Subsystem. This saves needless duplication of effort and provides a cost basis for making HR decisions.
◆ SUMMARY
HR management, decision making, and workforce development are among the most strategic areas of focus today. In the past, many human resource management systems have focused upon creating, maintaining, and updating personnel records. This process was so time-consuming that it was difficult to use these data for decision making. With the introduction of comprehensive, integrated ERP systems with HR modules, it is now possible to participate in short-term and long-term workforce development so personnel can be recruited, developed, compensated, and retained to meet overall organizational objectives.
Questions for Discussion
1. Compensation for sales representatives is an important issue in many industries. If compen-sation packages are inadequate, salespeople will move to other firms with more attractive compensation packages. What information can a HR module provide to enable managers to develop compensation strategies to attract and retain successful sales representatives?
Source: Copyright SAP AG.
Featured Article
Please read the following article, “Keep Track of Your Employees,” and answer these questions:
1. What are the benefits of automated time and attendance records?
2. What advantages might accrue to employ-ees using these systems?
Though companies have been squeezing labor costs the past couple of years, many large busi-nesses still do so without a clear picture of their employees’ time, attendance, and skills. Tracking those factors is often done through a hodgepodge of manual processes or legacy applications.
“The time-keeping task has been neglected at many companies,” says Paul Hamerman, an analyst at Forrester Research. “Most have a piecemeal approach of manual or disconnected dumb time-card systems or some automation in some places, but most companies haven’t invested in end-to-end solutions.” Hamerman estimates that only about a third of midsize to large companies have standardized and
automated time and attendance systems. The market for software that provides company-wide automation of time and attendance hit about
$275 million in 2002, with almost 8% growth pre-dicted for this year, Hamerman says. “Any com-pany with a large contingency of hourly employ-ees needs to do this,” he says. Industries such as health care, retail, financial services, manufactur-ing, and hospitality are among prime targets for such systems.
The most obvious benefit from automating time and attendance is the elimination of the time-consuming and error-prone manual process of figuring out time sheets and time cards and relaying that information to a payroll unit.
“Another advantage is better analysis and con-trol over labor allotment, costs, and scheduling,”
Hamerman says.
Banner Health realized those benefits when it recently rolled out Kronos Inc.’s time- and labor-management software. The operator of 19 hospitals, six long-term care centers, and other 2. How can an HR system enable an organization to meet reporting requirements that are
consistent with the following government statutes?
a. Age Discrimination in Employment Act b. Equal Pay Act
c. Family Leave and Medical Act
d. Occupational Safety and Health Act (OSHA) e. Title VII of the Civil Rights Act of 1978 f. Vocational Rehabilitation Act of 1973
3. Collect information about the best practices, which are associated with the HR module within an ERP package. You can do this by (1) conducting research on the web; (2) inter-viewing a user of an HR package; (3) using an on-line database to find an article in a trade publication that describes the effective use of an HR module; or (4) using an HR module within an ERP.
a. What are the best practices which you have discovered?
b. How do they contribute to overall productivity?
c. What information for decision making do they provide?
4. Many organizations purchase the HR module from one ERP vendor (e.g., Peoplesoft) and the Financial Accounting modules from another ERP vendor (e.g., SAP).
a. What do you see as the advantages of this approach?
b. What do you see as the disadvantages of this approach?
5. Turnover among IT professionals has been a big issue for many years. There is a tremendous investment made in training IT professionals, and this is why turnover represents a consid-erable cost. What information will enable the manager to understand turnover and to develop human resources strategies to minimize turnover among IT professionals?
services, including family clinics and home-care services in seven states, has deployed the Kronos Workforce Central application suite to 15,000 employees. It will soon be rolled out to nearly all 26,000 workers, says Kathy Schultz, Banner’s director of application development.
Using Kronos, Banner employees log on for work at badge terminals, the Web, or an interac-tive voice-response phone application. This information goes into Banner’s payroll systems and is available to managers in real time. For example, nursing supervisors can adjust staffing plans based on factors such as which employees have worked overtime or the skills needed for a shift.
It was a culture change that also provided employees with a financial benefit: Those with direct deposit can access their pay a day earlier, Schultz says. Under the old process, Banner’s bank sometimes didn’t get payroll data in time to credit employees’ accounts so that funds were available on payday.
Smurfit-Stone Container Corp.’s stan-dardization of workforce management on
Workbrain Inc.’s Web-based ERM3, an employee-relationship management software system, is part of a larger effort to consolidate systems and processes. The $7.5 billion-a-year container maker also is implementing SAP financial apps and has installed PeopleSoft Inc.
as the standard package for payroll processing.
Smurfit-Stone wants to optimize scheduling and tracking of more than 30,000 employees in the 275 North American facilities of its packag-ing-products manufacturing business. ERM3 interfaces with the PeopleSoft apps, so time and attendance information is sent from ERM3 to PeopleSoft payroll.
While Kronos and Workbrain are leading providers of time and attendance solutions, other vendors include CyberShift Inc. and Stromberg LLC, Forrester’s Hamerman says. Large ERP packages also include time-tracking modules.
SOURCE: Marianne Kolbasuk McGee, “Keep Track of Your Employees,” Information Week, June 30, 2003, p. 59.
References
Ashbaugh, Sam, and Miranda Rowen. 2002.
“Technology for human resources manage-ment: Seven questions and answers.” Public Personnel Management 31: 7–20.
Schultheis, R., and M. Sumner. 1998.
Management Information Systems:
The Manager’s View. Burr Ridge, IL:
McGraw-Hill/Irwin Publishing.