Human Resource Business Process: Acquiring and Paying for Employee Labor

1. Chapter 12 The Human Resource Business Process

2. Chapter Learning Objectives • Identify the activities and documents common to most human resource business processes • Explain the various components of the REA ontology in the human resource process • Create a REA business process level model for an enterprise’s human resource process • Identify common information needs that exist within the human resource process • Create database queries to retrieve human resource process information from a relational database

3. Human Resource Business Process • Scope • Activities associated with acquiring and paying for employee labor, skills, and knowledge • Consists of two functions • Personnel function recruits, hires, trains, evaluates, and terminates employees • Acquires and “maintains” labor, knowledge, and skills • Payroll function pays employees • Pays for labor, knowledge, and skills

4. Payroll Cycle in the Value System

5. Payroll Cycle in the Value Chain

6. Payroll Cycle Business Process Level

7. Payroll Cycle Resources • Labor • Labor type usually substitutes for actual labor due to the intangible nature of labor • Attributes captured usually include a labor type identifier, a description of the labor type, a standard cost per unit of the labor type • May also include relationship to skill to indicate what skills are necessary for a type of labor

8. Payroll Cycle Resources • Cash • Cash accounts usually substitute for actual cash due to measurement constraints • Cash for the payroll cycle is usually stored in either a regular checking account or in an imprest checking account • Attributes captured typically include cash account number, type of account, location of account, and the dollar balance of cash in the account

9. Payroll Cycle Events • Labor Requisition • An instigation event that identifies the need for and requests the acquisition of employee labor, skills, and knowledge • May be documented in various ways, including verbal communication or memorandum • Data that should be captured include date of request, date labor needed, “quantity” of labor needed, identity of the requestor, identity of any specific employee whose labor is requested • Can be thought of as a schedule “shell” that although type and “quantity” of labor needed have been identified, it has not yet been filled in with specific employees who have agreed to the proposed schedule

10. Staffing Plan (documents Labor Requisition)

11. Relational Tables Encompassing Labor Requisition Event

12. Payroll Cycle Events • Employee Schedule • A commitment event that specifies the agreement between the enterprise and an employee for the exchange of labor for cash • May be specific as to when, where, and for how long the employee will work • May be specific only as to the end result of the employee’s labor and when it is due • Data that should be captured include date of schedule, details of commitment, identity of employee from whom labor is to be acquired and identity of supervisor responsible for acquiring the labor • Usually is documented as a detailed schedule, on paper, on a spreadsheet, or as part of an integrated enterprise software package

13. Labor Schedule

14. Relational Tables Encompassing Labor Schedule Event

15. Relational Tables Encompassing Labor Schedule Event

16. Payroll Cycle Events • Labor Acquisition • An economic increment event that identifies the provision of labor by an employee to the enterprise • Data that should be captured include date of acquisition (if time card covers multiple days, may have a start date and end date), quantity of labor acquired (e.g. number of hours or number of pieces produced), identity of employee from whom labor was acquired, identity of supervisor responsible for acquiring the labor • Usually is documented by a time card or other reporting mechanism with similar information

17. Timecard (documents labor acquisition)

18. Relational Tables Encompassing Labor Acquisition Event

19. Payroll Cycle Events • Cash Disbursement • An economic decrement event that represents the distribution of cash to the employee from whom labor was acquired • Data that should be captured include date of paycheck, time card or pay period for which payment applies, gross pay amount, amounts of and reasons for any withholdings, net pay amount, identity of employee to whom paycheck is written, identify of employee who prepared and/or signed paycheck • Usually is documented by a paycheck or a direct deposit notification

20. Employee Pay: Direct Deposit Notification

21. Relational Tables Encompassing Cash Disbursement Event

22. Payroll Cycle Events • What about other activities in the payroll cycle such as recruiting, hiring, and training employees? • Recruiting (Employment Offer) • A “general” instigation event • Initiates labor acquisition in a general sense; specifics are not yet determined • Hiring (Employment Agreement) • A “general” commitment event • Commits enterprise to labor acquisition and payment in a general sense; specifics are often not yet determined • Training (Skill Acquisition) • An economic increment event in which the human capital resource is increased • Enterprise doesn’t “own” the skills; however, better employees’ skills typically benefit enterprises

23. Payroll Cycle Agents • Employee • external agent – involved in instigation and commitment events and in economic events • Personnel Representative • internal – represents the company’s side for the “initial” or “general” instigation and commitment events • Supervisor • internal – represents the company’s interest in the “ongoing” or “specific” instigation, commitment, and economic events • Payroll Clerk • internal – often involved in cash disbursements

24. Resource Query Types • Detailed status information at one or more points in time for each resource instance • Detailed status information at one or more points in time for only those resource instances meeting specified criteria • Summarized status information at one or more points in time for all resource instances • Summarized status information at one or more points in time for only those resource instances meeting specified criteria

25. Payroll Cycle Resource Queries • What are descriptions for all labor types for an enterprise? • Display all fields of Labor Type table • Which labor types have standard hourly wage rates less than $10? • Display labor type description field from Labor Type table; enter <10 as criterion in the StdHourlyWageRate field • Does the enterprise own any imprest cash accounts? • Display the cash account ID from Cash table; enter LIKE *imprest* in the AccountType field • What is the average standard hourly wage rate for all labor types? • Display the AVG aggregation function to the standard hourly wage field in the Labor Type table

26. Identify labor types with standard hourly wage rates less than $10

27. Event Query Types • Detailed information about each event instance • e.g., what happened, when and where did it happen, etc. • Detailed information about each event instance that meets specified criteria • e.g. events of a specified type that occurred during a specified time period or that occurred at a specified location • Summarized information for all instances of an event type for a specified time period • e.g. total of the event instances during a specified time period • Summarized information for only those instances of an event type for a specified time period that meet specified criteria • e.g. average dollar value of the event instances for a specified location during a specified time period

28. Payroll Cycle Event Queries • What is the maximum budget amount for a specific labor requisition? • When was a specific labor schedule approved? • How many days of labor are included on a specific labor acquisition? • How many cash disbursements were made on a specific date? • What is the dollar value of wages expense for a specific time period?

29. Calculate Wages Expense for April, 2010

30. Agent Query Types • Detailed status information at one or more points in time for each employee • Detailed status information at one or more points in time for each employee who meets specific criteria • Summarized status information at one or more points in time for all employees • Summarized status information at one or more points in time for all employees who meet specific criteria

31. Payroll Cycle Agent Queries • What are the names and positions of the employees who have been rated as excellent? • What is the average wage of the data entry employees? • What are the names and birth dates employees who were born in 1960 or earlier?

32. Calculate average wage rate of data entry employees

33. Duality Query Types • Calculation of outstanding wages payable balance at a point in time • Identification of the labor acquisition for which a cash disbursement was made • Identification of cash advances made to employees • Identification and calculation of amounts withheld from gross pay amounts for employee and employer payroll-related taxes

34. Payroll Cycle Duality Queries • Has a specific labor acquisition been paid for as of a specific date? • What total dollar amount was withheld from payroll checks during a specific time period? • What is the balance of wages payable as of a specific date?

35. Total Withholdings Amount for April 2010

36. Stockflow Query Types • Which resource was affected by an economic event • E.g. which cash account was decreased by a cash disbursement • What is the total dollar amount of the effect of an economic event on a resource? • E.g. by what amount did a cash disbursement decrease a cash account • What quantity of a resource was affected by an economic event? • E.g. what quantity of each labor type was acquired by a labor acquisition event • How many different resource types were affected by an economic event • E.g. how many different labor types were acquired by a labor acquisition event

37. How many different types of labor were acquired on TC49?

38. Fulfillment Query Types • Identify unfulfilled commitment events • E.g. schedules for which work has not yet been performed, requisitions for which schedules have not yet been approved • Identify filled commitment events • E.g. schedules for which labor was acquired, requisitions that have been scheduled • Identify economic events for which commitments were not made • E.g. unscheduled labor acquisitions • Identify results of commitment events • E.g. which labor acquisitions resulted from a specific labor schedule; were there any discrepancies between the schedule and the actual acquisition?

39. Have any labor requisitions not yet been scheduled?

40. Reservation Query Types • What type of resource is a commitment agreeing to increase or decrease? • E.g. what labor types is a labor schedule agreeing to acquire • What quantity of a resource is a commitment agreeing to increase or decrease? • E.g. how many hours of a labor type is a labor schedule committing to acquire • What dollar value of resources is a commitment agreeing to increase or decrease? • E.g. what is the dollar value of cash reserved by a labor schedule? • When is a commitment agreeing to increase or decrease a resource? • E.g. on what dates is a labor schedule committing to acquire a specific labor type

41. How many hours of cashier duties does labor schedule LS7 commit to acquire?

42. Participation Query Types • Which agent authorized an event? • E.g. which supervisor authorized a specific labor requisition • With how many events is a specific agent associated? • E.g. by how many labor schedules has an employee been scheduled to work • E.g. how many labor schedules has a supervisor authorized • To what extent has a specific agent been involved in an event? • E.g. how many hours did an employee work on a labor acquisition • Which agent executed an event? • E.g. which payroll clerk issued a specific cash disbursement

43. What are the names of the employees who were scheduled on LS7?

44. What are the names of the employees who were scheduled on LS7?

45. Summary • We discussed the human resource process and how it fits in at the value system and value chain levels • We discussed the extended REA pattern at the business process level • We examined documents typically used to represent events and discussed related resources and agents • We examined examples of relational database tables for the payroll cycle and discussed data input into those tables • We systematically discussed types of queries for the payroll process to support decision-makers in various functional areas • We provided selected examples of queries of various types

46. Chapter 12 End of Chapter