Human Capital Management in Dynamics AX 2012

Human resource management in Dynamics AX 2012 is still a little explored field and you will not find many blog posts that will cater specifically to the HCM and Payroll modules in Dynamics AX 2012.

If you are looking for an option on how to help your client to manage talent within their organization, this blog post is for you!

Today, many clients are looking for a single solution for their HR problems including talent management. Talent management however, becomes extremely confusing because many HCM applications and resource planning solutions do not provide Talent Management as an option.

If your client is looking for an end to end HCM solution including talent management, Microsoft Dynamics AX 2012 offers a whole pack of features that you can pitch to your client:

Recruitment Module: The HR manager can create an internal project for recruitment, for any sort of job opening. Both internal and external job postings can be managed through the recruitment module, with various types of advertisements to obtain application data. The entire recruitment process can be followed with evaluation of applications, interviews and confirmation of applications.

Competency Management: This area allows definition of specific competency elements, skills, education levels and areas of interest that should typically be part of a job. Based on the hiring process, a certain employee when hired can be compared against these competencies and the hiring or rejection decision can be based on these competencies.

Compensation Plans: Dynamics AX 2012 is extremely flexible in terms of compensation plans. From benefits to earning codes or allowances, and from fixed to variable pay plans, a hiring can be done and specific criteria and pay grades can be assigned in compensation plans.

Performance Evaluations: Goals, KPIs and appraisals all can be managed through the performance evaluation and management module. This module is extremely powerful as it allows the alignment of all employees towards certain goals and KPIs that the organization wants to focus on. Moreover, personal development of employees can be managed as well through personal goals and performance appraisals.

Course Management: Course management is a little explored area even though it can be extremely useful. In course management, the organization can keep track of and manage courses and trainings that employees can take. Arrangements, attendance and conclusion, all elements related to courses can be managed through this module.

Next up, we shall explore questionnaire development and management in Microsoft Dynamics AX 2012, which will help you to design an employee performance appraisal form and follow the process for collection of information on the form.

Which elements in HCM are you interested in exploring that we can present you with blog posts on?


About the author

NoorJehan Arif is a relatively senior business analyst who has worked with MS Dynamics CRM 4.0 and 2011 for a few years, analysing, designing and implementing solutions on the client side. Dabbling in AX 2012 at the moment, she aims to work her way through, to learn more ways to help business gain their goals successfully and optimally utilize her MBA degree. Her never ending list of aims also include, among other things, obtaining PMP certification, exploring her areas of interest in Dynamics AX (Supply Chain, Retail and Manufacturing), and finishing up writing and publishing her work of contemporary fiction.


We are exploring possibility of using HRM. To start with is Leave management, there’s not much information on this. Example, how do I setup leave entitlement. As any organisation, different employee gets different number of days to each type of leave depending of his/her position.

I was told this is not possible. Is this true?

Thank you!

    Hello Sudhir!
    Thank you for visiting our blog :)
    Have you tried looking into Benefit Accrual Plans? (Payroll > Setup > Benefits > Benefit Accrual Plans)
    Your request seems to be fulfilled from features out of the box. Let me know if I haven’t understood your query correctly.
    What other features are you looking to explore at this moment?


I can setup and enroll the (Variable compensation plan) to the employee. How does it link to Earning statement for payout?

Any idea?

Thank you.


I’ve setup and managed to enroll the Variable compensation plan to the employee. But how does it works to make the payout? I’m expecting it to happen in Earning statement. But it seem that it only work with Fixed compensation.

Please advise. Thank you.


Hello Nicholas,
With the variable compensation plan, what type of update you are doing for the worker? I have used variable compensation plan for performing the appraisal/ increment and it was performed successfully on the compensation plan and it is reflected in earning pay statement.
Best, Zubair Rasheed


I am trying to create earning statement with only basic salary component , I have created necessary earning code with basic component checked and base definition to base time. When I am trying to create a earning statement after selecting the earning code and updating the quantity , the Rate and amount field will remain unchanged , I tried all possible ways but i am not sure where to set up rate and amount so that once the earning code is selected , it should also automatically get update.

Please advise

    Hello Amit,

    There must be some basic field or setup that seems to be missing. Check if payroll settings within the position are correct. The rate and amount will be picked up from two things: rate from the number of hours you mention on the position and the amount from the compensation plan you set up for the employee/worker.
    Please let me know if this works, if not, we can have a conversation on email to sort it out together :)


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