Whenever the output required involves different fonts, font sizes, positioning of data because of an address envelope, headers and footers, images (logo) or even watermarks, Smartforms provide the solution. In effect Smartforms is the successor of SapScript, which was also about getting your information to look the business on paper.
So only official output via Smartforms? Nope: it is also used in elaborate reporting, where a landscape format with many columns and possible line types are used. Smartform output is effectively produced in an OTF format (like SapScript) which can easily be converted to PDF as well, so our audience can also be reached via an email.
Transaction SMARTFORMS, check out the many many many examples available.
Would this be the only way form output can be implemented ? Nope, it's not. Before Smartforms, there was SapScript (transaction SE71) which is still in use today, although SAP recently announced it will no longer maintain SapScript tooling (8/7/2014). After SmartForms there is the Adobe forms and Adobe interactive forms. The non-interactive version of these forms can be developed on an SAP platform via transaction SFP - SAP Form Builder.
But wait - there is more: specifically for HR there is a transaction HRFORMS which also handles forms. Smartform output can be defined in the HRFORMS transaction, but another output type can also be defined there. The HR form editor (transaction PE51) embodies a form builder tool which answers HR specific needs.