Organization of HR department| what are the factors influencing the HR Team structure

Organization of HR department| what are the factors influencing the HR Team structure

Image by Gerd Altmann from Pixabay 

In our discussion today on organization of an HR department two issues become pertinent. They are:

1.    Place or status of the HR department in the overall setup

2.    Composition of the HR department

Status of the HR department in the overall organization structure depends on

1.  Size of the firm or business: In small start-up organizations where employee strength is around 100, the HR activities are very basic in nature. Perhaps, the functions may include recruitment, salary processing, leave management, statutory compliance, organizing office offsite and other miscellaneous administrative/coordinating activities. Often, the role to handle these activities is bundled with front-desk (reception) or other office admin duties.

HR Department structure: Small organization structure

However, in medium-size firms where employee strength is around 200-500, the HR department functions in a much more structured way. Main HR activities like staffing learning & development, compensation & benefits, appropriate welfare measures and the like are clearly established and responsibilities assigned. Well defined policies, procedures, SOP and HR manual is established, ascertaining who should do what (detailed Job description) and how it should be done. Service level agreements (SLA’s) are defined for HR deliverables and tracked to ensure that business objectives are not compromised. Skill to attract and retain talent, Perfect grievance handling mechanism to manage employee disputes and conducting employee satisfaction survey to monitor employee engagement level etc. Furthermore, among all other typical HR deliverables - proactively controls on cost and related expenses.

On the other hand, in large organizations with an employee headcount of 1000 to 3000, the HR function is highly matured, structured and organized. HR practices are well documented, defined and implemented accurately. Refined HR tools are in place and Technology is leveraged to ensure that HR is contributing to the goal realization. The HR organization structure is more progressive, defining the source of Excellence for each of HR activities.

HR Department structure: Mid-LargeStructure

Further, the multinational organization is where the HR structure functions at its supreme urban level with flawless alignment to business priorities and strategies. In addition to the standard HR deliverables, HR has its own respectable position and is a party to each and every business strategy and decision.

  

2.    Nature of business: Nature of business largely determines the HR department structure. From the tradition of face-to-face handling to the sophistication of Artificial Intelligence and Gamification, thus HR functions travel to the contemporary HR functions today. Surprisingly, a Modern HR function of today has retained a large part of traditional HR activities. Reasons for grievances are still the same and the way to show dissatisfaction too. HR executive were disappeared then and vanished completely now.  However, HR functions were commonly distributed to three categories – HR generalist, HR Specialist and HR heads.

Knowledge-based organizations witness highly sophisticated HR structure due to the high dependence on employee knowledge. As a result, HR roles are clearly bifurcated into:

• Operational HR, also known as HR shared services Centre or HRSSC in short, where transactional activities still prevail.
• Centre of Excellence (COE), where value-added HR activities exist in.

For automation of the entire HR life cycle, Human resource information system (HRIS) is put into place. Besides, with HRIS in-depth analysis are regularly generated and studied to make resource-related decisions.

In service sector, HR team structure is simple and the focus is on transactional people-related activities only. HR team members are only expected to carry out timely hiring, bonding, payroll, benefits administration so on and so forth.

3. Management-philosophy: the philosophy & the mindset of senior management/founders of the organization define the nature of HR functions. The magnitude of significance or importance given to the HR head, the position & the respect allotted to the HR team at the ‘hierarchy’ and the reporting arrangements are all dependent on the attitude of people at the top.  

Image by Gerd Altmann from Pixabay 

4.    Global presence: firms with global existence tend to have fully grown and highly elevated HR structure. Such firms used to have a corporate HR department at Headquarter level and each individual unit possess their own HR team. Headquarter HR department is responsible for the design & formulation of company-wide policy and procedures which eventually bind the units altogether. The HR teams at unit/local levels are supposed to implement corporate HR policies at their respective stations with required amendments as necessary for meeting the local business needs.

Typical HR department structure

So far as the composition of the HR department is concerned, it may be stated that it is majorly dependent on the scale/size of the operation and the approach of the Higher Management. However, a typical HR department is led by a Director, under whom are manager-personnel, manager-Admin, manager-HRD, manager-L&D and manager-IR. 

Nevertheless, such a department may grow in size and importance when new demands are placed on it by the top management.