The Organizational Structure of a Personnel Department

by Marquis Codjia; Updated September 26, 2017

By drawing up an adequate hierarchical structure in its human resources (HR) department, a company sets itself up for success and helps HR personnel work effectively. The business may sacrifice its short-term standing in sector polls, but top leadership understands that setting a good organizational arrangement is in the company’s best interest, especially with long-term market growth and productivity expansion.

Definition

The organizational structure of a company’s personnel department answers one question: How to hierarchically arrange HR personnel to foster productivity and profitability. The disposition that the business ultimately selects may show that choices of strategic posture, although not carved in stone, draw on regulatory compliance and top leadership’s operating vision -- items that generally apply to the organization’s long-term prognosis. For example, a strategic stance may call for hiring and promoting top-performing salespeople to increase the company’s bottom line. Even if the effort is short term, it might translate into something long term if the business grows its sales, expands its market share and wields increased levels of commercial clout. A typical HR hierarchical structure puts a company’s chief administrative officer at the top, then lists HR department chiefs, functional supervisors and local HR contacts in a descending order. Functional supervisors cover functions such as hiring, learning and development, termination, regulatory compliance and benefits management.

Considerations

For corporate personnel management, setting a proper organizational structure is not just a matter of operational convenience. This practice helps HR department supervisors tie operating objectives with top leadership’s policy goals, enabling them to maintain strategic flexibility under uncertainty. For example, a company’s hierarchical arrangement must be nimble enough to cope with unpredictable or non-routine situations, such as the implementation of new policies and the execution of a company-wide project or long-tern initiative -- say, a corporate merger or acquisition. The right personnel structure enables the business to quickly deploy its resources to make strategic execution a success.

Geography

Companies that fare better in an economic downturn often show operating resilience with respect to profit management, cost control and personnel administration. For a multinational company, the operating equation introduces the notion of local regulatory compliance, an issue that a personnel department’s organizational structure addresses. For example, local HR managers are more likely to know domestic laws, hire personnel in accordance with business legislation and adapt the company’s global strategy to regional ground conditions.

Tools

To create a well-functioning hierarchical structure, HR managers and corporate leadership use tools such as employee performance management software, personnel scheduling programs, process re-engineering software and mainframe computers. Other tools of the trade include calendar and scheduling software, content work flow applications and enterprise resource planning software.

About the Author

Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.