HR department is the two-way communication channel between the management and the employees. It has its place in the organization. Not everyone can handle this.
HR policies are reviewed and approved by both Finance and Top Management and are usually designed to benefit both the organization and the employees. Like it or not, wherever money is involved, Finance will have its say and is required as well.
When it comes to reporting structure, there is no harm in HR reporting to Finance from an organizational structure perspective. However, it depends on the persons occupying the HR and Finance Head positions, after all.
As long as things don't get too personal and remain objective-oriented, reporting structure hardly matters.
From United States, Newport Beach
HR policies are reviewed and approved by both Finance and Top Management and are usually designed to benefit both the organization and the employees. Like it or not, wherever money is involved, Finance will have its say and is required as well.
When it comes to reporting structure, there is no harm in HR reporting to Finance from an organizational structure perspective. However, it depends on the persons occupying the HR and Finance Head positions, after all.
As long as things don't get too personal and remain objective-oriented, reporting structure hardly matters.
From United States, Newport Beach
Dear Bipin,
I am glad that you did not hint at HR reporting to Marketing guys. First of all, why should HR report to non-HR people? It is not the hierarchical matrix. HR has to coordinate with the Finance department at the time of approval and posting of payroll with banks, decisions on fixing the % of hikes, allocation of bonuses, approval for motivation cash rewards, printing of certificates, marriage gifts, annual budgeting, and so on.
Each department is a separate entity and one should not dig into the other. Finance people always have an eye on the 'cost factor' and would not easily allow things to happen. What is a must for HR is a waste of expense for Finance. So the basics of coordination itself are blown off. If the Finance man himself happens to head the HR, then he has no escape. You are the boss in your domain, and what would happen if the roles are mixed up? Let me narrate an interesting story.
Three men, a musician, a cook, and a doctor, decided to exchange their job roles. The musician began to boil water in a mud pot to cook rice. The Ayurvedic doctor went out to purchase vegetables. He looked at the vegetables, potato... oh, no... full of gas, brinjal... brings skin scratches, lemon is too acidic, cucumber is watery, yam... not good for arthritis, ... and after analysis, he finally returned home buying nothing.
The cook was trying music with children at home and wanted to see how their voices are cooked for singing. He gave a concoction of various herbs and pastes to strengthen their voices. Finally, the kids were taken ill with the new recipe to their throat.
In the meantime, the rice was boiling in the mud pot. Inspired by the bubbling sound, the musician got into 'thal and jathi'. Out of enthusiasm, he played with the serving stick and tapped the pot. Oh! The pot broke and spilled over the fire.
So the moral of the story is 'everyone has to look into their own domain of work'. Bipin, your idea may hold good for a small-sized company, and if applied to a major setup, it would lead to chaos.
Regards,
Chandru
From India, Madras
41I am glad that you did not hint at HR reporting to Marketing guys. First of all, why should HR report to non-HR people? It is not the hierarchical matrix. HR has to coordinate with the Finance department at the time of approval and posting of payroll with banks, decisions on fixing the % of hikes, allocation of bonuses, approval for motivation cash rewards, printing of certificates, marriage gifts, annual budgeting, and so on.
Each department is a separate entity and one should not dig into the other. Finance people always have an eye on the 'cost factor' and would not easily allow things to happen. What is a must for HR is a waste of expense for Finance. So the basics of coordination itself are blown off. If the Finance man himself happens to head the HR, then he has no escape. You are the boss in your domain, and what would happen if the roles are mixed up? Let me narrate an interesting story.
Three men, a musician, a cook, and a doctor, decided to exchange their job roles. The musician began to boil water in a mud pot to cook rice. The Ayurvedic doctor went out to purchase vegetables. He looked at the vegetables, potato... oh, no... full of gas, brinjal... brings skin scratches, lemon is too acidic, cucumber is watery, yam... not good for arthritis, ... and after analysis, he finally returned home buying nothing.
The cook was trying music with children at home and wanted to see how their voices are cooked for singing. He gave a concoction of various herbs and pastes to strengthen their voices. Finally, the kids were taken ill with the new recipe to their throat.
In the meantime, the rice was boiling in the mud pot. Inspired by the bubbling sound, the musician got into 'thal and jathi'. Out of enthusiasm, he played with the serving stick and tapped the pot. Oh! The pot broke and spilled over the fire.
So the moral of the story is 'everyone has to look into their own domain of work'. Bipin, your idea may hold good for a small-sized company, and if applied to a major setup, it would lead to chaos.
Regards,
Chandru
From India, Madras
Why are we getting into reporting structure? HR and Finance should have good coordination and work as a team. HR cannot report to Finance, and Finance cannot report to HR as both play entirely different roles. However, support and coordination are definitely required from both departments.
From India, Hyderabad
From India, Hyderabad
Hi,
We cannot generalize or conclude who should report to whom. It depends on the structure of the organization and also the size. In a smaller organization with a very lean workforce, it is not the department that matters but the person responsible, perhaps a senior in the organization. Our organization is one such with a very small staff of 12 members. In this case, it is not the position or portfolio we hold but the presence of the person in charge who reports to the boss.
From India, Madras
We cannot generalize or conclude who should report to whom. It depends on the structure of the organization and also the size. In a smaller organization with a very lean workforce, it is not the department that matters but the person responsible, perhaps a senior in the organization. Our organization is one such with a very small staff of 12 members. In this case, it is not the position or portfolio we hold but the presence of the person in charge who reports to the boss.
From India, Madras
Dear Mr. Chandru,
I fully agree with your view, but there are many organizations where the HR person has to report to the head of Finance and Admin. For example, a HR Manager reporting to the Head of Finance and Admin.
So, whatever decisions are being made are based on the cost factor. Policies are not employee-friendly, and they are least bothered about employee welfare.
Regards,
Bipin
From India, Calicut
I fully agree with your view, but there are many organizations where the HR person has to report to the head of Finance and Admin. For example, a HR Manager reporting to the Head of Finance and Admin.
So, whatever decisions are being made are based on the cost factor. Policies are not employee-friendly, and they are least bothered about employee welfare.
Regards,
Bipin
From India, Calicut
Hi Bipin,
First of all, I would like to make one thing clear that HR is one of the sub-systems similar to finance that forms the whole organizational system. Both play entirely different roles and are interdependent. Every functional unit has to "coordinate" with the finance department when it comes to financial matters, but that does not mean the functioning of the individual department is directed by the finance department.
If the finance department were to dictate terms, then not only HR, but also marketing, logistics, everyone would have to report to finance, which would shatter the basics of the organization.
As for your example regarding Mr. Ravi, the policies in the organization are prepared keeping the previous policies, their pros and cons, and the organization's viability in mind. Therefore, it has nothing to do with the individual who prepares it and his departmental objectives.
This is my view, and I am open to your critiques.
From India, Bangalore
First of all, I would like to make one thing clear that HR is one of the sub-systems similar to finance that forms the whole organizational system. Both play entirely different roles and are interdependent. Every functional unit has to "coordinate" with the finance department when it comes to financial matters, but that does not mean the functioning of the individual department is directed by the finance department.
If the finance department were to dictate terms, then not only HR, but also marketing, logistics, everyone would have to report to finance, which would shatter the basics of the organization.
As for your example regarding Mr. Ravi, the policies in the organization are prepared keeping the previous policies, their pros and cons, and the organization's viability in mind. Therefore, it has nothing to do with the individual who prepares it and his departmental objectives.
This is my view, and I am open to your critiques.
From India, Bangalore
Dear Mr. Bipin,
Of course, it is a debatable point as far as the reporting part is concerned, i.e., who is to report to whom (especially, should HR report to Finance?). No doubt both HR and Finance of every organization are the responsible departments; therefore, there shouldn't be any clash of egos amongst them at the cost of organizational growth and interest. HR is normally supposed to be involved in every administrative activity being carried out and to be carried out by every department of the organization. On the other side, the Finance department has the authority to interfere when financial interests are involved. For example, in my organization, every month, an HR Report is issued addressing the head of the Finance department, taking into account certain facts and figures available with the HR department for the previous month. Based on the monthly HR Report, the salary statement is prepared and released accordingly on the "Pay Day." Such coordination is absolutely essential for the larger interest of any organization.
Thank you.
Biswajit Pani
Email: bjpani@gmail.com
From India, Bhubaneswar
Of course, it is a debatable point as far as the reporting part is concerned, i.e., who is to report to whom (especially, should HR report to Finance?). No doubt both HR and Finance of every organization are the responsible departments; therefore, there shouldn't be any clash of egos amongst them at the cost of organizational growth and interest. HR is normally supposed to be involved in every administrative activity being carried out and to be carried out by every department of the organization. On the other side, the Finance department has the authority to interfere when financial interests are involved. For example, in my organization, every month, an HR Report is issued addressing the head of the Finance department, taking into account certain facts and figures available with the HR department for the previous month. Based on the monthly HR Report, the salary statement is prepared and released accordingly on the "Pay Day." Such coordination is absolutely essential for the larger interest of any organization.
Thank you.
Biswajit Pani
Email: bjpani@gmail.com
From India, Bhubaneswar
Hi Bipin,
Rather than using a term like "reporting better," we can simplify it by having HR liaise with the Finance team to avoid any feelings of inferiority. However, the main point of contact for all employees will be HR, so it is their responsibility to clarify any queries that employees may have. I see no issue with HR collaborating with the Finance team to resolve any issues.
Cheers,
Amjad
From Australia
Rather than using a term like "reporting better," we can simplify it by having HR liaise with the Finance team to avoid any feelings of inferiority. However, the main point of contact for all employees will be HR, so it is their responsibility to clarify any queries that employees may have. I see no issue with HR collaborating with the Finance team to resolve any issues.
Cheers,
Amjad
From Australia
Dear All,
Below are my observations:
The HR Department cannot function perfectly if there is no Finance department. For example, recruitment costs, induction costs, training costs, and appraisal costs need to be communicated with the Finance department. Therefore, HR must communicate the financial aspect to the finance department.
Thanks,
Soju
From India, Kochi
Below are my observations:
The HR Department cannot function perfectly if there is no Finance department. For example, recruitment costs, induction costs, training costs, and appraisal costs need to be communicated with the Finance department. Therefore, HR must communicate the financial aspect to the finance department.
Thanks,
Soju
From India, Kochi
I think the HR Manager must report to top management but should also coordinate and work closely with finance people regarding expected funds for any recruitment budget or employee benefits. Finance people tend to focus more on monetary matters rather than employee affairs.
Nadine
From Philippines, Makati
Nadine
From Philippines, Makati
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