Organizational structure and HRM
Defining and communicating the human resource terms and definitions used by a company ensures all personnel use the same terminology.
HR professionals help company leaders and their subordinates define an effective, cohesive organizational structure that supports the company in achieving its business goals.
Industry associations, such as the Society for Human Resource Management, publish tips, tools and techniques from which a company can create its own glossary. This helps company leaders communicate with the rest of the company as well.
1. The organizational structure should be set as the result of the HR Management Goals and the defined HR Model.
2. The HR Organization defines clear boundaries around HR Processes. The Compensation and Benefits unit should be clearly about the compensation of employees and building different compensation strategies.
3. Each organizational structure restricts the free flow of information. The clear communication channels should be designed as all HR employees know information significant for their job. Many HR Functions do suffer from the insufficient information.
4. The HR Organizational Structure should be as flat as possible. The decision making responsibility should be given to the lowest levels of the HR Organization.
5. The organizational structure has to be flexible. The priorities of the organization should change quickly and the reaction is needed.
- Horizontal Organization:
In a horizontal organization, only a few layers exist. Instead of a complex hierarchy, most employees report to the same boss. In these types of organizations, work typically gets done by functional project teams. This structure works well for small companies but tends to become unwieldy as the company becomes larger, more diverse and located in more than one location.
- Matrix Organization:
Employees who work in a matrix organization report to more than one manager.
This allows valuable, highly trained resources to support different departments.
Employees who work in this type of structure tend to rely on professional organizations or informal group meetings with people performing similar roles for their own development.
For example, an HR professional may report to both an HR department manager and the finance department manager. They may work exclusively with finance professionals and attend only the finance team meetings, relying on informal communication from his HR peers about industry trends and best practices.
3. Divisional Organisation:
In this case, the organisation is divided into divisions which could be based on the product, Markets or Geographic area. Each division has its own set of functions like finance, marketing etc., like small micro organisations within one large organisation.
4 .Vertical Organization:
In a traditional company structure, each function has its own manager, who reports to the company’s executive leadership. In large companies, this results in multiple layers of managers. Top-level executives makes decisions for the subordinates. Departments tend to function independently and not share resources, tools or techniques. Employees in each department tend to require specialized skills, experience and competency levels.