Corporate Structure

Dvanwyk

In my organization HR works for the business manager (one of seven division directors). We are planning a reorganization for this summer. I have had discussions with the Executive Director that HR should report directly to his position because of the confidential nature of HR issues. I'm looking for any additional information why HR should report to the Executive Director.

Margaret Morford

I speak nationally on how to make HR a strategic player in an organization. Critical to that is for HR to report at the highest level, which in your case appears to be the Executive Director. I have listed below several persuasive reasons for this. Use any, or all, to assist you. Good luck and let us know how it turns out.

1. The privacy of the matters you are involved in needs to be handled at the highest level, everything from compensation to sexual harassment. (You already used this one.) You might also offer to take on executive compensation as part of this new reporting structure. This might make the finance person and the Executive Director more ameniable to the change.

2. HR is most likely to be privy to everything that goes on in the company and have an overview of how one department effects another. When HR reports to another functional area, HR is unlikely to challege any practices that go on in that area or present another side of an issue for fear of making their "boss" angry. The Executive Director needs unfettered feedback from the HR side of the business.

2. The fact that you currently have HR reporting to the business area (Finance)that has interests that are somewhat the opposite of those of HR. Because Finance is charged with expense control, it almost always views people and benefits as an expense. That is certainly accurate as salaries and benefits usually represent the largest expense in any organization. HR has an entirely different view, which often gets muffled it it's reporting to Finance. It's counter productive to have those two functions report to one another.

3. When HR reports at the highest level, the Executive Director sends a very clear message to all employees about their importance in the organization. If he/she makes this change, you should draft a memo for his/her signature announcing the change and emphasizing that it is to ensure that the employee interests are uppermost in the Executive Director's mind. Don't squander this employee relations opportunity.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]