The organizational structure of human resources

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The organizational structure of human resources
Companies structure human resources to best meet business needs. (business people image by jaddingt from

Human resources (HR) no longer mirrors its “personnel department” roots. How it appears on an organisation chart varies by type of company. How it functions reflects the growing emphasis on what “HR Magazine” calls the “strategic business” role of human resources.

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Company Types

David Ulrich, PhD, an authority on human resources organisation, views HR “as a business within a business,” adding that HR organisations should be structured like their companies. A single business would rely on a centralised HR department, with HR generalists at any off-site manufacturing facilities. A decentralised approach to HR best serves the holding company where each of its independent businesses has a dedicated HR department. The HR organizational structure in diversified, and multinational corporations use the “business partner model”—a hybrid format that provides economies of scale from centralisation and flexibility to react to market conditions.

Business Partner

The business partner HR structure includes the “back of the office,” a service centre charged with administrative functions such as payroll and benefits. Centers of excellence handle employee relations, training, recruiting and staffing responsibilities. Both assist the “front of the office” business partners. A business partner’s job resembles that of an account manager. Business partners participate in strategy development for an assigned business and share responsibility for its overall performance.

Solution Centers

A newer form of HR organizational structure, the solution centre model, transforms HR into a consultancy for the company. This structure uses small centres of excellence based on business complexity rather than company size. Teams of functional experts called field staff distinguish it from the business partner model. These teams, known as solution centres, can report to a business, a geographic division or an HR function on the organisation chart (e.g., training, recruitment, compensation). Solution centres offer more flexibility to react to opportunities and challenges than the business partner model.

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