When Is An HR Department Necessary?

How many employees should a company have before there is a need for an HR Department? As companies grow, there is a need to administer the HR function, but that doesn't necessitate an HR Department. In fact, 30 years experience has shown that until the company has at least 50 employees, that "department" -- really a function -- can consist of or be handled by one person...often much to the dismay of that one person


Historically, what necessitate an HR Department are the functions and responsibilities which no one else either wants or is capable of doing. From recruiting to orienting new employees, from writing job descriptions to tracking attendance, and from instituting and monitoring policies to monitoring benefits, there has been a need for an HR generalist to assist senior management in both establishing a structure to holding down costs of administration. In fact, I have felt for some time that the initial title for the HR person should be "Administrative Manager."


Determine whether or not you need to have an employee handbook or other formal policies and procedures manual to cover everything from establishing the company as an at-will employer to benefits. If a handbook already exists, be certain that it is in compliance with federal and state regulations and that the policies and the way they are written are in the best interests of the company

Who takes care of payroll? There used to be an ongoing fight between HR and accounting as to who gets payroll. I have no idea why anyone would want it and it does belong in accounting more so than in HR but, should the question arise, the answer today is to outsource payroll to a payroll service (or a bank which offers such a service). There are still responsibilities such as informing the payroll service of changes in individual wages or salaries, docking, and final pay, but payroll services are definitely the way to go. They do vary in quality and quantity of services, so you will have to compare. Do not let a payroll service sell you more than what you need...which means that you'll have to some research into what you need

Benefits administration is and should be separate from payroll. Even if you have the best broker in the world (who you only have to monitor on a semiannual basis), there is always internal administration of such packages. Further, you will have the responsibility of being the source for answering questions about all forms and types of insurance, the differences in options, and the cost to employees. One of the ways that HR can contribute to the company is by keeping the costs of benefits down, and this means auditing the policies periodically to be certain that there haven't been increases in premiums either directly or indirectly through a decrease in benefits.

HR has an information function that you should think through. Changes in policies, changes in benefits, even changes in laws must be communicated to all employees. Major changes may call for training such as in harassment a few years back. Major changes in medical insurance benefits (as opposed to unemployment or SDI -- for those in states with SDI) have to be disseminated to all affected employees. Therefore, HR becomes a kind of pass-through in the information cycle




Human Resource Management in Job Evaluation System:




A job evaluation system ensures that management jobs
• Are accurately placed relative to one another in the hierarchy of the Company.
• And are fairly and justly rewarded in relation to one another.
Hay Job Evaluation System has the following to offer:
The Hay Job Evaluation System has been developed over a period of years by a Group of International Consultants known as the Hay Management Services Limited on the basis of their experience as Management Consultants all over the world. By virtue of this it is an International system and has been used by a large number of Corporations all over the world.


Human Resource management in Business practice:

Human resources management comprises several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.
• Workforce planning
• Recruitment (sometimes separated into attraction and selection)
• Induction and Orientation
• Skills management Training and development
• Personnel administration
• Compensation in wage or salary and time management
• Travel management (sometimes assigned to accounting rather than HRM)
• Payroll (sometimes assigned to accounting rather than HRM)
• Employee benefits administration
• Personnel cost planning and Performance appraisal