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For the large organizations its not appropriate for HR to report to the finance department in fact that is the serious undermining of HR professional . even for small organizations with highly enriched jobs there is no need for finance department to handle HR issues. it should be noted that when HR issues are coined with finance there is a tendency of undermining HR issues over finance and sometimes i don't have to blame the the finance guys because HR is far beyond their competence. Therefore, I conclude by saying that as organisation becomes complex and larger then the HR issues becomes of more strategic
Those who are in support of HR reporting to or HR working under/with Finance Department, may I ask is it OK to work in reverse way? Which means Finance reports to or work under/with HR? Thanks a lot.
Obviously there are cultural differences, but in the US, HR has evolved away from reporting to finance in larger companies. In many cases, HR acts as a peer to finance leadership reporting into senior executives. Also, payroll is rarely an HR function - it reports to accounting as a general rule.
Regards,
ResnickHR
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Sir you have potrayed finance people as people having no common sense but it is not that way and even a simple person will understand the facts, HR is nothing but skills, HR does not develop employees it just makes employees believe they have been developed.
But in middle east its different, Mostly HR have to report to a Finance and Admin head.
Hi All,
I comment first time in this. Here I am seeing many of you confused with their terms. Reporting and communication.
HR can never report to finance in any grown organization. but the communication goes and if their any bad financial impact, it has to go to higher level(CEO, MD) and discussed in meeting and higher level people will give the final decision after all if there is any discrepancies.
still more their to explain. ...
will join in the next time.
Bye

Hi there,

As per me you are correct HR & Finance / Accounting are two seperate departments, there is no link or point of HR reporting to Finance
HRD is also involved in financial matters of the company but that dosen't means they will report to finance dept..
HR is an innovative dept. where we try to bring new ideas everyday to make a new culture of working by abiding with various rules & regulations, so HR activities are not finance bounded. And if HR will report to finance then finance will try to cost cut on our innovative ideas also
On the other hand HR means employee relations, retention, organizational development, recruitment, staffing, reward management & various other things which finally says communicating with different people all the time. So its an open dept.(open to questions & suggestions) & finance on the other side is a reserve dept.
Though both the depts. have to be very good in keeping the database confidential & secure from other depts. of the organization but the way of working is entirely different
So no ways, HRD should never report to Finance & Accounting
And it should directly report to the Dirtector or CMD of the any company.

Regards,
Shilpi Kakkar
Human Res. Manager

Bipin,
True, I report to the finance, but I also am driven by the director himself. Rightly said, finace thinks from financial prospective only ,I do not agree with Ravi.
Adding to ur example, Leave enchashment, earlier in my company was from year to year, but now with the finance taking over, the policy says, ever person is eligible for leave encashment on his termination from employement . Which means it is all accumlated and not more than 45 days is what is he can enchas at his leaving the organisation.
If I were to frame it , I would have done it other way , may be reducing the number of days, enchasement should be allowed year on year.
regards,
Kavitha.

Dear Ravi,
Policy should be made by the HR people with the discussion of Senior management team of all dept.
Policy cannot be one dept driven. It should be in interest of the all dept. How ever policy should not be confused with service rule or work flow. Both HR & Finance has their own set of rules & regulation to follow. That should be communicated to both the dept. But HR should not report to Finance.
Tapati

Dear All,

I found a great discussion goin on here and would like to add up my points. But let me make you assure that HR v/s Finance is no pont discussing or wrangling here. It depends on the company policy and the parent country framework.

I worked in USA army and currently associated with a MNC which is world's no. 1 in its operation. We recently started our company in India. According to International or I must say Globalisation, HR works under Finance Department. I AM SORRY BUT ITS A FACT. Rather if you see most of the companies listed in Fortune 500, you can observe that they does not have HR department in isolation as specified. Few good comapnies do have but that too is under Finance department. HR Head reports to Finance controller, Reason being very simple that any operation with HR department leads to an additional cost that might and might not have provision for the month/year. Other Departments specially SCM or in Indian context Purchase department usually have their provison set in advance.

Now though, companies started emphasizing HR department as important as Finance but still it will take time to fill up the Gap.

Here, I want to add up that no Department or work is superior than other. Its all like same and an absence of single can lead to a fail of other

Best Regards

Sakshi


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