Why HR Should Never Report to Finance

 When HR reports to finance, policy decisions are primarily finance driven

and are often not employee friendly. They need to consider people for your
organization to succeed. 
 Business leaders need to understand the importance of a happy staff.

 Are good employees praised and bad employees reprimanded? Are bullies
allowed to run rampant 猖獗的 throughout the company?

 Are pay raises done haphazardly 雜亂地? Are employees asked to fill out
multiple forms? Are mandatory sexual harassment training meetings
incredibly boring and counterproductive?

 If any of this is the case, finance is right to disagree with and doubt HR
when they say this next program will fix the organization's problems. When,
however, HR is doing its job, it needs an advocate who understands the
value of spending money now to save money later.
 For example, giving a valued employee a needed raise today, makes them
less likely to quit their job, which saves the organization higher turnover and
training costs.

 Where Should HR Report?
 So, who should HR report to? In an ideal world, the head of HR should report directly to
the CEO. This reporting relationship makes HR part of that senior leadership team that
helps guide and direct company policy. All aspects of employment should be considered
as checks and balances.
 Finance serves a critical role in a company. It's their job to keep costs down and income
high, but having the best people, who are treated well, and paid a competitive salary, is
the way to do that. You need to strike down any barriers that stand in the way of your
people so that the business can succeed. When HR reports to finance, rather than being an
equal with finance, that is extremely difficult.
 Keep your checks and balances in place. HR should never report to finance and
accounting.
HR Has a Strategic Role

Strategically, your head HR person should participate in executive

meetings and share decision making for the corporation. This enables the
HR group to better understand and participate in managing the
business. After all, knowing how to make people happier and more
productive is the key to your business success.

With thorough knowledge of the business, better decisions and

recommendations come from HR. This means that it's absolutely critical
that the head of HR (as well as her staff) understand the business and
can speak the language of the executive team.

When you hire the head of HR, you need someone capable of executive
thought. Your recruiting, retention, training, organization development,
and culture are recommended and formed through a thorough
understanding of your business needs.

Conversely, decisions about the business are made with full

understanding about their impact on people, the culture, and the work
environment. You enable your HR staff to affect your strategic
outcomes. And, this is a positive factor in your business success.

Your HR staff cannot make your company a better place if they don't
understand what's going on in the business. If they don't understand the
overall company goals, and this frequently happens when they get
information second hand, your company won't be as successful as it
could be.

Your people are critical to your success. Make sure the person dedicated
to people reports directly to the CEO.