Home > Subjects > HR > Designing The HR Department Through Decentralized System

Designing The HR Department Through Decentralized System


A perfect HR structure will always much the business structure. There are four approaches to designing the HR Designing The HR Department Through Decentralized Systemdepartment as discussed by Ulrich and Grochowski (2012:137-138) which include the centralized HR, decentralized HR, matrix HR and outsourced HR. A Centralized HR department is where all the available department report to one HR leader. In this case, the functional duties of the HR department are delegated to different HR personnel who at the end submit reports to the Overall leader (Bryant, McCarthy and Smith, 1961). In a decentralized approach, the organization structure is divided into factional business units with the unit or departmental HR heads performing specific functions. In the matrix, approach roles are shared, and the model tries to combine the centralized and decentralized models for it to realize both benefits. Finally, we have the Outsources HR design structure where the human resource services are externally acquired when needed. In this case, the HR department acts as a negotiator for the required human capital needs such skill and talents (Fitz-enz, 2010). For the earlier given scenario as an HR director, I take the decentralized HR approached to design my HR department and draw upon the existing human resource staff resources. In this paper, we will discuss the above decentralized approached in relations to other approaches regarding benefits and disadvantages of hence pointing out clearly why I settled down on the decentralized approach. We will also handle how a decentralized system fosters creativity and innovation.

The Decentralized Approach

Being the HR director of the department we are mandated to lead and manage the entire HR department and its human resource staff. As stated in the description the companies are merging to form a single operational unit but with independent department drawn from the previously existing companies. Each department has newly formed department is already equipped with their director of the HR department. For this reason, I choose the decentralized approach in the designing of our HR department. Decentralization implies the transfer of limited administrative power and responsibility from the overall central administration unit to distinctive units/departments (Pierantoni and Garcia, 2011). In other words, it entails delegating the human resource responsibilities like staff recruitment, compensation, career development, payroll and training to local business unit-heads. The decision is derived from the fact the newly formed business structure is a decentralized one. Hence it is essential to align the departmental structure to the business structure to enable leaders and employees readily understand and agree upon the proposed strategic change.

[sociallocker id=”35370″]

The reason for choosing the Decentralize approaches in designing the HR departments is to offer a quick response to both clients and employees internal and external needs (Pierantoni and Garcia, 2011). In this case decision makers are easily accessible hence there is an ease of eliminating some simple misunderstanding easing the problem querying process which translates quicker means of solving issues. Secondly, in decentralized systems, HR personnel’s are allowed to design, develop and implement employee’s development strategies at the unit level. This is more cost-effective and thorough when it comes to personal skills development. More so it encourages personal relationship frosting personal concern motivating people to offer their best (Torres-Coronas and Arias-Oliva, 2009).

HR Department

The proposed decentralized design incorporates the role of the director which are to plan direct and coordinate all the functions of the HR department then consulting with other executives to serve as a link between my department and the others (Bryant, McCarthy and Smith, 1961).  According to Tremblay and Simard (2017), a medium-size organization should have six units including the recruitment, training and career development, administration compensation and benefits, employee’s welfare, employee’s relation and compliance unit. From the description given it is clear that our department is under skilled and may not meet the standard threshold. However, because it is still small, we can work with the resources available. From what we have the payroll manager is mandated with making updates on payroll recodes and ensuring the necessary paychecks are done. The benefits manager is mandated with employees benefit realization programs such as medical covers, saving and welfare schemes and making comparison what other employers are doing for retention mechanism. With description above the HR director is mandated to make the final independent decision for the department. In this case, the internal departmental units are supposed to collaborate and share information for smooth operation. To ensure this, I would strive to become a change agent, run the department as my businesses, becoming a champion for the employees and talking the administrative role to perfection.

Effective decentralization is supported by leaders with the ability to manage the business on their own. In regards to this, organizations must hire talented individuals for the same hence this fosters spreading of talents across the whole organization. Through an increased one to one contact between employee’s leaders and clients, leaders can carefully study their employees, local market, and the underlying culture.  Therefore they can understand the underlying problems hence innovate solutions and improve the workplace climate of innovation in service delivery.

Lessons about strategies HR leaders can use to encourage innovation, creativity, and knowledge sharing in the HR organization.

It is essential for the HR leaders to know that any organization capacity to grow and succeed highly depends on its ability to create new knowledge and innovate (Adamides and Karacapilidis, 2004). As stated by Hyypiä and Parjanen (2013) knowledge is the most powerful and valuable organization’s asset.   A decentralized organization structure promotes leaders visibility hence encourages creativity, sharing of knowledge and talent promotion. On the key lessons that HR leaders should embrace includes rewarding and recognize employees who perform better and have demonstrated creativity and innovation. In line with this HR leaders should ensure that they hire the most knowledgeable, experience academically fit employees. To get more efforts from the employee’s HR leaders should ensure that the work environment, atmosphere, and trust if upheld between both parties. Finally, transformational leadership qualities should be the lesson the HR leaders should consider. The charismatic, intellectual and individualized consideration of employees found in transformational leaders promotes innovation and knowledge sharing. These type of leader can create and encourage good communication network enabling smooth knowledge sharing activities and promotes knowledge succession plans (Senge, 1990; Slater and Naver, 1995).

Barriers foresaw in implementing of Decentralized HR model

A decentralize HR service delivery model can at times be inefficient especially where the HR leaders appointed to lead the autonomous factional units cannot perform without supervision (Pierantoni and Garcia, 2011). Shortage of skilled staff is another barrier hindering the implementation of a decentralized HR structure. The new structure may require relatively a higher number of technical staff hence. Additionally splitting the whole organization into units comes at an extra cost. Another critical barrier to the implementation of a decentralized service model is changing acceptance. Most of the employees will not be willing comply with the demands of a decentralized approach of service delivery, e.g. subjection to new divisions of power and geographical relocation (Bryant, McCarthy and Smith, 1961).

To counter the above-foreseen barriers the organization should redesign and modify the job descriptions, reporting powers and resource allocation to suit the newly formed structure. Things like the condition of service, prior salary levels, and relocation packages should be in place to help employees cope with the changes.

Strategic Solutions to deal with the foreseen barriers

Defining departmental structure, roles and responsibilities should be done precisely to avoid duplication of roles and conflict in the ruling.  It is also essential to vet the leaders correctly to be appointed to lead the factional units. The leaders must be creative and talented, knowledgeable, experienced and acerbically qualified to perform the duties they are to be bestowed. Additionally, some form of training should be conducted to enlighten and show that their roles extend that of managing employees to that of managing the entire department (Caldwell et al., 2010). It is also essential to monitor the decentralization-related HR concerns and put in place time and resource to solve them to prevent them from becoming major problems (Bryant, McCarthy and Smith, 1961). The monitoring activities I would suggest include equity in staff distribution and access to skill-care. Finally, for a smooth transition to take place, change management strategies should be followed perfectly to ensure that all the risks accompanying the transition are covered (Pierantoni and Garcia, 2011).

Decentralized HR model fostering innovation and creativity within the HR function

In every decentralized HR design structure there is an HR strategy for each department hence this helps in the provision of experimental ground for innovations and implementation of the new strategy. Therefore it spurs the localization of changes hence reduces the risk that comes along with changing circumstance. Decentralization promotes internal policy innovations and breeds and motivates upcoming leaders (Roehling and Wright, 2004). At the departmental level employees, engagement is high, in turn, employees can refine the talent and hopes through the chance they have (Lucie, Hana, and Helena, 2016). We also stated that decentralization improves the interpersonal relations between employees, their leaders, and clients. Therefore the leaders can study their people’s strength and weakness hence creatively capitalizing on their strength.


Decentralization HR model implies the transfer of limited administrative power and responsibility from the overall central administration unit to departments. In other words, it entails delegating the human resource responsibilities like staff recruitment, compensation, career development, payroll and training to local business unit-heads. Unlike other approaches, decentralized approaches permit a department to be autonomous hence provides grounds for testing newly created knowledge and innovation and practice leadership. There are also barriers that hinder the implementation of the approach. In the research article above we have given strategic measure to counter them including proper design and delegation of responsibilities to avoid conflicts

  • Pierantoni, C. and Garcia, A. (2011). Human resources for health and decentralization
  • policy in the Brazilian health system. Human Resources for Health, 9(1).
  • Ulrich D. & Grochowski, J. (2012) From shared services to professional services. Strategic HR Review. 2(3) pp.136-142.
  • Bryant, D., McCarthy, S., and Smith, D. (1961). Centralization and Decentralization In Academic Libraries: A Symposium – Introduction; Centralization and Decentralization at Harvard; Centralization and Decentralization at Cornell; Centralization and Decentralization at Boston. College & Research Libraries, 22(5), pp.327-398.
  • Torres-Coronas, T. and Arias-Oliva, M. (2009). Encyclopedia of human resources information systems. Hershey [Pa.]: Information Science Reference.
  • Schneider, S. (n.d.). National vs. corporate culture.
  • Roehling, M. and Wright, P. (2004). Organizationally Sensible vs. Legal-Centric Responses to the Eroding Employment At-Will Doctrine. Employee Responsibilities and Rights Journal, 16(2), pp.89-103.
  • Fitz-enz, J. (2010). The new HR analytics. New York: AMACOM.
  • Adamides, E., & Karacapilidis, N. (2004). Information technology support for the knowledge and social processes of innovation management. Technovation, 26, 50–59.
  • Hyypiä, M. and Parjanen, S. (2013). Boosting Creativity with Transformational Leadership in Fuzzy Front-end Innovation Processes. Interdisciplinary Journal of Information, Knowledge, and Management, 8, pp.021 – 041.
  • Senge, P., C. Roberts, R. B. Ross, B. J. Smith and A. Kleiner (1994). The Fifth Discipline Fieldbook. New York: Doubleday.
  • Slater, S. F. and J. C. Naver (1995). ‘Market orientation and the learning organization’, Journal of Marketing59 (3), pp. 63–74.
  • Caldwell, C., L. Hayes, P. Bernal and R. Karri: 2010, ‘Ethical Stewardship: The Role of Leadership Behavior and Perceived Trustworthiness’, Journal of Business Ethics 78(1/2), 153–164
  • Lucie, V., Hana, U. and Helena, S. (2016). Strategic talent management in agricultural and forestry companies. Agricultural Economics (Zemědělská ekonomika), 62(No. 8), pp.345-3.
  • Tremblay, M. and Simard, G. (2017). How HR practices, leader behaviors and structure influence OCB beneficiaries to team level ?. Academy of Management Proceedings, 2017(1), p.12994.


Related Posts

Leave a Comment