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Step by Step guide to set up HR Department in an organization

HR Department

This blog is an endeavor to help HR professional, who have just started their career or moved to managerial profile recently and given responsibility of setting up HR department in an organization, which don’t have HR system in place. We will discuss each and every function of HR one by one so that you get the clarity on why a particular function is important and how to implement in your organization.

Broadly HR department can be seen as below mentioned segments and we will discuss each segment more in detail one by one:

  1. HR Operations, formally known as Personnel Department

  2. HRD (Human Resource Development)

  3. Automation/ MIS

  4. Business Partner


As you can see that I have already compared HR Operation segment with function of Personnel Department. HR Department early used to known as Personnel Department. Function of this department was primarily of support, which liaison with government department for statutory compliance, manage attendance and leave, take disciplinary actions, facilitate recruitment, training and more like a clerical job. I am referring it as HR Operation. It is basically a segment where you as HR Professional need to take care of hygiene factors of HR. If HR Operations are not in place then you can not move ahead to HRD. As my earlier boss said it correctly, “It is bread and butter for HR Department”. Hence we need to ensure that these hygiene factors are in place.

These Hygiene factors are as below:

  1. Recruitment

  2. Pre Joining Formalities

  3. Joining Formalities

  4. Ideal Joining Kit

  5. Confirmation Process

  6. Attendance and Leave Mgmt

  7. Disciplinary Actions

  8. Statutory Compliance

  9. Provident Fund

  10. ESI

  11. Gratuity

  12. Bonus etc

  13. Compensation Management

  14. Reimbursement Processing

  15. Insurances

  16. Separation Process

HRD (Human Resource Development)

It is the part of Human Resource department which focuses on ensuring that the biggest asset of an organization which is Human is aligned to business. It addresses human related aspect like performance management, training etc.

Here are some of the areas which we will discuss going forward:

In today fast growing market, every function of organization is on fast track hence HR as function should also be armed with technology hence knowledge and power of automation should be known to you as HR professional. At the same time MIS (Management Information System) also helps you to take informed decision basis data points you gather through various reports.


You as HR professional need to learn, how to be a business partner than a support function. What does a CEO expect from you? How you can contribute to growth of organization? Etc

You need to learn those deliverable which make you integral part of organization and its success story.

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