To add your company Departments, go to Company Setup>Organization>Organizational Structure>Departments.

Click Add Department.  The Add Departments box will pop up.  Enter the name of your department and click Add.

Now that you have added your Department, you can assign it to your employees.  Click here for more information.  You can assign a shift to the entire department.  You can also filter by department in the Payroll Generation and Attendance dashboard.