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If you have various departments like Human Resources, Operations, Marketing, etc. what is the best way to setup Sharepoint to accommodate each department?
Should each department have a subsite of their own?
And, how does one handle shared resources like document libraries?
I.e. each department might have their own subsite, but would still need to share documents across different departments?
It is wise to segregate departments as separate functions. Each department function has their own unique processes. Granted there are times when they may cross. Each department can have their own set of sub sites contained, with unique permissions and content.
You can create shared workspaces. This can be access restricted with the creation of SharePoint groups which could contain members of different departments. I use this with certain projects. My experience is not vast with SharePoint, but you should certainly branch out your corporate functions and utilise the inbuilt security model to meet your requirements.
Is this SP 2013 or SP 2010 ?
Generally, it is cleaner to give each department there own site collection.
But, there is one thing to keep in mind when splitting your departments across different site collections vs keeping them in one. Cross-SPSite query'ing is usually a problem. Everything inside an SPSite is more or less accessible from accross other Subsites, but once you need something from outside the SPSite, you will usually see that it is troublesome.
There are several options for showing data from one site inside another:
You should look up the software limits for Site Collections and figure out if you would need several site collections to accomodate your needs or not.
