HR AUDIT

(An Early Evaluation System)

S.Jayaprakash., M.Sc (IT), PGD.HRM, DLL & AL

HR AUDIT - Definition
The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions It means, a systematic assessment of the strengths, limitations, and developmental needs of HR management in the context of organizational performance

HR AUDIT - OBJECTIVES
To analyze and improve the HR functions in the organization. To expose the strengths and weaknesses in the HR function, and any issues need resolution. To evaluate the efficiency and effectiveness of HR functions. To ensure whether the HR function is on the right path to achieve and helping company to achieve its goal / objectives or not.

HR AUDIT - Scope
Audit of all the HR function.
Audit of managerial compliance of personnel Policies, Procedures and Legal provisions.

Audit of corporate strategy regarding HR

Planning, Staffing, IRs, Remuneration and other HR activities. Audit of the HR climate on employee motivation, morale and job satisfaction.

HR AUDIT - Benefits
To improve contribution of the HR function

to the achievement of our business objectives.

To develop the professionalism of our HR people

Reduce the HR cost

Find out the problems and solve them smoothly.

Provides timely legal requirement.

Sound Performance Appraisal Systems. Smooth adoption of the changing mindset.

HR AUDIT - Tools
Interview Document Review Questionnaire Sampling

The Audit should be Proactive Reactive Informative Developmental

HR AUDIT - Nature
An HR audit is a tool for evaluating the personnel activities of an organization. The audit may include one division or an entire company. It gives feedback about the HR functions to operating managers and HR specialists. It also provides feedback about how well managers are meeting their HR duties. In short, the audit is an overall quality control check on HR activities in a division or company and an evaluation of how these activities support the organization's strategy.

HR AUDIT - Approaches
Auditors may adopt any of the five approaches for the purpose of evaluation: Comparative approach Outside authority approach Statistical approach Compliance approach

Management by objective approach.

Contd..,
In the comparative approach, the auditors identify another company as the model. The results of their organization are compared with those of the model company. In the outside authority approach, the auditors use standards set by an outside consultant as benchmark for comparison of own results. In the statistical approach, statistical measures of performance are developed based on the companys existing information.

Contd..,
In the compliance approach, auditors review past actions to determine if those activities comply with legal requirements and company policies and procedures.

The MBO approach creates specific goals against which performance can be measured. Then the audit team researches HR by MBO.

Who should conduct the audit?

The team that is responsible for the audit should represent a crosssection of the organizations staff, including line staff, middle and upper management, and those responsible for HR functions. or you may use an external consultant to
assist.

How it should be conducted?

The audit process consists of a series of questions covering the following primary components of the HR function:
1. Roles and HR information systems (HRIS) 2. Recruitment 3. Documentation 4. Training and development 5. Compensation and benefits 6. Performance management system and evaluation 7. Termination and transition 8. Legal issues and personnel policies 9. Health / Welfare systems 10.Employee Relations and 11. Safety

Contd..,
The main process is to collect information to answer the HR audit questions in each of above categories and all the relevant information. The focus is on how these activities and tasks are actually performed in the organization. The process of getting information, in and of itself, can be quite informative.

How are needed improvements identified?

Once information is gathered, the audit team reviews each major section and notes difference between paper and practice. This can then be compared to best practice (what we should do to best support our organizations mission).

How is follow-up and correction done?

A work plan with a timeline, accountability, and deliverables should be created after the team reviews the completed audit and identifies areas where improvement is needed. Follow-up and review should be a regular management function, performed on an ongoing basis.

Conclusion
The auditors always prepare and submit an audit report to authority of the organization, which may be clean / qualified. The clean report indicates the appreciative of the department's function, but the latter one represents the gaps in performance and therefore contains remarks and remedial measures. HR Audit is very much helpful to face the challenges and to increase the potentiality of the HR personnel in the organization.

WISHING YOU A LONG & REWARDING CAREER !!!

Thank you