CHARTERED INSTITUTE OF PERSONNEL MANAGEMENT SRI LANKA (Inc.
Chartered Qualification in Human Resource Management
Assignment
Level CQHRM
Assignment No. 01
Topic of The Assignment HR Audit [CQHRM-S1]
Index Number STU0000002533
0725569215
ContactNumber
[email protected]
E-mail
200069103208
NIC No.
21st February 2024
Date ofSubmission
For Office Use Only:
1. Final Marks : …………………………..
LATE SUBMISSION
2. Remarks : …………………………..
NO OF DAYS
(To be filled by theExaminer)
Contents
HR AUDIT REPORT .......................................................................................................... 2
Executive summary.............................................................................................................. 3
Background .............................................................................................................................. 3
Methodology Adopted ......................................................................................................... 4
Analysis of information Gathered ...................................................................................... 5
Findings................................................................................................................................. 7
Recommendations .............................................................................................................. 10
References ........................................................................................................................... 14
Page | 1
HR AUDIT REPORT
Prepared for :
ABC Bank
Prepared By: Z.I.O Dissanayake
February 21st, 2024
Page | 2
Executive summary
Despite global competition, ABC Bank, a well-known financial institution in Malaysia,
has grown significantly during the last 20 years. Recent findings, however, point to
areas that the Human Resources division needs to focus on. Key HR activities like Pay
and Benefits, Recruitment & Selection, Training and Development, and Performance
Management all had shortcomings that the HR Audit uncovered. We offer suggestions
to rectify these inadequacies and harmonize HR procedures with the bank's goals and
objectives. The purpose of the HR audit report is to evaluate the bank's different HR
operations and offer suggestions for development. The suggestions made are meant to
improve employee engagement and match HR procedures with company objectives.
The expansion of ABC Bank is evidence of its dedication to its workforce and its
flexibility in responding to shifting market conditions.
Background
ABC Bank, established in 1990, is Malaysia's leading financial institution with 672
branches and 1697 ATMs, aiming to become the top provider of financial solutions in
the country. ABC Bank prioritizes establishing long-lasting relationships with its
customers and has had extraordinary development in spite of its traditional management
approach. But a close review of the bank's HR procedures is required due to the growing
competition from outside competitors. Important HR duties including performance
management, training and development, recruitment and selection, and compensation
and benefits are being closely examined. There are several things to be concerned
about: a lack of systematic training needs identification, poor talent acquisition
techniques, rewards that do not consider motivating variables, and subjective
performance evaluation standards. It is crucial to solve these issues in order to achieve
alignment with the bank's objective of being Malaysia's leading provider of financial
solutions, as each zone employs around 5–6 HR workers. With its headquarters located
in Kuala Lumpur, ABC Bank has made a name for itself as one of Malaysia's top
providers of financial solutions by prioritizing individualized client care and a
dedication to worker welfare.
Page | 3
Methodology Adopted
In order to get information on ABC Bank's present HR procedures, the HR audit
included observations, meetings, questionnaires, and interviews. To find out how
effective these methods were, important stakeholders were contacted, including HR
managers and workers. Document review, interviews, observations, benchmarking,
data analysis, feedback mechanisms, risk assessment, and root cause analysis were all
part of the organized process used for the audit. Examining company policies, HR
manuals, performance evaluation tools, training materials, and hiring criteria were all
part of the first data collection process. To assess current procedures, identify issues,
and pinpoint opportunities for development, in-depth interviews were conducted with
key stakeholders, including HR managers, executives, General Managers of HR zones,
and department heads. To evaluate the actual application of HR policies and
procedures, on-site observations were also conducted at a variety of bank branches and
HR department locations.
In order to evaluate ABC Bank's HR procedures against industry standards and best
practices, a comparative study was conducted. Pay plans, hiring procedures, training
programs, and performance management systems were all examined. To find patterns
and emphasize areas for attention, quantitative data on employee demographics, branch
network, financial performance measures, and HR key performance indicators was
carefully examined. Surveys and employee-led focus groups were among the feedback
tools used to get firsthand accounts and insights about HR procedures, employee
happiness, and areas for development. To identify any risks associated with current HR
practices, such as compliance, talent management, and performance appraisal
procedures, a thorough risk assessment was conducted. In order to enable focused
remediation methods, root cause analysis approaches were utilized to discover the
underlying variables leading to reported difficulties and challenges within each unique
HR function.
Page | 4
Analysis of information Gathered
In order to determine the strengths and weaknesses of the following HR functions
Compensation and Benefits, Recruitment & Selection, Training and Development, and
Performance Management System—the data acquired during the audit was examined.
Recruitment & Selection
Strengths
• Recruiting in the talent needed for expansion.
• Setting in place hiring procedures to deal with a labor shortage.
• Understanding the necessity for talent with competence.
Weaknesses
• Difficulties finding and choosing qualified applicants as a result of a lack
of a strategic plan.
• For consistency and fairness, standardizing hiring procedures across sites is
essential.
Training and Development
Strengths
• The goal of guaranteeing a workforce with the necessary skills is recognized.
• Acknowledgment of the significance of preserving a proficient labor force.
Weaknesses
• results in haphazard programs that might not cover important skill shortages.
• Employee development and organizational expansion may be hampered by an
unstructured training program.
Page | 5
Performance Management System
Strengths
• It is acknowledged that performance assessments should aim to maximize
performance.
• recognition of the objective of performance optimization through evaluations of
performance.
Weaknesses
• A strong dependence on subjective standards may lead to prejudices.
• Inadequate evaluation of personal goals and unclear communication results in a
lack of performance-based awards and recognition.
Compensation and benefits
Strengths
• Complies with regulatory requirements and industry norms
• Oversees compliance and fairness.
• Controls pay, bonuses, and benefits.
Weaknesses
• Employee engagement and performance are impacted by a lack of
motivation.
• A performance-based incentive system should be implemented for efficient
recognition and incentivization.
General Observations
• Possibility of regional variations in HR procedures.
• Considering the size and development prospects of the bank, employee
strength seems inadequate for managing HR responsibilities.
By resolving identified deficiencies and putting the suggested tactics into effect, ABC
Bank chances to succeed in improving its HR procedures, raising employee
engagement and performance, and becoming the premier provider of financial solutions
in Malaysia.
Page | 6
Findings
ABC Bank's HR department needs to focus on and improve certain areas, as revealed
by the information acquired and analyzed.
Here is a thorough breakdown of every function
Recruitment and selection Functions
A number of factors, including its intentions for expansion, ABC Bank will have
difficulty acquiring and onboarding new employees. The bank needs to take a
calculated risk in order to overcome this, which includes putting employer branding,
expediting the hiring process, and using innovative recruitment techniques. Attracting
the suitable talent pool is hampered by the organization's present lack of an initiative-
taking approach. ABC Bank should make investments in employer branding,
implement a variety of sourcing strategies, and shorten the hiring process in order to
enhance its recruitment efforts (Breaugh & Starke, 2000). Initiative-taking sourcing
tactics should be given top priority by HR, along with streamlining the hiring procedure
and guaranteeing a satisfying application process. Effective recruiting and selection
procedures are essential to ABC Bank's long-term success.
Performance management
There are a number of issues with ABC Bank's performance management system, such
as imprecise individual goal communication, arbitrary performance evaluation
standards, and insufficient performance-based incentives. Establishing precise
performance goals, giving frequent feedback, and putting in place an impartial and open
review procedure are all necessary for the bank to enhance performance management.
This will facilitate the efficient recognition and rewarding of worker efforts. In order to
solve these problems, ABC Bank has to develop a performance-based incentives
program, update the performance assessment system to incorporate quantifiable and
objective criteria, and increase the openness and clarity of goal setting and performance
evaluation. Providing regular feedback and ensuring that personal goals are in line with
company objectives may also boost employee engagement and performance.
Employees and the company will both gain from a more efficient and equitable
performance management system as a result of this.
Page | 7
Compensation and Benefits
The motivating component that is essential for employee engagement and retention is
overlooked by ABC Bank's compensation and benefits department, which is primarily
concerned with fulfilling regulatory requirements and industry norms (Armstrong, M.,
& Taylor, S. (2014). The lack of recognition and reward programs that are based on
performance affects employee motivation and might impair corporate effectiveness. In
order to solve this, the bank ought to think about putting in place recognition programs
and performance-based reward systems that link incentives to both individual and
group achievement (Ahmed, 2018). This will encourage staff to meet company
objectives and assist recognize outstanding achievement. Employee retention and
happiness depend on matching pay to performance and offering incentives that push
workers to achieve more.
Training and development function
Although it lacks a systematic method, the training and development function aims to
generate a skilled workforce. The bank should make an investment in thorough training
needs analysis to pinpoint skill shortages and create specialized programs in order to
assure success. Ad hoc training could not cover the particular competencies required
for the success of a company. To support staff growth and improve organizational
capacities, ABC Bank should conduct in-depth studies of its training needs, create
competency-based training programs, and offer continual learning opportunities. To
improve employee performance and abilities, specialized programs should be created
and a systematic method for assessing training requirements should be put in place.
Employee competency and preparedness for changing tasks and responsibilities will be
ensured by doing this. up order to fill up identified skill shortages and encourage
lifelong learning, the bank should also set up a systematic procedure for assessing
training requirements and create customized training plans.
Page | 8
Overall Observation
The HR division of ABC Bank is having difficulties since each zone only has five to
six workers. Given the bank's size and development prospects, this is a fundamental
problem because hiring, training, performance management, and employee relations all
require a sufficient number of employees. In order to guarantee effective operations and
conform to the organization's strategic goals, ABC Bank ought to enhance the structure
of its HR department, augment workforce, and provide resources towards training and
growth. There might be regional variations in HR procedures as a result of the
decentralized management structure, with four General Managers managing distinct
zones. The size of the HR department is also inadequate, meaning that it must be
expanded in order to accommodate hiring, training, performance evaluation, and other
crucial HR responsibilities.
To attract and retain top personnel and fulfill its ambition of being the leading supplier
of financial solutions in Malaysia, ABC Bank has to enhance its HR function, which
includes pay and benefits, recruiting and selection, training and development, and
performance management. Supporting the bank's expansion and corporate objectives
also requires the HR department to invest in sufficient labor and resources. By
addressing these issues, ABC Bank will be able to fulfill its strategic goals and establish
itself as Malaysia's leading supplier of financial solutions.
Page | 9
Recommendations
Recruitment and selection
ABC Bank has developed a strategic recruitment plan that takes growth estimates into
account in an effort to become the leading provider of financial solutions in Malaysia.
Targeted sourcing techniques, talent acquisition programs, competency-based
interviews, psychometric evaluations, and situational judgment tests are all part of this
approach. Forming alliances with academic institutions and trade associations may
provide access to a wide range of talent and improve the employer brand. A
comprehensive hiring approach will be created, leveraging a range of platforms such as
job fairs, social media, and employee recommendations.
To attract and keep top people, the bank must also enhance its HR operations, which
include pay and benefits, hiring and selection, training and development, and
performance monitoring. In order to support the bank's development and organizational
objectives, the HR department must invest in sufficient labor and resources. Fair and
consistent applicant selection will be ensured by the development of a thorough
recruiting strategy and the standardization of recruitment procedures throughout all
zones.
Training and development function
For the objective of identifying significant skill gaps and creating customized training
programs, an organized approach for assessing training needs is necessary. Employee
chances for ongoing learning and development can be facilitated by investing in
technology-enabled learning systems (Wright, 2011). A thorough analysis of training
requirements is conducted to pinpoint areas for improvement and skill shortages within
the company.
Page | 10
A program of technical abilities, soft skills, and leadership development is included in
an organized training curriculum that is implemented according to the career
progression pathways of the personnel. Online learning environments, cross-functional
training sessions, and mentorship programs all promote a culture of ongoing learning
and information exchange. Following the establishment of an organized procedure for
assessing training requirements, customized programs are created to bridge skill gaps
and encourage lifelong learning.
Page | 11
Compensation and Benefits
Through creating a complete incentives program that combines intrinsic and extrinsic
motivators, the company hopes to increase employee satisfaction and engagement.
Regular performance reviews will determine the awarding of bonuses and other
incentives, fostering an environment that values accountability and merit. To maintain
competition, the system will also include doing recurring market surveys.
To maintain market competitiveness, pay packages will be reviewed on a regular basis.
High achievers will be identified by the system and given incentives, which will
increase engagement and motivation. We will hold frequent feedback sessions or
surveys to learn more about the motivating elements of our employees and adjust
rewards appropriately (Perkins, 2017). An evaluation of the present pay, and benefit
plan will be conducted to make sure it complies with all applicable laws and industry
standards.
Performance management
Promoting transparency and simplicity at the start of the performance year by clearly
outlining specific goals and expectations for each employee is crucial to improving
performance management. It is important to establish objective performance evaluation
standards, like SMART objectives, to guarantee consistency and fairness in
evaluations. In order to help employees in their attempts to enhance performance and
promote a culture of continuous development, regular coaching and feedback should
be given. To identify and reward top performers, a performance-based rewards system
should be put in place in addition to a revision of the performance evaluation system
that incorporates quantifiable and objective criteria. Clear, quantifiable goals that are in
line with business objectives should be a part of the performance management
framework (Ganster, 2011).
These goals should cascade down from top-level strategic objectives to specific KPIs.
Managers ought to be trained in goal setting, objective feedback, developmental
coaching, and conducting efficient performance reviews. To support continuous
performance improvement, regular coaching sessions and performance feedback
should be implemented throughout the entire year (Jackson, 2014).
Page | 12
Overall HR departments
The organizational structure of the HR department should be assessed for the best use
of resources and efficiency, taking specialty and job distribution into account. Best
practice platforms, virtual learning sessions, and community forums should all be used
to promote teamwork and information sharing. Continuous improvement and data-
driven decision-making need the use of strong HR analytics and metrics.
With the goal to guarantee compliance with legislation, ABC Bank should establish a
feedback mechanism for HR policies and procedures, conduct routine audits, and
encourage innovation within the HR division. In a cutthroat market, this will boost
employee engagement, fortify HR procedures, and propel organizational achievement.
Frequent evaluations and audits will guarantee adherence to industry best practices and
improve efficacy and efficiency.
The HR audit report from ABC Bank provides a thorough evaluation of the
organization's present HR procedures along with recommendations for enhancements.
By improving the bank's HR department, the report hopes to further the bank's goal of
being Malaysia's leading supplier of financial solutions. The bank may enhance
organizational performance, draw in top talent, and increase employee engagement by
putting the recommendations into practice. According to the report's conclusion,
improving HR procedures will support ABC Bank's growth goals and help it keep its
position as one of Malaysia's top financial institutions.
Page | 13
References
Ahmed, W. (2018). Human Resource Management, 15E (Dessler) Chapter 3 Human
Resource Management Strategy and Analysis. www.academia.edu.
https://www.academia.edu/35968308/Human_Resource_Management_15e_D
essler_Chapter_3_Human_Resource_Management_Strategy_and_Analysis
Armstrong, M., & Taylor, S. (2014). Armstrong’s Handbook of Human Resource
Management Practice (13th ed.). Kogan Page. - Bing. (n.d.). Bing.
Breaugh, J.A. and Starke, M. (2000) Research on Employee Recruitment So Many
Remaining Questions. Journal of Management, 26, 405-434. - References -
Scientific Research Publishing. (n.d.).
Ganster, D. C. (2011). Performance-Based rewards and work stress.
Perkins, S. J. (2017). Wayne Cascio and John Bourdreau. Investing in People: Financial
Impact of Human Resource Initiatives. Upper Saddle River, NJ: FT Press, 2008, 360
pages. Londonmet.
Wright, P. (2011). Exploring human capital: putting ‘human’ back into strategic human
resource management. Sc.
Jackson, S. (2014). An aspirational framework for strategic human resource management.
https://www.semanticscholar.org/paper/An-Aspirational-Framework-for-Strategic-
Human-Jackson-Schuler/fc241421bd55b9cdac24748bdd1ee5d6359b837a
Page | 14
