HR Audit – A Complete Guide

HR Audit – A Complete Guide

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  HR AUDIT –A COMPLETE GUIDE More HR Articles @ Managementguru.net The Essence of Management
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  A small introductionto HRD Human Resource Development (HRD) is the integrated use of training, organizational development, and career development efforts to improve individual, group, and organizational effectiveness. Also See: Social Audit
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  HR Audit HR Auditis like an annual health check-up, it plays a vital role in instilling a sense of confidence in the Management and the HR functions of an organisation. Also See: Critical HR Factors
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  What is HRAudit? HR Audit is a comprehensive evaluation of the entire gamut of HR activities :- 1. HR Cost 2. HRD activities 3. Health, Env. & Safety Legal Compliance 4. Quality 5. Compensation & Benefits
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  Why Conduct anHR Audit? • Routine check-up (uncover any conditions you may have and set up a treatment plan) • Determine how best to align HR operations with organizational goals • Ensure compliance with federal and state regulations • Also See: Career Prospects in Accounting and Finance
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  Purpose behind HRaudits • To make the HR function business-driven. • Change of leadership. • To take stock of things & to improve HRD for expanding,diversifying, & entering into a fast growth phase • For growth & diversification • For promoting professionalism among employees & to switch over to professional Management • To find out the reasons for low productivity & improve HRD strategies. • Dissatisfaction with a particular component. • To become employer of choice
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  1. OPENING MEETING 2.COLLECTING AUDIT EVIDENCE 3. AUDIT FINDINGS 4. CLOSING MEETING 5. AUDIT REPORT How to Conduct HR Audit?
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  What does afull HR Audit comprise ? Legal compliance Compensation/Salary Administration Employment/Recruiting Orientation Terminations Training and Development Employee Relations Files/Record Maintenance/Technology Policies and procedures (including employee handbook)
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  What is HRDAudit? • HRD Audit is a comprehensive evaluation of the existing HRD Structure, Strategies, Systems, Styles, Skills / Competencies & Culture and their appropriateness to achieve the short-term and long-term goals of the organisation.
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  How ?... • InHRD Audit the skills, styles, systems, strategies, structure is studied and analysed using a variety of methodologies like –interviews, (Individual and group, Top Management, Line Managers, HRD Staff, Workmen and others) –questionnaires, –observations, –available records, –workshops etc. • This evaluation helps align the HR processes with business goals.
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  Role of HRDAudit in Business Improvements • Improvements in HRD systems • Increased focus on human resources and human competencies • Better recruitment policies and more professional staff • More planning and more cost effective training • Strengthening accountabilities through appraisal systems and other mechanisms • Also See: Smart Ways to Compensate Employees
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  HRD Score Card •This model assumes that, • Competent and committed employees are needed to provide quality products & services at competitive rates & ways that enhance customer satisfaction • Also See: A Career in Accounting
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  HRD systems maturity •The HRD systems maturity assesses the extent to which various HRD subsystems and tools are well designed & are being implemented 1. The systems should be appropriate and relevant to business goals 2. It should focus on current and future needs of the corporation. 3. The HRD strategies and systems should flow from the corporate strategies
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  4. The systemsshould be well designed and should have a structural maturity. 5.They should be implemented well. • The employees should be taking them seriously implemented well • The employees should be taking them seriously and follow meticulously what has been envisaged in each system. • The overheads of implementation should be low 6. The subsystems should be well integrated and should have internal synergy. 7. They should be adequate and should take care of the HRD requirements of the organisation
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  Subsystems that areassessed: • Manpower planning and recruitment • Performance Management Systems • Feedback and Coaching Mechanisms • Training • Career development and Succession planning • Job-rotation • OD Interventions • HR Information Systems • Worker Development methods and systems • Potential Appraisal and Development
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  Methodology of HRDAudit • Examines long term and short term plans and vision to assess Competency Requirements • Identifies broad Competency requirements for future Business Goals • Examines the existing HRD strategies, systems and practices and assess their appropriateness to have the required competencies
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  Methodology of HRDAudit • Examines the adequacies and inadequacies of HRD structure, staff and their competencies, line managers and their attitudes, top management and their support, unions and their role in competence building for future • Suggests mechanisms for improving all these in the business context
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  Methodology Adopted • Interviews –Individual and group – Top Management – Line Managers – HRD Staff – Workmen and others • Questionnaires • Observation • Analysis of records and secondary data
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  Methodology • Workshops couldbe used • Task forces and internal teams could also be used • External Auditors have a significant role • Benchmarking of questionnaire data may be of use
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  Reasons for HRDAudit • For expanding, diversifying and entering into a fast growth phase. • For promoting more professionalism and professional management. • Bench-marking for improving HRD practices. • Growth and diversification • Dissatisfaction with any component • Change of leadership
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  Role of HRDAudit in Business Improvements • HRD audit is cost effective • It can give many insights into a company's affairs. • It could get the top management to think in terms of strategic and long term business plans. • Changes in the styles of top management • Role clarity of HRD Department and the role of line managers in HRD
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  Role of HRDAudit in Business Improvements • Improvements in HRD systems • Increased focus on human resources and human competencies • Better recruitment policies and more professional staff • More planning and more cost effective training • Strengthening accountabilities through appraisal systems and other mechanisms • Streamlining of other management practices • TQM Interventions
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  Organisations that Havedone HRD Audit • Aditya Birla Group has been doing it for the last 8 years – Rajashree Cement, Vikram Cement, Hindalco, Indo-Gulf Fertilisers, Gwalior Grasim, Harihar Fibres etc. • L&T, Crompton Greaves • Gujarat Guardian • Gujarat Gas • Apollo Tyres • Alexandria Carbon Black
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  Reference • Kelli W.Vito, SPHR, CCP- KV Consulting • Amith.P, Dept MBA, SJBIT • Human Resource – Managementguru • Training & Development – Managementguru • Entrepreneurship – Managementguru