HR Audit: "The Things That Get Measured Gets Managed"
HR Audit: "The Things That Get Measured Gets Managed"
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Agenda
1. Introduction 14. General Auditing Method
2. Challenges For H.R. 15. Methods Of Hr Audit
Department Eight Challenges 16. Research Approaches To Audits
3. Meaning & Purpose Of Hr 17. Hrm Auditing Process
Audit
4. Purposes Of Hrm Auditing
5. Objectives Of Hr Audit
6. Benefits Of HR Audit
7. Frequency Of HR Audit
8. The Principles Of Effective Hrm
Auditing
9. Types Of HR Audits
10. The Scope Of Human Resource
Audits
11. Hrm Audit Measures
12. HR Standards
13. Task Auditor
INTRODUCTION
• “How does a firm know if its human resource practices have an impact on
business results?
• “..the starting point for enterprises wishing to manage their human capital
successfully and seeking a labour competitive advantage is activities of the
HR department.”
CHALLENGES FOR
H.R. DEPARTMENT
EIGHT CHALLENGES IDENTIFIED
BY DAVE ULRICH (1997)
Globalization
The H.R department will need to create models and processes
for achieving global activeness, effectiveness and competitiveness.
Managing the Value Chain for Business Competitiveness
Innovation
Faster Decision Making
Price or Value Advantage
Effective linking with Suppliers
Growth of the organization By increasing customer,
acquisition and mergers
Building organizational capabilities
Reviewing existing capabilities
New capabilities
Aligning new capabilities with business
strategies.
Managing Change
• Adopting some
new H.R.
Practices
• Learning some
New Skills and
Attitudes
• Unlearning some
existing skills and
Attitudes.
Making Technology viable
Finding out ways and
means to make technology
successful.
Attracting and Retaining Intellectual Capital
• Attracting Talented People.
• Retaining them.
• Utilizing them suitably.
Transforming the Organization
Creating fundamental and lasting changes.
MEANING OF HR AUDIT
The Human Resources (HR) Audit is a process of examining policies,
procedures, documentation, systems, and practices with respect to
an organization’s HR functions.
The audit works best when the focus is on analyzing and improving the
HR function in the organization.
PURPOSES OF HRM AUDITING
• Value – strategic (roi);
operational (effectiveness);
administrative (efficiency) and
resource optimization
(economical)
HRIS
Performance
Management Recruitment
and evaluation
Resourcing Documentation
Training, &
Safety Development
Employee Compensation
Relations and Benefits
Welfare
systems Health
The Scope of Human
Resource Audits
• Audit of Corporate Strategy
The organization is going to gain competitive advantage.
• Labor-ManagementRelations :
Legal compliance,
management rights, dispute
resolution problems.
• HumanResource Controls :
employee communications,
discipline procedures, change
and development procedures
Audit of Managerial Compliance
• Strategic HR Management
• Talent Management
• HR Risk Management
• Workforce Planning
• Learning & Development
• Performance Management
• Reward
• Employee Wellness
• Employment Relations
Management
• Organization Development
• HR Service Delivery
• HR Technology
• HR Measurement
Tasks of Auditors
• Identify who is responsible
for each activity.
• Determine the objectives
sought by each activity.
• Review the policies and
procedures used to achieve
these activities.
• Prepare a report
commending proper
objectives, policies, and
procedures.
• Develop an action plan to
correct errors in each
activity.
• Follow up the action plan to
see if it solved the problems
found through the audit.
GENERAL AUDITING METHOD
WORKSHOP METHOD
QUESTIONNAIRE METHOD
OBSERVATION
Analysis of secondary data can give an insight into the HRD assets and
liabilities of the company.
Analysis of age profiles of the employees, analysis of the training
attended, analysis of the minutes of the meetings held etc., help in
determining the assets and liabilities.
ANALYSIS OF REPORTS,RECORDS, MANUALS
AND OTHER PUBLISHED LITERATURE
Published literature of the
company including annual
reports, marked hand-outs,
training calendar personnel
manual, and various circulars
issued from time to time are also
likely to help immensely in
assessing the strengths and
weaknesses of HRD.
HRM AUDITING PROCESS
• PHASE 1: FOUNDATIONAL/INITIATION
• PHASE 2: ASSESSMENT
• GENERAL COMMENTS
• DEVELOPING A CHECKLIST
• REPORT PREPARATION
• REPORT PRESENTATION