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  • 1.  What Is Audit? Meaning Of HR Audit. Definitions Of HR Audit. Scope Of HR Audit. Objectives Of HR Audit. Significance Of HR Audit. Benefits Of HR Audit. Needs Of HR Audit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 2
  • 2.  Areas Of HR Audit. Process Of HR Audit Reporting To Results. Conclusion Review Of The Topic. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 3
  • 3. vaghela_manisha13@yahoo.BY: MANISHA VAGHELA com 4
  • 4. vaghela_manisha13@yahoo.BY: MANISHA VAGHELA com 5
  • 5. ➦ Audit is an important test of managerial control. It involves examination and verification of accounts and records. Human Resource Audit implies critical examination and evaluation of policies, programs, and procedures in the area of HRM.➦ It is a periodic review to measure the effectiveness of HRM and to determine the steps required for more effective use of hr. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 6
  • 6. ➦The primary aim of Human Resource Audit is to determine whether the Human Resource policies and practices are consistent with organizational objectives.➦ It also reveals how effectively the Human Resource policies and programmes have been implemented. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 7
  • 7. Definition: It is defined as “ The examination and evaluation of policies, procedures and practices in all phases of a business to achieve the most effective administration of the organization.” An HR Audit is a process to review implementation of your institutions policies and procedures, ensure compliance with employment law, eliminate liabilities, implement best practices and educate your managers. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 8
  • 8.  HR Audit refers to Examination & Evaluation of Polices, Practices & Procedures to detect Effectiveness & Efficiency of HRM and Verify if Mission, Objectives, Polices, Procedures, Programs are chased and expected results achieved. HR Audit also suggest future improvements based on past activities measurement. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 9
  • 9. An HR Audit involves devoting time and resources to taking an intensely objective look at the company’s HR policies, practices, procedures and strategies to protect the company, establish best practices and identify opportunities for improvement. An objective review of the company’s “current state” can help you evaluate whether specific practice areas are adequate, legal and/or effective. The results can provide decision-makers with the information necessary to decide what areas need improvement. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 10
  • 10. Human Resource Audits involve a company’s strategic actionsto take an intensely objective look at its HR policies, proceduresand practices. This type of comprehensive review of thecompany’s current state can help to identify whether specificpractice areas or processes are adequate, legal and/or effective.The results obtained from this review can help to identify gaps inHR practices, and these gaps can then be prioritized for attentionin an effort to minimize lawsuits and/or regulatory violations, aswell as to achieve and maintain world-class competitiveness in key HR practice areas. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 11
  • 11. ➼ Auditing Human Resource policies: HR policies are broad statements of what should be donein the area of HRM. The policy audit attempts to judge thecoverage of HR policies. It analysis the process of: Policy formulation, Policy communication, Policy change. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 12
  • 12.  The scope of personnel audit is very wide. It also involves in the practice  Recruiting  Hiring  Retaining  Firing the employees. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 13
  • 13. Objectives:• To review the whole organizational system of Human Resources practices, i.e. acquiring, Developing, allocating and utilizing human resources in the organization.• To evaluate the effectiveness of various personnel policies and practices.• To identify shortcomings in the implementation of human resource practices in the organization. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 14
  • 14. • To seek explanations and information, i.e. to get answers to such questions as: “why did it happened”? and “what happened”?• To modify the existing Human Resource practices to meet the challenges of Human Resource Management.• To evaluate the personnel staff and employees. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 15
  • 15.  There is no legal obligation to carry out HR Audit. But unlighted employers voluntarily use it as a tool for evaluation and control of HR Function. Evaluation and critical review of HR Function is no less important than that of accounting and finance function. HR audit is used widely to check the organization performance in the management of Human Resources. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 16
  • 16. According to Yoder, the need for Personnel Audit is largely influenced by several conditions, some of these are:① The number of employees: In a very small units, and because of the very smallnumber of persons the employees requires comparativelylittle in the way of a formal audit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 17
  • 17. ② Organizational Structure: Continuing feedback is facilitated if an organization has a personnel department.③ Communication and Feedback: An effective two-way communication system oftenreduces the need for a formal audit.④ Location and dispersion: The need for a formal audit is directly related to thenumber of isolated plants. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 18
  • 18. ⑤ Status of an industrial relations manager: If the participates in top managementplans, reports, discussions and decisions, the need for aformal audit may be less frequently felt.⑤ Administrative style: The greater the delegation of authority anddecentralization of power, the greater the value of a regularand formal audit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 19
  • 19.  A through analysis is able to pinpoint what needs to be improved. Paperwork is evaluated to ensure accurate recordkeeping. This is something that is important to both current and former employees. Those who make decisions within the Human Resource Department can see where improvements must be made. The overall design and structure of the business can be evaluated so that it can be improved for better functioning. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 20
  • 20.  HR Managers are better able to evaluate the positions within the business and see who needs to be promoted, who doesn’t, and what needs to be done staff- wise that will improve the business. Legal compliance can be determined. It is very important that the business complies with everything legally. If not, then those improvements can be made. Employee morale can be kept up and so job can be satisfied. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 21
  • 21.  The business can improve its reputation. Satisfied employees will talk about how great their job is. Satisfied employees also do a much better job at their job. When they do this, customer satisfaction increases and the company can make a better profit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 22
  • 22.  Audit of :i. HR Function.ii. Managerial Compliance.iii. HR Climate.iv. Corporate Strategy.v. Research And Innovation. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 23
  • 23. ☛ Determination of objectives of each activity.☛ Identification of responsibility of performance.☛ Review of performance.☛ Developing an action plan to correct deviations between results and goals.☛ Follow up of action plans. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 24
  • 24. This covers Audit of Managerial Compliance of personnel policies, procedures and legal and welfare provisions. Compliance with the legal provision is most important as any violation makes the management guilty of an offence. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 25
  • 25. ☛ The working culture in any industry has an impact on employee motivation, morale, job satisfaction, employee absenteeism, safety, records and employee welfare. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 26
  • 26. ☛ This helps the industry to gain a competitive advantage. By analyzing the SWOT analysis of the industry the management can take decisions regarding market channels, services, innovation, low cost production and other like decision. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 27
  • 27.  It means experiments and testing of theories in all areas. With this the organization or the departments can come to know the changes to be made in experiments, reports, & publications. After this the organization compares the old test and new theories and encourages management activities. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 28
  • 28.  The general process of conducting an Audit includes seven key steps, each of which is discussed in greater detail below: 1. Determine the scope and type of audit. 2. Develop the audit questionnaire. 3. Collect the data. 4. Benchmark the findings. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 29
  • 29. 5. Provide feedback about the results.6. Create action plans.7. Foster a climate of continuous improvement. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 30
  • 30. To uncover the needed information, it is important todetermine exactly what areas should be targeted forreview. If the organization has never audited its HRfunction, or if there have been recent significantorganizational or legal changes, the audit team may wantto conduct a comprehensive review of all HR practiceareas. On the other hand, if concerns are limited to theadequacy of a specific process or policy, the audit focusshould be limited to a review of that particular area. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 31
  • 31.  Whether conducting a comprehensive audit or an audit of a specific practice, it is important to invest sufficient time in developing a comprehensive document that elicits information on all the subjects of the inquiry. A list of specific questions must be developed to ensure that the questionnaire is complete. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 32
  • 32.  The next phase includes the actual process of reviewing specific areas to collect the data about the company and its HR practices. Audit team members will use the audit questionnaire as a roadmap to review the specific areas identified within the scope of the audit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 33
  • 33.  To fully assess the audit findings, they must be compared with HR benchmarks. This comparison will offer insight into how the audit results compare against other similarly sized firms, national standards and/or internal company data. Typical information that might be internally benchmarked includes the company’s ratio of total employees to HR professionals, ratio of dollars spent on HR function relative to total sales, general and administrative costs, cost per new employee hired, etc. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 34
  • 34. National Standard Benchmarking might include thenumber of days to fill a position, average cost of annualemployee benefits, absenteeism rates, etc. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 35
  • 35.  At the conclusion of the audit process, the audit team must summarize the data and provide feedback to the company’s HR professionals and Senior Management team in the form of findings and recommendations. Findings typically are reduced to a written report with recommendations prioritized based on the risk level assigned to each item (e.g., High, Medium and Low). vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 36
  • 36.  It is critical actually to do something with the information identified as a result of an audit. The company must create action plans for implementing the changes suggested by the audit, with the findings separated by order of importance: High, Medium and Low. It actually increases legal risk to conduct an audit and then fail to act on the results. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 37
  • 37.  At the conclusion of the audit, it is important to engage in constant observation and continuous improvement of the company’s policies, procedures and practices so that the organization never ceases to keep improving. This will ensure that the company achieves and retains its competitive advantage. On way to do this is to continuously monitor HR systems to ensure that they are up-to-date and to have follow-up mechanisms built into every one of them. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 38
  • 38. The audit should be: o Proactive o Reactive o InformativeAudit Tools: Interview Questionnaire Historical analysis External Information vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 39
  • 39. Reporting the Results: •Compile your findings in a draft letter •Allow department head/manager to review your draft and make comments/corrections. •Compile final version. •Present report to senior management vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 40
  • 40. CONCLUSION : The Auditors always prepare and submit an audit report to authorityof the organization, which may be clean or qualified. The clean reportindicates the appreciative of the departments function, but the latter onerepresents the gaps in performance and therefore contains remarks andremedial measures. HR Audit is very much helpful to face the challengesand to increase the potentiality of the HR personnel in the organization. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 41
  • 41.  What Is Audit? Meaning Of HR Audit. Definitions Of HR Audit. Scope Of HR Audit. Objectives Of HR Audit. Significance Of HR Audit. Benefits Of HR Audit. Needs Of HR Audit. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 42
  • 42.  Areas Of HR Audit. Process Of HR Audit Reporting To Results. Conclusion. vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 43
  • 43. ☃ What is HR Audit ?☃ Why HR Audit is important ?☃ State the areas in which HR Audit is implemented ?☃ Are HR Audit and Personnel Audit same or different from each other?☃ Is HR Audit as important as financial audits Yes/No Why ? vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 44
  • 44. Thank you vaghela_manisha13@yahoo. BY: MANISHA VAGHELA com 45