3a 8 Human Resources Audit

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How do we conduct HR audit ? HERE WE GO !

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3a 8 Human Resources Audit

  1. 1. Operational Auditing - Human Resources Audit - in Manufacturing Sector
  2. 2. <ul><li>HR - AUDIT </li></ul><ul><li>WHAT ? </li></ul><ul><li>WHERE & WHEN? </li></ul><ul><li>BY WHOM? </li></ul><ul><li>HOW? </li></ul>
  3. 3. “ Human Resource” - An Unique Asset <ul><li>Resource Classification </li></ul><ul><li>Money </li></ul><ul><li>Materials </li></ul><ul><li>Machinery </li></ul><ul><li>Methods </li></ul><ul><li>MEN </li></ul><ul><li>Now added: </li></ul><ul><li>Mouse! </li></ul><ul><li>Review Features </li></ul><ul><li>(Cost / Benefit) </li></ul><ul><li>Acquisition </li></ul><ul><li>Maintenance </li></ul><ul><li>Utilisation </li></ul>
  4. 4. <ul><li>Unleash the potential ! </li></ul><ul><li>‘ R O I’ for HR </li></ul><ul><li>Focus </li></ul><ul><li>‘ Assurance’ Areas & ‘Value Added’ Areas </li></ul><ul><li>From ‘Cost’ Centre to that creates ‘Value’! </li></ul><ul><li>“ GAP” (in Key Resources, Technology & Structure) between </li></ul><ul><ul><ul><li>Current performance& Future requirements and </li></ul></ul></ul><ul><ul><ul><li>the time frame in which the gap must be closed </li></ul></ul></ul><ul><li>What will be the ROI of the development and over time </li></ul><ul><li>period? </li></ul><ul><li>What types of skill development will enable the function to </li></ul><ul><li>add more value? </li></ul>
  5. 5. <ul><li>The most critical competencies for HR to add greater value to the organistions are, </li></ul><ul><ul><ul><ul><li>Consulting Skills </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Leadership </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Coaching </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Facilitation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Business understanding </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Cross - Functional expertise </li></ul></ul></ul></ul>Competencies
  6. 6. An effective HR function therefore will deliver the following <ul><ul><ul><ul><li>Be able to facilitate change and support the developing agenda of the organisation, its component parts and partners </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ensure that the HR function can provide strategic advice, such as the ability to link people management with the overall objectives of the organisation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ensure that the HR function can provide specialist advice on particular areas such as pay policy, employee relations, etc. </li></ul></ul></ul></ul>Deliverables
  7. 7. <ul><ul><ul><ul><li>Improve lines of communication - across departments / organisations and between strategic and implementation activities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Position HR practitioners close to the customers and be able to influence decision-making organisationally and departmentally </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Be flexible and therefore able to meet the current and anticipated requirements of the organisation, its component parts and partners </li></ul></ul></ul></ul>Deliverables An effective HR function therefore will deliver the following
  8. 8. <ul><ul><ul><ul><li>Allow for clearer accountability to enable consistent, high quality HR advice relative to need </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Enable HR best practice to be effectively shared across the organisation, its component parts and partners to avoid duplication of effort </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Facilitate the ongoing professional and career development of HR staff </li></ul></ul></ul></ul>Deliverables An effective HR function therefore will deliver the following
  9. 9. Essential outcomes (Effective people Management) <ul><li>Efficiency, Effectiveness & Economy </li></ul><ul><li>Focus & direction mirrors the Business strategy </li></ul><ul><li>Consistency in people management delivery </li></ul><ul><li>Adequacy of records on employees </li></ul><ul><li>Employees know what is expected of them </li></ul><ul><li>Employees are supported to deliver what is required of them </li></ul><ul><li>Suitable employees are in place when required </li></ul><ul><li>by the needs of the service </li></ul><ul><li>Employee disputes are handled effectively </li></ul>
  10. 10. Need for developing an Workable Model based on, <ul><li>Design criteria for HR delivery </li></ul><ul><li>KPI (Key Performance Indicators) </li></ul><ul><li>Sources of Evidence </li></ul>
  11. 11. Key Performance Indicators for an HR Function
  12. 12. Key Performance Indicators for an HR Function
  13. 13. Key Performance Indicators for an HR Function
  14. 14. Key Performance Indicators for an HR Function
  15. 15. Key Performance Indicators for an HR Function
  16. 16. Key Performance Indicators for an HR Function
  17. 17. Typical HR Planning Model
  18. 21. Training & its impact on performance
  19. 22. Training & its impact on performance <ul><li>Need for evaluating Training Programs: </li></ul><ul><li>Use of training to improve performance holds massive appeal for HR </li></ul><ul><li>Managers </li></ul><ul><li>Therefore ineffectiveness of training is a let down for any manager </li></ul><ul><li>Quantifiable <--> Qualitative </li></ul><ul><li>Employee self esteem, information sharing & employee associations and </li></ul><ul><li>team work </li></ul><ul><li>ROI on training programs </li></ul><ul><li>Translate training into bottom and top line performance improvements </li></ul><ul><li>‘ Accenture’ has developed the ‘Accenture’ learning return on </li></ul><ul><li>investments methodology </li></ul>
  20. 23. Effective Methods for HR to streamline Cost Structure <ul><li>HR needs to cut costs and adopt advanced technologies </li></ul><ul><li>so that the return on investment (ROI) is bettered / cycle </li></ul><ul><li>time reduced </li></ul><ul><li>Shift from clerical jobs to higher value activities </li></ul><ul><ul><li>Outsourcing (lower value administrative chores) </li></ul></ul><ul><ul><li>(Reduce HR expenditure by 20%) </li></ul></ul><ul><ul><li>Re-engineering the HR processes </li></ul></ul><ul><ul><li>Re-vamp the HR delivery process (Total </li></ul></ul><ul><ul><li>empowerment program - ESS) (Strategy to reach out to </li></ul></ul><ul><ul><li>the employee rather than expecting them to come to HR) </li></ul></ul>
  21. 24. Effective Methods for HR to streamline Cost Structure <ul><li>Turnover Costs! (Almost amounts to 50 to 150% of the </li></ul><ul><li>employees’ annual salary) - Intangible costs can be greater! </li></ul><ul><li>(Proper Human audits, competencies recognition, Retention budget - </li></ul><ul><li>calculate replacement (or) retention value of an employee) </li></ul><ul><li>Eg: Financial implication of each HR intervention </li></ul><ul><li>HR objective : Reduce Turnover rate by increasing the training budget </li></ul><ul><li>then compare Rate of Turnover & ROI of the training program </li></ul><ul><li>if calculated rate of turnover is say 28% and intervention reduces it by </li></ul><ul><li>8%, calculating the cost of this 8% turnover and the cost of training can </li></ul><ul><li>decide if it is worth going a lead with the program </li></ul>
  22. 25. <ul><li>Three substantial components of this methodology </li></ul><ul><li>Recruitment </li></ul><ul><li>Productivity </li></ul><ul><li>Performance </li></ul><ul><li>Recruitment : Opportunity for growth </li></ul><ul><li>(Learning prospects - primary motive for joining) </li></ul><ul><li>MEASURE THESE ‘SO CALLED’ SOFT FACTORS </li></ul><ul><li>(Running training like a business) </li></ul><ul><li>Productivity: </li></ul><ul><ul><li>77% considered training information as relevant to work </li></ul></ul><ul><ul><li>53% alleged a net worthy increase in productivity </li></ul></ul><ul><ul><li>85% sure of a seasonable expansion in skills </li></ul></ul>
  23. 26. <ul><li>Some performance improvement indicators </li></ul><ul><li>Performance of Plot data regarding </li></ul><ul><li>Sales Executives Sales achieved </li></ul><ul><li>Customer care professionals No. of calls attended / queries </li></ul><ul><li> solved </li></ul><ul><li>Evaluate Financial Benefits </li></ul><ul><li>Correlation of cost & benefits analysis </li></ul>
  24. 27. <ul><ul><li>Study revealed </li></ul></ul><ul><ul><ul><li>17% more dynamic </li></ul></ul></ul><ul><ul><ul><li>Perform at higher levels </li></ul></ul></ul><ul><ul><ul><li>Continue with the organisations for longer periods </li></ul></ul></ul><ul><ul><ul><li>Yearly per person net profit of the training sessions is </li></ul></ul></ul><ul><ul><ul><li>$25,324 (Average of the 50,000/- employees total earnings </li></ul></ul></ul><ul><ul><ul><li>of $1.26 billion on training) </li></ul></ul></ul>
  25. 28. ‘ HR’ dimension in an ‘ERP’ implementation
  26. 29. ‘ HR’ dimension in an ‘ERP’ implementation <ul><li>Evaluating the effectiveness of ‘HR’ Role! </li></ul><ul><li>Change management (Business Process reengineering systems) </li></ul><ul><li>Managing the excess manpower after ERP! </li></ul><ul><li>Roles & authorities </li></ul><ul><li>‘ Security & Control’ Policy implementation effectiveness. </li></ul><ul><li>(employee declaration on usage of computers / information </li></ul><ul><li>security etc.) </li></ul><ul><li>Effective introduction of ‘ESS’ System </li></ul>
  27. 30. Successful Empowerment
  28. 31. Process of successful Empowerment <ul><li>Empowerment is not a static event but rather a dynamic evolutionary process </li></ul><ul><li>Different Stages: </li></ul><ul><li> (a) Manager makes decision and </li></ul><ul><li>informs the Team. </li></ul><ul><li>(Sometimes does not inform also) </li></ul><ul><li> (b) Manager asks for suggestions, </li></ul><ul><li>makes the decisions & informs </li></ul><ul><li>Team. </li></ul>
  29. 32. Process of successful Empowerment <ul><li>(c) Manager & the Team discuss the situation at </li></ul><ul><li>length and proposals / inputs come from Team. </li></ul><ul><li>Manager then takes the decision & informs. </li></ul><ul><li>(d) Decisions made co-operatively between </li></ul><ul><li>Manager & Team </li></ul><ul><li>(e) Manager delegates the decision making to the </li></ul><ul><li>Team. </li></ul>
  30. 33. Process of successful Empowerment <ul><li>Effectiveness of the </li></ul><ul><li>Process </li></ul><ul><li>(Facilitated by a proper control System ) </li></ul><ul><li>Successful Empowerment </li></ul><ul><li>of People </li></ul><ul><li>(Depends on the </li></ul><ul><li>effectiveness of the </li></ul><ul><li>process) </li></ul>
  31. 34. HR effectiveness metrics <ul><li>Most productive people </li></ul><ul><li>Right number </li></ul><ul><li>Over paying? </li></ul><ul><li>Improve their skills </li></ul><ul><li>Retention </li></ul><ul><li>Forecasting & Preventing people problems </li></ul>
  32. 35. e - HR - Technology tools list <ul><li>Employment </li></ul><ul><li>Employee Relations (ER) </li></ul><ul><li>Training and Career Development </li></ul><ul><li>HRIS Systems </li></ul><ul><li>Corporate, Communications and Other </li></ul><ul><li>Call Centers </li></ul>
  33. 36. Thank You

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