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Hr audit

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  • 1. HR AUDIT REPORTDepartment of Human Resource ManagementUniversity of KelaniyaGroup Assignments - Logiwiz Limited 1
  • 2. Logiwiz HR Audit reportGroup AssignmentHR Audit – BHRM 41132Department of Human Resource ManagementFaculty of Commerce and Management StudiesUniversity of Kelaniya12th March 2012 2
  • 3. Content1. Introduction to the Report2. Literature review to the assignment3. Current HR department situation at LOGIWIZ Limited4. Conclusion 3
  • 4. 01. Introduction to the report According to the assignment given to us for the subject of HRM Auditing we have toselect a company, study their HR Audit system, understand how it is being practiced in,compare it with the theories we learned and present our conclusions. So according toaccomplish that task we have selected Logiwiz Ltd and carried out our assignment.There is a widespread feeling that HR department has not lived up to the expectations ofeither the top management or the line managers. There are also examples of corporationswhere HR has taken the driver’s seat and has given a lot of benefits. In today’s competitiveworld, “people” or employees can give a good degree of competitive advantage to thecompany. To get the best out of HR function, there should be a good alignment of thefunction, its strategies, structure systems, and styles with business goals. It should be aligned,if it is not aligned the HR function can become a big liability to corporations and they willhave no alternative but to close their HR department. Besides this alignment, the skills andstyles of the HR staff, line managers and top management should be in synergy with the HRgoals and strategies. HR audit is an attempt to assess these alignments and ensure that theytake place.HR Audit is a “comprehensive evaluation of the current HR strategies, structure, systemsstyles and skills in the context of the short and long term business plans of a company afterassessing the current HR activities and inputs”.In Logiwiz HR is a main department because it has more than 200 permanent employees andmore than 1000 outsourced employees. Logiwiz is a main supply chain solution provider inthe market, so it has to manage their human resources very effectively to gain the competitiveadvantage through it. Having a qualified HR team and practicing the latest HR systems andprocesses will be an advantage to meet the organizational objectives.So in here we are going to evaluate the Logiwiz HR department to give a better and clear ideaof where it was, where it is now and where it should be. 4
  • 5. Objectives of this HR audit To clarify desired practices of HR work and roles within the organization (HR Department, Line Managers). To establish a baseline for future improvement. To evaluate current effectiveness. To standardize practices across multiple sites within a division or company. To assess current knowledge and skills required of HR practitioners. To improve performance levels to key customers within the organization.Introduction to LOGIWIZ Limited Logiwiz Limited (Logiwiz) is a member of Hayleys Advantis, the transportation andlogistics arm of the Sri Lankan blue chip conglomerate, Hayleys Group. Hayleys Advantis,which counts over 20 years in warehousing and distribution in Sri Lanka, has today grownbeyond the shores of Sri Lanka, and moved in to India, in keeping in line with the Logiwizvision to be the “Supply Chain Solutions Provider of choice throughout the Asia Pacificregion”. Logiwiz’s strength lies in its people, processes & technology. Logiwiz uses benchmarked technologies; from a tier 1 Warehouse management System and modern MaterialHandling Equipment to cargo specific storage solutions in adding value to the customerssupply chain and also it provides services such as freight management services, distributionmanagement solutions, production line logistics, production coordination functions, as wellas Value Added ServicesServices they supply Distribution Centre Management Stand-Alone Warehouses & Production Line Logistics Transportation Management Logistics Support & Value Added Services 5
  • 6. Logiwiz 3PL ClientsLogiwiz boasts of an impressive 3PL client base from a diverse number of industry verticalsranging from thread to telecommunication equipment, lubricants to automotive parts & fromfood to pharmaceuticals. 6
  • 7. 02. Literature Review to AssignmentOverview to the theoretical concepts that we are addressing through out the reportMissionA mission statement expresses the reason for specific company or organization existence.The mission statement should guide the actions of the organization, spell out its overall goal,provide a path, and guide decision-making. It provides "the framework or context withinwhich the companys strategies are formulated. Effective mission statements commonlyclarify the organizations purpose.The mission statement must answer three questions:  What is the basic service the organization is providing?  What is the market being served?  Which functions are to be performed?RecruitmentEmployee recruiting means finding and/or attracting applicants for the employer’s openposition (Dessler, 2008). Recruitment is a process of finding and attracting suitable qualifiedpeople to apply for employment (Opatha, 2009) 7
  • 8. Recruitment Process 1. Identify job vacancies (From HRP and specific request made by managers) 2. Ascertain job requirement (From job analysis information and manager’s comments) 3. Consider factors affecting recruitment (Organizational policies, cost, time and others) 4. Select the method(s) of recruitment (Internal or external) 5. Prepare job application form (Standard one or self prepared) 6. Implementation (Individuals apply and their applications are received) 7. Evaluation (To get a feedback for improvement of future recruitment) Source: Opatha, 2009, Human Resource Management Management  A good recruitment process will attract the right kind of employees, the kind that you want in your company with the knowledge, skills and abilities that you want and need  A good recruitment process will cost effective as well as time effective. 8
  • 9. Training and DevelopmentDefinitionsTraining & Development is defined as the heart of a continuous effort designed to improveemployee competency and organizational performance (Mondy and Noe, 2005).Training & Development is defined as the HRM function that formally and systematicallyprovides new learning to increase employees’ capabilities so as to increase their current jobperformance and future job performance as well (Opatha, 2009).Training and Development Process 1. Identify Training needs 2. Prioritize training needs 3. Establish training objectives 4. Determining training evaluation criteria 5. Make other related decision C ont e nt s Materials Methods Trainers Duration Time Place 6. Implementataos & Refreshment Me i l n Travelling & Payments 7. Evaluate the success of training Budget Source: Opatha, 2009, Human Resource Management 9
  • 10. A good training and development process will  Ensure optimizing the utilization of human resource  Development of Human Resources  Development of skills of employees  Increase Productivity  Increase Team spirit  Increase the Quality of productsPerformance EvaluationEmployee Performance Evaluation is defined as the systematic process of identifying,measuring, influencing, and developing job performance of the employees in the organizationin relation to the set norms and standards for a particular period of time in order to achievevarious purposes. (Professor Opatha)Importance of Employee Performance Evaluation  Control the performance and behviour of the employees.  determine the effectiveness of the employees  Derives employees towards the excellent standards of performance 10
  • 11. Process of PE Establish objectives of PE Formulating policies of PE Establishing PE criteria and standards Select method (s) of PE Design evaluation form and procedure Train Evaluators Appraise Discuss PE result Make decision and store Review and renewal 11
  • 12. Current Situation of Logiwiz HR DepartmentMissionHR Department has a clear mission statement, it is“Logiwiz Limited is committed, through its human resources (HR) policies and practices,to ensure that all personnel have the requisite knowledge, skills, and opportunities toprovide the highest quality of service in all projects”But the thing is that it is not communicating for the other employees. Not only for the otherdepartment employees. But also for the lower level employees of the HR department have notknowledge about the mission statement of the HR department. Mission statement of the HRand company both prepare by the senior management of the company. There is amanagement team who responsible for it and when they were preparing the mission they hadgot the help of company members too. Company mission statement is“Providing Tailored Supply Chain Solutions which create value for our customers”“Living ADV group values to earn respect of all our stake holders – inventors,customers, suppliers, employees and community”“Being recognized as people with supplier capabilities and commitment, both asindividuals and as an organization”HR department mission has prepared by the top management and it is also doubt us to decidethat it indicates the clear objectives of the department when we consider the missionstatement it is totally address the employees.But in practically HR department highly concentrate on practice, HR planning according to the company requirement Recruitment and selection Learning and Development Performance Management Day today HR activities 12
  • 13. General ManagerHR Department Structure Support services HR Manager HR Executive HR Executive HR Executive Manager Admin Pharmacist Admin Clerk Messenger/ DriverHead of the HR is the person who gets the total responsibility of the HR activities of thecompany. In here HR department has identified two main activities i. HR related activities ii. Admin related activitiesIn the total HR related activities such as,  HR Planning  Job Design  Job Analysis  Recruitments(Some parts)  Selection  Induction(some parts)  Learning and Development  Performance Management  Grievance handling  Promotion, demotion  Documentation (some parts) etc. 13
  • 14. Above things are done by the Logiwiz HR department. And they have out sourced some HRactivities and lower level employees of operations such as,  Pay management System  Recruitments(Some parts)  Induction(some parts)  Documentation (Data Base Management) some parts.It is not a total outsourced process. But as a subsidiary company of HAYLEYS Advantis,LOGIWIZ have outsourced some activities to HAYLEYS HR division. It is not a LOGIWIZdecision and it is a Group Directors decision. Advantis HR Manager and the HAYLEYS HRManager are always overlooking the LOGIWIZ HR activities.Recruitment ProcessAs to the recruitment process we can identify that whole hiring process is an integrated onewith several practices. Normally when Logiwiz tries to hire an applicant for the existingposition they consider the JD of existing position. In the JD they has included JS (JobSpecification) part and from that they can clearly identify required competencies includewith, - Knowledge - Skills - AttitudeWhen company is going to hire new position for the newly establish position. First theyprepare the JD before start the recruitment procedure.Normally there is a job posting program. First relevant department head fill the EmployeeRequisition Form (ERF) and send it to the Advantis HR through Logiwiz HR department.Once LOGIWIZ inform to the new recruitment requirement to HAYLEYS HR they announceit to whole group of company employees through IVN (Internal Vacancy Note) and theypublish it on website career link. From that all the staff in Hayleys group can get anopportunity to get transfer for the new position.If there are not suitable applicants from the group then Logiwiz HR starts to short list thereceived CV from outside parties. Then they plan the interviews (date, venue, interviewpanel) after that selected candidates send for the exams at head office. Then they select thecandidates for the final interview and the interview them and arrange a assessment centre.Finally finalize the candidate and issue the appointment letter. 14
  • 15. Performance ManagementOrganization has a PMS system where all the company level goals and objectives cascadeddown to the below levels. But it only works with the executive and above positions. Therethey evaluate the performance according personnel cascaded goals and objectives,achievement. They do this PE quarterly and according to that they give bonus and salaryincrement. For the non-Executives company uses their own PE procedure one to one sessionwith their cluster heads. It’s not like group PMS system and they evaluate the performance ofthe non-Executive according to certain criteria in monthly and give monthly incentives basedon them.Promotions of the employees is a group decision where LOGIWIZ and the HAYLEYS bothget decision together for the non- Executives, it easy to say that PE is the main considerablething for their promotions. But for the Executive and above can be differing. In the other wayHayley’s culture is going to change thing positive way too. They have started reward andrecognition programme names “ADVANTIS STAR” to identify and evaluate the specialpersonnel who give their contribution for the betterment of the company and generateinnovative ideas for the company. Performances of the employees are important to theorganization.There are so many people at LOGIWIZ who have joined to the LOGIWIZ as a clerical staffmember and now playing a managerial role. In the sense of career ladder, it is the bestexample for career progress. But as a small company which is vastly growing in the marketthere are small number of top positions in the company where Executive level employeeswant to wait till vacant it. 15
  • 16. Training and Development Logiwiz is a company which has initially started their own HR practices. Previously there was a one person at Logiwiz to help to the all HR activities which conducted by Hayleys. But in nearly it has developed to certain level and HR department is going start their own training plan. In previous year also they had developed a HR plan and have got action on that. In this year they are going to develop T&D Process in a deferent way and they are going to identify training needs in a very tactical way and going to develop a quality training plan. And also HR department is preparing a skill inventory to identify the existing competencies and knowledge of the employees. In there they identify specific competencies which are need to perform his task and responsibilities and as well as other abilities which that particular person posses with himself and company can use those abilities to add a value for that person. In the sense of developing stage in here we can’t identify the successfulness of training plan and process. Still Logiwiz has not identified specially the behavioral objectives of the training. But head of the HR at Logiwiz clearly specified that in the Logiwiz there are lots of people who has skill in the technical side but there are lacking in the area of behavioral aspect. Training Program Internal Training program External Training (conducted by Program (conducted Logiwiz) by outsource parties)Use internal trainers Use external trainers Standard out source Customized outsourced training program training program conducted by external according to the Logiwiz parties requirement conducted by external parties 16
  • 17. DocumentationHR documentation part is well structured by the Hayley’s HR division and they are theresponsible person to maintain and update that all relevant document.Files are maintained in very safely and unauthorized person can’t access them. And there isan accountable person for those activities at Hayleys HR division. Certain standards are beingmaintained to these documentation activities which mentioned by ISO standard.HRIS system can be used by the executive and upward levels. It’s an online system whichhelps to access anyone at any time. Annual Performance evaluation, personal informationmaintaining and other many tasks are done through this system.Employee Relation / Labour ManagementThere is no proper grievance handling procedure within the company and employees do notknow about the grievance handling procedure.As a company which follows open door policy. In here any employee can meet any managerat any time and express his or her grievance to him. Also it can be a mobile call. HRdepartment has not implemented any Grievances Settlement Procedure yet and haven’t anymode to get the employees’ grievances to the HR Department. There is a disciplinaryprocedure at Logiwiz. But it has not clearly mentioned in a written document. Alsoacknowledges about disciplinary procedure within the employees also in minimum level. 17
  • 18. Audit OutcomesUsing questionnaire method is easy to collect information from the staff. Selected categoriesare executives and non executives for the information collection. It was not easy todistributing a questionnaire among staff members and collect data regarding seven categories.And finally evaluate those questionnaires and take a percentage and an overall idea aboutthose functions. And general observation details also helped to make this report.Mean calculation for each aspect has demonstrated below: Fact Strongly Agree Disagree Strongly Agree Disagree Question 01 – 05 Mission 0.0666 0.4533 1.48 0.8533 Question 06 – 08 Internal Relationships 0.2 1.1111 0.73 - Question no 09– 12 Recruitment 0.25 1.16 0.5 - Question no 13 – 23 Performance Evaluation - 0.0363 1.4909 1.9151 Question no 24 – 33 Training & Development 0.2267 1.2267 0.46 Question no 34– 38 Documentation 0.32 1.1467 0.28 - Question no 39 –46 Labour Management 0.1 1.2333 0.7 0.2 Relation 18
  • 19. Question 01 – 05:- MissionAs discussed earlier mission of a department or an organization is highly important. So inLogiwiz while doing the HR Audit it was highlighted that most of the employees in executive& non-executive level, both don’t know the each department’s missions and organizationalvision mission statements. So it’s not a good situation.Majority of the employees are clearly not aware about the HR department Mission statementor else disagree with it. 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly DisagreeQuestion 06 – 08:- Internal RelationshipsIn here focused was going to the internal relationship between HR department and otherdepartments.Most of the employees have answered to these questions. With regards to their answers it wasnoted that the relationship status between HR department and other departments is in anaverage/middle level. Therefore, the company can make further improvements to make itstronger. 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly Disagree 19
  • 20. Question no 09– 12:- RecruitmentRecruitment is a major function of HR Department. Here at Logiwiz majority of bothexecutive level and non-executive level employees have agreed for the recruitment process.But even in here, the company can make further improvements to make it a more powerfulaspect. 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly DisagreeQuestion no 13– 23:- Performance EvaluationPerformance management is tool used to evaluate employee’s performance and the trainingneeds. So in Logiwiz the response of executive & non-executive levels employees are asfollows. 2.5 2 1.5 1 0.5 0 Strongly Agree Agree Disagree Strongly DisagreeIt is visible that this function is not in a satisfactory level yet and majority of employees havestrongly disagreed to the performance management function used by the company. 20
  • 21. Question no 24– 33:- Training & DevelopmentHuman Resource Development (HRD) is the framework for helping employees developstheir personal and organizational skills, knowledge, and abilities. Human ResourceDevelopment includes such opportunities as employee training, employee careerdevelopment, performance management and development, coaching, mentoring, successionplanning, key employee identification, tuition assistance, and organization development.Thefocus of all aspects of Human Resource Development is on developing the most superiorworkforce so that the organization and individual employees can accomplish their work goalsin service to customers.Majority of executive and non-executive level employees agree with current learning anddevelopment function of the company. However company can use many other methods tomake L & D unction more robust within the company. 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly DisagreeQuestion no 34– 38:- DocumentationDocumentation contains the activities relating to day- to-day documents. Since this is in anaverage level, company can get steps to improve this further. 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly Disagree 21
  • 22. Question no 39 –46:- Labour Management RelationEmployee Relations involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale.Essentially, Employee Relations is concerned with preventing and resolving problemsinvolving individuals who arise out of or affect work situations.Since this is in an average level, it is better if company can make necessary improvements toenlarge labour management relationships within the company. 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Strongly Agree Agree Disagree Strongly Disagree 22
  • 23. 03. ConclusionA healthy HR function in an organization is as important as the physical and mental wellbeing of a human body. Typically the basic reason why organizations prefer to conduct anHR audit is to get a clear judgment about the overall status of the organization and also tofind out whether certain systems put in place are yielding any results. HR audit also helpscompanies to figure out any gaps or lapses and the reason for the same. Since every companyplans certain systems and targets, an HR audit compares the plans to actual implementationMoving to the final outcomes of our HR Audit done at Logiwiz Limited, we are able toconclude our findings as follows with the recommendations. In bird eye view it is possible tograde the final findings as, overall HR Functions are processing in a satisfactory level. Butthe ultimate objective of this audit was to get a thorough understanding about the existinglevel of the process of HR department and finding strategies to up lift the existing conditionto reach a step ahead as a department. Therefore we are suggesting followings by based onthe final figures of the HR audit.Suggestions and Recommendations Mission statement of the HR Department should communicate properly to the all HR people and all the employees. Followings are our suggestions for that. 01. All the computer desktops can update by a permanent wall paper that reminds about the department mission. It will drive them to reach it with fullest capacity. 02. Mission should be properly display in a wall of HR department. 03. HR manager or responsible managerial employee can remind the ultimate target of the department in monthly review meetings. Internal Relationship should enhance and make stronger. To do these following options can be suggested. 01. Establish a proper roster to visit outside locations of the cluster and have formal discussions and same time informal chats with them. Get the update about the HR related issues and the needed things that have to be done through HR department. Then the HR people will be able to get quick actions to make them done. 23
  • 24. 02. Establish a hyperlink through common place in information system or introduce an e- mailing system to all the department heads and other responsible people to update their issues in a common sheet according to a common standard. Then HR department can get the daily updates about the issues and make corrective actions soon. Then HR people can update the common sheet about the corrective action they have taken. Following structure can be suggested. Action Responsible Reported should be CorrectiveReporting Responsible person who Department By Issue taken on Action Status Date person took the or before taken- Date action (Date) The finger print Technical Warehouse machine EX- HR person is Executive , of the In Warehouse Executive 2012/03/07 2012/03/06 appointed to2012/03/05 Nimal warehouse progress Amith check the Silva is not condition working properly 03. Organize functions and events that can create interdepartmental relationship and provide opportunity for employees to deal with each other in an informal manner. Ex- New Year festivals Annual Sports Day Birthday Celebration parties of executives and above people Recruitment and Selection can be improved further through following implementations. I. The recruitment and selection procedure should re- structured to avoid unnecessary delays and waiting times. That procedure should communicate to the relevant people and should process according to a time line. Same time it is needed to introduce new documents set for the recruitment procedure. 24
  • 25. II. Should introduce a properly designed feed back evaluation form for the induction program and by based on the feedback analysis the management will be able to enhance the quality of the contents and overall program. Performance Evaluation can be enhanced as follows - Establish a proper written policy procedure to circulate information about promotions - Prepare appropriate skill inventory - Performance appraisal should be done on regular intervals - Should establish suitable procedure to collect and evaluate PE feedbacks Training and Development can be improved through following suggestions 01.Relevent managers and responsible persons should make aware and trained well about the accurate procedure of conducting a proper T&D Need Analysis. 02. Should consider linking Need Analysis step of T&D with the performance Appraisal procedure. 03. Should maintain proper, easy referring, visualized training record system and it should display in a specifically arranged board in every department. Employer Employee Relationship can be implementing in an advanced manner by considering following suggestions too. 01. Needed proper, well established and transparent grievance handling procedure and disciplinary handling procedure 02. Should introduce proper method for employees to give their comments , suggestions and complains We are suggesting to introduce complains and suggestion box and keep a roster to get the updates of it and provide immediate solutionsThe overall processing level of Logiwiz Limited can be grade as Average based on the Auditfindings and by considering above given suggestions and recommendations they will be ableto up lift the quality of their functions and ensure the smooth functioning of the HR practices.Ultimately that will drive the department towards their Department Mission and ultimately itwill lead the total organization towards their final Organizational Mission. 25
  • 26. Group Members1. V.P.N Badungodage BM/2007/0102. M.D.D Baig BM/2007/0113. H.R.M Caldera BM/2007/0254. S.J.L Madusanka BM/2007/1465. M.D.V.S Mendis BM/2007/1536. M.D.S Mudannayake BM/2007/1567. W.D.S Suboda BM/2007/2628. M.K.M.E Perera BM/2007/1809. P.A.C.H.K Weerakoon BM/2007/28310. W.G.I.L Wijesinghe BM/2007/299 26

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