Your SlideShare is downloading. ×
Auditing the HR function
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Auditing the HR function

1,760
views

Published on

Published in: Business, Technology

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,760
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
124
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. 1Human Resource AuditsHuman Resource AuditsDr Sorab Sadri and Prof. Jayashree Sadri
  • 2. 2Human Resource Audit?Human Resource Audit?A human resource audit evaluates the personnelactivities used in an organization. The audit mayinclude one division or entire company. It givesfeedback about :1. The function of operating managers.2. The human resource specialists.3. How well managers are meeting their humanresource duties.In short, the audit is an overall quality control checkon human resource activities in a division orcompany and how those activities support theorganization’s strategy
  • 3. 3Benefits of A Human ResourceBenefits of A Human ResourceAuditAudit Identifies the contribution of the personneldepartments to the organization Improves professional image of the personneldepartment Encourages greater responsibility andprofessionalism among members of the personneldepartment Clarifies the personnel department’s duties andresponsibilities Finds critical personnel problems
  • 4. 4The Scope of Human ResourceThe Scope of Human ResourceAuditsAuditsAudit of Corporate StrategyCorporate Strategy concerns how the organization is going to gain competitiveadvantage.Audit of the Human Resource FunctionAudit touches on Human Resource Information System, Staffing and Develop-ment, and Organization Control and Evaluation.Audit of Managerial ComplianceReviews how well managers comply with human resource policies andprocedures.Audit of Employee SatisfactionTo learn how well employee needs are met.
  • 5. 5Audit of Corporate StrategyAudit of Corporate Strategy Human resource professionals do not set corporatestrategy, but they strongly determine its success. By assessing the firm’s internal strengths andweaknesses and its external opportunities andthreats, senior management devises ways ofgaining an advantage, such as : stresses superior marketing channels, low-cost production, etc. Understanding the strategy has strong implicationsfor human resource planning, staffing,compensation, employee relations, and otherhuman resource activities
  • 6. 6Audit of the Human ResourceAudit of the Human ResourceFunctionFunction1. Human Resource Information System- Human Resource Plans : Supply and demandestimates; skill inventories; replacement chartsand summaries- Job Analysis Information : Job standards, Jobdescriptions, Job specifications- Compensation Management : Wage, salary, andincentive levels; Fringe benefit package;Employer-provided services
  • 7. 72. Staffing and Development2. Staffing and Development Recruiting : sources of recruits, availability ofrecruits, employment applications Selection : selection ratios, selection procedures,equal opportunity. Training and development : orientation program,training objectives and procedures, learning rates Career development : internal placement, careerplanning program, human resource developmentefforts
  • 8. 83. Organization Control and Evaluation3. Organization Control and Evaluation Performance appraisals : standards and measuresof performance, performance appraisal techniques,evaluation interview. Labor-Management Relations : Legal compliance,management rights, dispute resolution problems. Human Resource Controls : employeecommunications, discipline procedures, changeand development procedures,
  • 9. 9Tasks of AuditorsTasks of Auditors Identify who is responsible for each activity. Determine the objectives sought by each activity. Review the policies and procedures used toachieve these activities. Prepare a report commending proper objectives,policies, and procedures. Develop an action plan to correct errors in eachactivity. Follow up the action plan to see if it solved theproblems found through the audit.
  • 10. 10Audit of ManagerialAudit of ManagerialComplianceComplianceCompliance with laws is especiallyimportant. When safety, compensation, orlabor laws are violated, the governmentholds the company responsible.If managers ignore policies or violateemployee relations laws, the audit shoulduncover these errors so that correctiveaction can be started.
  • 11. 11Audit of EmployeeAudit of EmployeeSatisfactionSatisfaction Employee satisfaction refers to an employee’sgeneral attitude toward his or her job. When employee needs are unmet, turnover,absenteeism, and union activity are more likely.To learn how well employee needs are met, theaudit team gathers data from workers. The team collects information about wages,benefits, supervisory practices, career planningassistance, and other dimensions of job
  • 12. 12Research approaches toResearch approaches toauditsaudits1. Interviews with employees and managersare one source of information about humanresource activity. Employees and managerscomments help the audit team find that needimprovement.Another useful source of information is theexit interview. Exit interview are conductedwith departing employees to learn theirviews of the organization.
  • 13. 132. Questionnaires/surveys2. Questionnaires/surveysBecause interviews are time-consuming, costly,and often to only few people, many humanresource departments use questionnaires. Throughquestionnaire surveys, a more comprehensivepicture of employee treatment can be developed.Questionnaire may also lead to more candidanswers than face-to-face interviews.- employee attitude about supervisors- Employee attitude about their jobs- Perceived effectiveness of human resourcedepartment
  • 14. 143. Historical analysis3. Historical analysisNot all the issues of interest to human resource auditare revealed through interviews or questionnaires.Sometimes insight can be obtained by an analysis ofhistorical records, such as:- Safety and health records- Grievances records- Compensation studies- Scrap rates- Turnover and absenteeism records- Selection records- Affirmative action plan records- Training program records
  • 15. 154. External information4. External informationOutside comparisons give the audit team aperspective against which their firm’s activitiescan be judged.Through Department of Labor, industry association,professional association numerous statistics andreport are compiled.These organizations regularly publishes informationabout future employment opportunities, employeeturnover rates, work force projection, area wageand salary survey, work force demography,accident rates, and other data that can serve asbenchmark for comparing internal information.
  • 16. 16The audit reportThe audit reportFindings of research are used to developed apicture of the organization’s resource activities.For this information to be useful, it is compiledinto audit report.The audit report is a comprehensive description ofhuman resource activities that includes bothcommendations for effective practices andrecommendations for improving practices that areless effective.Audit report often contain several sections. Onepart is for line managers, another is for managerof specific human resource function, and the finalpart is for the human resource manager.
  • 17. 17Report for line managersReport for line managersHow line managers handle their duties suchas: Interviewing applicants Training employees Evaluating performance Motivating workers Satisfying employee needsThe report also identifies people problems.Violations of policies and employeerelations law are highlighted
  • 18. 18Report for the HR SpecialistReport for the HR Specialist The specialists who handle employmenttraining, compensation, and other activities alsoneed feedback. Such feedbacks are :1. Unqualified workers that need for training2. Qualified workers that need for development3. What others company are doing4. Attitude operating managers toward personnelpolicies5. Workers pay dissatisfaction
  • 19. 19Report for HR ManagerReport for HR Manager It is contains all the information given to bothoperating managers and staff specialists. Inaddition, HR Mangers gets feedback about : Attitude operating managers and employees aboutservices given by HRD A review of HRD plans Human resource problems and their implication Recommendations for needed changes andpriorities for their implementation