Hr audit


Published on

Published in: Education, Business, Technology
No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Hr audit

  1. 1. Strategic Human Resource Management Conducting an HR Audit
  2. 2. Conducting an HR Audit Prepared & Presented By: MR. ZEESHAN MOIEZ ALI Human Resource Professional
  3. 3. Conducting an HR Audit <ul><li>Presentation Flow Chart </li></ul><ul><ul><ul><li>Definition of HR Audit </li></ul></ul></ul><ul><ul><ul><li>Purpose </li></ul></ul></ul><ul><ul><ul><li>Understanding </li></ul></ul></ul><ul><ul><ul><li>Scope </li></ul></ul></ul><ul><ul><ul><li>Steps in HR Audit </li></ul></ul></ul><ul><ul><ul><li>Planning </li></ul></ul></ul><ul><ul><ul><li>Measuring Organization </li></ul></ul></ul><ul><ul><ul><li>Components covered under HR Audit </li></ul></ul></ul><ul><ul><ul><li>Review Practices & Procedures </li></ul></ul></ul><ul><ul><ul><li>Checking People Practices </li></ul></ul></ul><ul><ul><ul><li>Use of IT </li></ul></ul></ul><ul><ul><ul><li>SWOT Analysis </li></ul></ul></ul><ul><ul><ul><li>Audit Feed back </li></ul></ul></ul>
  4. 4. Definition of HR Audit <ul><li>The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization’s HR functions. </li></ul><ul><li>The PURPOSE of the HR Audit is to reveal the strengths and weaknesses in the nonprofit’s human resources system & it focus is on analyzing and improving on the HR functions in the organization. </li></ul>
  5. 5. Understanding HR Audit <ul><li>The aim of a HR audit is to provide a systematic examination of the department’s activities. </li></ul><ul><li>Focus on: </li></ul><ul><ul><ul><ul><ul><li>Review personnel policy </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Procedures </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Practice against planned & expected results . </li></ul></ul></ul></ul></ul><ul><li>Audit should be backed by Senior Management </li></ul><ul><li>Essential step towards improving departmental credibility and overall quality goals. </li></ul>
  6. 6. Scope of the HR Audit <ul><li>Identify current procedure and practice </li></ul><ul><li>Analysing cost and the effectiveness of time and resource allocation </li></ul><ul><li>Reviewing clients’ satisfaction and expectation </li></ul><ul><li>Three Aspects of HR Audit: </li></ul><ul><ul><ul><li>Systems Audit – Forms, records & files </li></ul></ul></ul><ul><ul><ul><li>Operations Audit – How well people use given forms </li></ul></ul></ul><ul><ul><ul><li>Climates Audit – what people think of the function and compares this against personnel's own perceptions </li></ul></ul></ul>
  7. 7. Steps in HR Audit <ul><li>Steps in HR Audit </li></ul><ul><ul><ul><li>Organisation Overview </li></ul></ul></ul><ul><ul><ul><li>List the HR practices of your organization </li></ul></ul></ul><ul><ul><ul><li>HR Dept. Overview & Checking </li></ul></ul></ul><ul><ul><ul><li>Assess current practicing areas and measure them against the criterion that you have developed </li></ul></ul></ul><ul><ul><ul><li>Meetings/ Interview with HR people & Common Employees </li></ul></ul></ul><ul><ul><ul><li>Analyze the result </li></ul></ul></ul><ul><ul><ul><li>Prepare Recommendations / feedback for further improvements </li></ul></ul></ul><ul><ul><ul><li>Recommendation/ Areas of Improvement </li></ul></ul></ul>
  8. 8. Setting up the Audit <ul><li>Measuring Organization </li></ul><ul><ul><li>Corporate Culture. (Vision, Mission) </li></ul></ul><ul><ul><li>Centralization & Decentralization </li></ul></ul><ul><ul><li>Strategies & Operations </li></ul></ul><ul><ul><li>Business development Activities </li></ul></ul><ul><ul><li>Flow of Communication </li></ul></ul><ul><ul><li>Hierarchical Setup </li></ul></ul><ul><ul><li>Availability of Skilled Manpower </li></ul></ul><ul><ul><li>Use of Technology </li></ul></ul><ul><ul><li>Checks & Accountability </li></ul></ul>
  9. 9. Clear Personnel Objectives <ul><li>The function needs to have clear stated objectives for the forthcoming year. </li></ul><ul><li>In essence the objectives should be the equivalent of the personnel department’s mission statement. Publication probably needs to be two levels: </li></ul><ul><ul><ul><ul><ul><li>Strategic </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Operational </li></ul></ul></ul></ul></ul><ul><li>Knowledge of HR Functions & Objectives. </li></ul><ul><li>HR Staff Meeting. </li></ul>
  10. 10. Components Covered Under HR Audit <ul><li>HR Audit process consists of a series of questions covering the eight primary components of the HR function. </li></ul><ul><li>Roles, head count, and HR information systems (HRIS) </li></ul><ul><li>Staffing (Recruitment & Selection) process. </li></ul><ul><li>Personnel Records Documentation </li></ul><ul><li>Training, development, and career management </li></ul><ul><li>Compensation, Rewards and benefits. </li></ul><ul><li>Performance measurement and evaluation </li></ul><ul><li>Termination / demotions and transition / turnovers. </li></ul><ul><li>Legal actions / issues and personnel policies </li></ul>
  11. 11. Reviewing practice & procedure <ul><li>HR practices and procedures are examined & checking its implementation at grass root level including level of activities: </li></ul><ul><ul><li>HR & Business Strategy </li></ul></ul><ul><ul><li>HR Philosophy for Organization & its people </li></ul></ul><ul><ul><li>Manpower Planning </li></ul></ul><ul><ul><li>Staffing & Personnel Records Maintenance </li></ul></ul><ul><ul><li>Salaries& Compensation & Benefits & Perks </li></ul></ul><ul><ul><li>Performance Management & Career Advancement </li></ul></ul>
  12. 12. Reviewing practice & procedure <ul><ul><li>Absence policy & Leave policy & Turnover ratios. </li></ul></ul><ul><ul><li>Career Development & Change through Trainings. </li></ul></ul><ul><ul><li>Employee Relations </li></ul></ul><ul><ul><ul><li>Minors & Majors Rights, Warning, Reprimands, Termination, Suspension, Dismissal, Firings, Plenties etc </li></ul></ul></ul><ul><li>All above categories are checked against best practices </li></ul>
  13. 13. Cost and time Analysis <ul><li>Personnel function analyse how and where they allocate resources in terms of people, time & money. </li></ul><ul><li>Analysing department costs: </li></ul><ul><ul><ul><li>Personnel Staff Salaries/ Benefits </li></ul></ul></ul><ul><ul><ul><li>Day to day running cost </li></ul></ul></ul><ul><ul><ul><li>IT budget </li></ul></ul></ul><ul><ul><ul><li>T&D </li></ul></ul></ul><ul><ul><ul><li>Miscellaneous </li></ul></ul></ul>
  14. 14. Checking People Practices <ul><li>In addition to analysing time and activity, the audit needs to review the people practice within the department. These areas should be considered: </li></ul><ul><ul><ul><ul><li>Orientation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Job description </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Competency Level </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Stability </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Motivation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Retention </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Trainings </li></ul></ul></ul></ul>
  15. 15. Checking People Practices <ul><li>The audit needs to cover every area of personnel practices, for example </li></ul><ul><ul><ul><li>Leaves Calculation </li></ul></ul></ul><ul><ul><ul><li>Goals & Objectives </li></ul></ul></ul><ul><ul><ul><li>Personnel Documentations </li></ul></ul></ul><ul><ul><ul><li>Job Analysis & Descriptions </li></ul></ul></ul><ul><ul><ul><li>Recruitment Process. </li></ul></ul></ul><ul><ul><ul><li>Salaries Surveys & Scales </li></ul></ul></ul><ul><ul><ul><li>Benefits, Allowance & Entitlements </li></ul></ul></ul><ul><ul><ul><li>Data Protection </li></ul></ul></ul><ul><ul><ul><li>Annual Appraisals & Salary Revision </li></ul></ul></ul><ul><ul><ul><li>Organizational Chart. </li></ul></ul></ul>
  16. 16. Using of Information Technology <ul><li>This is a crucial area. If computer systems are used, the department would benefit from a review of </li></ul><ul><ul><li>Objective – making the obj. </li></ul></ul><ul><ul><li>Data Audit – accuracy of data </li></ul></ul><ul><ul><li>Report – what are the formats </li></ul></ul><ul><ul><li>Hardware layout – access of software </li></ul></ul><ul><ul><li>Integration - required training </li></ul></ul>
  17. 17. SWOT Analysis <ul><li>All information can then be summarised into a simple Strengthen, Weakness, Opportunities and Treats grid </li></ul>Strengths Opportunities Defined recruitment process Reduce bureaucracy Good manual records Training and skills devep. Computerised HR system Improve information Weaknesses Threats Lack of payroll integration Line manager’s own systems Poor training record Inconsistent HR applications Too operational Use of external consultants
  18. 18. Audit Feed Back <ul><li>After Reviewing HR functions, Roles & Activities, Audit team provided feedback base on recommendations and observations, evaluations & findings in, </li></ul><ul><ul><li>HR Operations </li></ul></ul><ul><ul><li>HR Effectiveness </li></ul></ul><ul><ul><li>HR Strategies </li></ul></ul><ul><ul><li>HR Services </li></ul></ul><ul><ul><li>HR Development </li></ul></ul><ul><li>These are for further improvement in system & services where needed, the example is given below, </li></ul>
  19. 19. Audit Feed Back <ul><li>Maintaining updated Resume database. </li></ul><ul><li>Contract employees should be hire for short term projects. </li></ul><ul><li>Separate place for Personnel Files. </li></ul><ul><li>Goals & Objective should be updated quarterly. </li></ul><ul><li>For hiring & promotions who holds the final authority </li></ul><ul><li>Separation process need more clearance & transparency. </li></ul><ul><li>Functional Heads should review screened resumes. </li></ul><ul><li>Employees must aware with Quality Policy, Timings, & Mission & Vision of company. </li></ul>
  20. 20. Audit Feed Back <ul><li>More reports formats need to add in HRMS or HRIS </li></ul><ul><li>More Focus required on succession planning. </li></ul><ul><li>Forms for reimbursement need to be introduced. </li></ul><ul><li>Employee handbook updating on yearly basis. </li></ul><ul><li>To improve the entire communication system </li></ul>
  21. 21. Is it Worthwhile?? Conducting an HR audit is the first crucial step in improving the service of the function. It collects facts and evidence of what you actually do and identify what you need to do. The audit also help the department to clarify its role and steps. It is impossible to improve everything in one step. The HR audit is the first step towards the quality personnel function .
  22. 22. Strategic Human Resource Management Conducting an HR Audit Thank you!!!