HR functions can be measured to evaluate their contribution to an organization. Common methods used include HR audits, research, benchmarking, and HRIS. An HR audit evaluates HR activities and identifies strengths and weaknesses. HR research analyzes HR data to improve practices by seeking answers through comparison or statistical analysis. Benchmarking compares HR performance metrics to standards or high-performing organizations. An HRIS system automates the collection, storage, and distribution of HR information to support decision-making. Together, these methods provide feedback and metrics to demonstrate how HR activities and performance are contributing to organizational objectives.

1. HR Measurement & audit
HR audit
HR research
Benchmarking
HRIS

2. Introduction
 There seems to be general notion that one
cannot really measure what HR function
does. That notion is ofcource not correct.
 Hr function like marketing, finance or legal
must be evaluated based on its addition to
the organization

3.  HR managers perform two functions :Line
function & staff function While line function
refers basically to managing the hr
department : more significant is the staff
function (also called advisory role )
 HR managers & their performance are
subject to audit for these function . Other
department , ees & managers are the main
“customers” for hr services

4.  If these areas are lacking, too expensive or of
poor quality , the organization may suffer in
its objectives . Hr position act as partners in
an organization, but only by demonstrating
real link between what he activities contribute
to org results
 To demonstrate to the rest of the org that hr
unit is a partner with a positive influence on
the bottom-line ………….

5.  ……….Hr professionals must be prepared to
measure the results of hr activities . Then hr unit
must communicate that information to the rest of the
org.
 4 systems are most often used to measure HR
effectiveness. These are
 HR Audit
 HR research
 Benchmarking
 HRIS

6. HR Audit
 An HR Audit evaluates the HR activities in an
organization with the intent of improving
those activities . The audit may include one
division or the entire company
 Provide feedback to the operating managers
& HR specialist
 Provide feedback on How well managers are
meeting their hr duties

7.  It is an overall quality control check of HR activities in a
division or company
preliminary components of HR audit:
1. Personnel policy
2. Human resource planning
3. Recruitment, selection & placement
4. Human resource training & development
5. Performance evaluation , promotion
6. Employee relation
7. Communication, suggestion scheme, areas of participation
8. Compensation , rewards, benefits and services

8.  Objectives:
1. 1. To review the performance of HR department & its
activities
2. To locate the gaps, lapses, shortcomings in the
implementation of the policies, procedure, practices
3. To corrective steps
4. TO evaluate the personnel staff & employees
5. To evaluate to what extent line managers have implemented
the directives & guidelines for effective management of HR
in their respective departments
6. To seeks answers to ‘what happened ?’,’ why did it
happen?’, or why did it not happen?

9.  The purpose of the audit is to reveal the strengths and
weaknesses in the human resources system, and any issues
needing resolution.
 The audit works best when the focus is on analyzing and
improving the HR function in the organization.
 The audit itself is a diagnostic tool, not a prescriptive instrument.
It will help you identify what you are missing or need to improve,
but it can’t tell you what you need to do to address these issues.
 It is most useful when an organization is ready to act on the
findings, and to evolve its HR function to a level where its full
potential to support the organization’s mission and objectives can
be realized.

10. Areas of HR audit
 In respect of personnel department –whether the
objectives of the department in procuring suitable
employees ,training & development them ,
formulating suitable compensation plans & reward
system , ensuring effective communication ,
participation , evaluation of performance ,
maintaining cordial relation , resolving conflicts ,
grievance redressal , keeping morale high ,
integrating employees into efficient team was
attained or not .If not attained where are the gaps,
lapses& what corrective measures should be taken
in future
(see the audit questionnaire)

11.  The performance of HRM should be
evaluated against the objectives & strategies
formulated earlier .Each activity of HRM is
assessed by framing suitable questions

12. Org, departmental strategies&
objectives
Set standard performance& strategies
Conduct the audit
•How
•Who
Comparison
Preparation of Audit reports
Corrective action
Audit process

13. How and who does the audit?
 It is generally advisable to get the audit done
by outside person who can objectively
evaluate the performance of HR department .
If it is not feasible them an internal auditor(ie
from within the organization ), a suitable
person can be given the task . He will need to
be trained and can be given a set of
questions which can render to the person
seeking answers

14.  The team works to collect information to
answer the HR audit questions in each of
these categories.
 The focus is on how these activities and tasks
are actually performed in the organization.
 The first step is to collect all the pertinent
information.
 The process of getting information, in itself,
can be quite informative.

15.  Audit reports:
 “ is a comprehensive description of hr
activities that include both commendation for
effective practices & recommendation for
improving practices that are less effective

16.  An hr audit report contains several sections .
One part is for line mangers , another for
mangers of specific function& the final part is
for HR managers
 For the line managers , report summarizes
their objectives, responsibility& duties
 The hr managers report contain all the
information given to both operating
managers& staff specialists

17. HR Research
 Is the analysis of data
from hr records to
determine its
effectiveness of past &
present practices
 Primary vs secondary
 Process of collecting
information , analyzing
information to increase
performance

18.  Academic vs applied
Seeks answers to
contribute to the
existing body of
knowledge
Application oriented research effort.
1. Comparative approach (compare with other
org/ division)
2. Outside authority approach (seek the help of
outside agencies/published research findings)
3. Statistical approach (Team generate statistical
standard against which activities are
evaluated)
4. Compliance approach (data from HRIS)
5. Mbo approach (preset objectives & comapring
the results with that)

19.  Research method/tools:
 Interview
 Questionnaires
 Secondary source data

20. HR performance &
benchmarking
 When information on HR performance has
been gathered it must compared to a
standard , which is a model or measure
against which sth is compared to determine
its performance level .
 HR professionals who do the benchmarking
try to locate org that do certain activities
particularly well & thus become “benchmarks”

21.  Means of obtaining benchmarking data is telephone
calls , which then may be followed up with
questionnaire & site vists to the benchmarking
partners .
 The common benched performance are :
 Total compensation as percentage of net income
before tax
 Percentage of management position internally filled
 Sales per employee
 Benefits as percentage of payroll cost

22.  2 types
 Internal benchmarking,
external benchmarking

23. HRIS
 This is a system used to acquire , store, manipulate
analyze , retrieve & distribute information company’s
HR .
 An integrated system designed to provide
information used in HR decision making
 In adopting HRIS, the following issues need to be
assessed :
 Careful need assessment
 What type& size of HRIS be adopted
 Whether to dev or buy & use the software
 Should be implemented in total or in stages

24.  A computerized HRIS monitor, control & influences
of human being from time from the time they entered
the org till they leave the org
 May contain :
 Recruitment information
 Personnel information
 Manpower planning information
 Health records
 Appraisal information
 Pay roll system

25.  Designing HRIS :
 The type & range of HRIS depend on the nature &
size of the org , preference of the top management ,
need for govt regulation & availability of software
 Steps :
 Preliminary system Analysis
 System Design
 System testing
 System monitoring & evaluation