The document discusses human resource (HR) audits. It begins by defining an HR audit as examining an organization's HR policies, procedures, documentation, systems, and practices. The purpose is to identify strengths and weaknesses in the HR function. Several types of HR audits are described, including compliance, best practices, strategic, and function-specific audits. Common HR functions that may be audited are also listed, such as recruitment, compensation, and training. The benefits of conducting regular HR audits are outlined, such as ensuring legal compliance, improving HR strategies, and streamlining processes. Different methods for conducting audits are provided, like interviews, questionnaires, observation, and analyzing documentation. The summary emphasizes

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-Best HR Practice 2007
-Best HR Practice 2008
-Best HR Practice 2009
Special Achievement Award
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)Sigma
-Best HR Professional 2011
-HR Champion 2012
&AWARDS
ACCOLADES

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HR Audit

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Theory

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HR Audit
“The things that get measured gets managed”

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“.. financial statements on an annual basis, but
professional service firms and organizations complete
an extensive audit of their programmes involving
“people”, such as recruiting, training or pay-for-
performance are seldom given the same scrutiny.”
Purpose of HR Audit

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Example of HR Audit

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Recruitment
How are candidates sourced?
How are candidates selected?
Are legal requirements met?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

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Compensation and Benefits
What are the different policy groups (e.g. management,
clerical, union)?
How is base pay policy set?
What grading/job evaluation systems are used?
Are there up-to-date job descriptions?
What variable pay practices are in place?
How are pay increments decided?
What is the benefits plan?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

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Training and Development
How much training is given?
How is the training program managed?
Are there any staff development programs?
Are the same processes used for all jobs, all locations?
Are processes followed consistently?

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Examining Policy of HR Audit

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The Human Resources (HR) Audit is a process of examining policies,
procedures, documentation, systems, and practices with respect to an
organization’s HR functions.
The purpose of the audit is to reveal the strengths and weaknesses in the
organization's 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

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Objective of HR Audit

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Effectiveness of performance of HR Department
Implementation of HR policies & procedures
To find out the reasons for low productivity and improve HRD Strategies
Evaluation of the HR staffs & employees
 Modify and Review HR system & challenges
 Questioning: To seek answers to : What happened ? Why did it happen?
Why did it not happen?

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Benefits & Frequency of HR Audit

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Benefits Frequency
 Identification of contributions of HR
department
 Helps identify the gaps between the
current state and the standard, thereby
streamlining HR work processes
 Encouragement of greater responsibility
and professionalism among HR members
 Clarification of HR duties and
responsibilities
 Stimulation of uniformity of HR policies
and practices
 Ensuring timely compliance with legal
requirements
 Reduction of HR costs through more
effective personnel procedures
 A thorough review of HR information
systems.
 It is best to have a HR audit once in a year.
The HR audit, if conducted continuously and
regularly, then it becomes a fairly managed
process.
 The chances of drastic corrections become
lower if it is conducted regularly. Usually, the
frequency of the audit being conducted
depends on the company. •
 An ideal audit can be conducted for every 18
months but the management must see to it
that a well efficient audit is done on yearly
basis.

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Types of HR Audit

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Types
 Compliance: Focuses on how well the company is complying with
current federal, state and local laws and regulations.
 Best Practices: Helps the organization maintain or improve a
competitive advantage by comparing its practices with those of
companies identified as having exceptional HR practices.
 Strategic: Focuses on strengths and weaknesses of systems and
processes to determine whether they align with the HR department’s
and/or the company’s strategic plan.
 Function-Specific: Focuses on a specific area in the HR function (e.g.,
payroll, performance management, records retention, etc.)

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Methods of HR Audit

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Individual Interview Method
Top level management and senior managers are interviewed, individually. It helps
in knowing their thinking about future plans and opportunities available for the
company .
Group Interview Method
Group interviews and discussions with the employees and executives of large
companies for HR audit, facilitate collection of information about effectiveness of
existing systems

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Workshop Method
Workshop Methods also known as Large Scale Interactive Process (LSIP) is
conducted in some cases of audit.
Questionnaire Method
Feed back about various dimensions of HRD, including the competency base of
HRD staff, the styles of line managers, the implementation of various HRD
systems, etc are obtained through a detailed questionnaire from individuals or
groups for HR audit. This method helps in benchmarking.

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Observation
The auditors should physically visit the workplace .To assess the extent to which a
congenial and supportive human welfare oriented climate exists in the company.
This is essential because employees are not likely to give their best if they do not
live in good surroundings. The observations can be conducted using a check list of
questions.
Analysis Of Secondary Data
Analysis of secondary data can give an insight into the HRD assets and liabilities of
the company i.e. analysis of age profiles of the employees, training attended, the
minutes of the meetings held etc.

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Analysis Of Reports, Records, Manuals And Other
Published Literature
Published literature of the company including annual reports, marked hand-outs,
training calendar personnel manual, and various circulars issued from time to time
are also likely to help immensely in assessing the strengths and weaknesses of
HRD.

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End

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Briefing about the program for today.
Stage 3
You are promoted as the HR Manager from HR Executive – Recruitment and operation at this
point of time.
Promotion Procedure
Promotion letter designing and redesigning JD
The first responsibility after being a HR Manager is to do a complete PMS process considering
before promotion you and the other 5 employees have worked for 6 months at a stretch.
•Points to be kept in mind so that the PMS process is unbiased.
•Design the feedback forms (360 degree) – rating should be best out of 3.
•Stimulated 1 on 1 session
•Design the bell curve and match it.
•Stimulated environment of rewards and recognition program.
Expansion planning for the next 6 months considering growth of every department to plus 1
and the new JD formation.
Deciding recruitment sources for new hiring keeping the budget and the effectiveness
balanced.