this presentation explains about Human Resource Development Audit.

1. HRD AUDIT

2. Introduction
• With increasing global competition, it has become difficult for organizations to start,
survive, grow, stabilize and excel their performance in business.
• They are under tremendous pressure to improve their performance quantitatively and
qualitatively with cost effectiveness.
• The business environment is rapidly changing. It has become necessity to keep pace
with the changing environment otherwise they will be thrown out of business by
market forces.
• The challenges faced by business organization are how to improve profitability, tune
products and services as per changing need of customers and organizational
development to stay in competitive race of business.
• Now the tasks of framing rules, regulations and standing orders have been changed to
promote the motivation generating factors and minimize the de-motivating factor for
maximum capacity utilization.
• All these activities were clubbed together under umbrella of Human Resource
Development. Though Human resource development is not new in developed nations,
it is relatively neglected in the developing nation.

3. Meaning of Human Resource Development
• It can be defined as a set of systematic and planned activities designed by an
organization to provide its members with the opportunities and facilities to
learn necessary skills and develop competencies to perform the current jobs
and prepare them for further jobs also.

4. Definition of HRD
• In opinion of Khan, “HRD is the process of increasing knowledge, skills,
capabilities and positive work attitude and value of all people working at all
levels in a business undertaking.”
• Nadler defined, “HRD mean an organized learning experience, within a time
frame, with an objective of producing the possibility of performance change.”
• According to Rao, in the organizational context, “HRD is a process in which the
employees and an organization are continuously helps in a planned manner to:
(a) Acquire or sharpen their capabilities.
(b)Develop their general capabilities as individuals.
(c) Develop organization culture.”

5. HRD Myths
• HRD means training
• HRD means promotions
• HRD means fat salaries
• HRD means planning the career of people
• HRD means rewards
• HRD means having a good time
• HRD depends on the top management
• HRD is the job of the HRD department alone

6. HRD Realities
• HRD means learning
• HRD means self development
• HRD means creating new development tools and their use
• HRD means accountability
• HRD means more initiative, team work & collaboration
• HRD means trusting and trustworthiness and creation of a trusting
environment
• HRD means autonomy & experimentation
• HRD means effort.

7. Concept of HRD Audit
• HRD audit is a comprehensive evaluation of the current human resource development
strategies, structure, systems, styles and skills in the context of the short and long-
term business plans of a company.
• HRD audit attempts to find out the future HRD needs of the company after assessing
the current HRD activities and inputs available.
• “The methodology of evaluating various elements of HRD and providing a balance
sheet of the strengths and weaknesses of HRD practices in the organization.” – (Rao,
1990)
• “An evaluation of the organization's operational HR policies, practices and processes
with a focus on key HR department delivery areas (e.g., recruiting—both internal and
external, employee retention, compensation, employee benefits, performance
management, employee relations, training and development).
• A review of current HR indicators (e.g., number of unfilled positions, the time it takes
to fill new position, turnover, employee satisfaction, internal grievances filed, number
of legal complaints, absenteeism rates).” SHRM 2016

8. HRD Audit Questions
• Where does the company want to be in 10 years from now and one year from now ? -
Business Linkage Score
• What is the current skill base of the employees in the company in relation to the
various roles and role requirement? - Competency Score
• What are HRD sub System available today to help the organization build its
competency base for the present, immediate future and long term goals? - System
Maturity Score
• What is the current level of effectiveness of these system in developing people and
ensuring that human competencies are available in adequate levels in the company? -
System Maturity Score
• Is the HRD structure existing in the company adequate enough to manage the HRD in
the company?- Competency Score
• Are the top and senior manager styles of managing people in tune with the learning
culture? - HRD Culture score

9. HR and HRD Audit
• To Audit four pillars of HR
1. Business Linkages through Strategy
2. Styles & Culture
3. Structure & Competencies
4. Systems

10. Why HRD Audit?
• To make HR function Business Driven,
• To take stock of things and to improve HRD for expanding diversifying and
entering into a fast growth pace,
• For promotion of professionalism among employees and to switch over to
professional management,
• Multinational want to know the reason for lower labor productivity and for
improving their HRD strategies in India,
• For growth and diversification,
• Dissatisfaction with a particular component,
• Change of leadership

11. Role of HRD Audit
• It can get the top management to think in terms of strategic and long term business
plans.
• Change in the style of the top management.
• Role clarity of HRD function and the role of line manager in HRD.
• Improvement in HRD system.
• Increase focus on human resource and competencies.
• Better recruitment policies and more professional staff.
• More planning and more cost effective training.
• Strengthening accountability through appraisal system and other mechanisms.
• Streamlining of other management practices.
• TQM interventions.
• It can enhance the ROI, return on investment of the HR function.

12. Methodology of HRD Audit
Individual Interviews
Group Interviews
Workshops
Questionnaire Method
Analysis of Secondary Data
Analysis of Reports, Records, Manuals
and other Published literature

13. Methodology 1- Individual Interviews
• Interview with the CEO & Top Management
• Interview with the HRD Chief
• Interviews with Line Managers
• Interviews with workers and their representative
• Group Interviews

14. Methodology 2- Observations
• Observation is the way to look at the things as they exist
1. Physical facilities and living conditions
2. Meetings, discussion and other transactions.
3. Celebration and other events related to organization life and culture.
4. Training and other HRD related facilities including the class rooms, library,
training center etc.
5. Forms and formats, reports, manual etc.

15. Methodology 3- Questionnaire
• Item wise analysis
• Dimension wise analysis
• Mapping the HRD practices profile
• HR climate surveys
• Training effectiveness questionnaire
• Performance planning, analysis and development

16. HRD Audit Report (1)
• A major outcome of HRD audit is HRD audit report.
• It is important to stress here that it is not a research report, rather it is meant
to suggest areas of improvement in firm in light of its assessment of HRD
functions involvement in achieving business strategy.
• Generally the contents of HRD audit report are:

17. HRD Audit Report(2)
• General Observation

18. HRD Scorecard
• T.V. Rao (1999) introduced this approach termed as the concept of HRD
scorecard.
• This scorecard measures the maturity level of HRD of any organization by taking
into account the following factors.
• Based on HRD audit, a score is assigned to each dimension indicating the level of
effectiveness of HRD in relation to the four dimensions:
1. HRD system maturity: well developed HRD system.
2. HRD competencies of employees including HR department
3. HRD culture of any organization: HRD tools, staff and styles convey values to
the employees which build a sustainable culture in the organization.
4. HRD influence on business goals or business linkages of HRD: This score
implies how well the HRD systems, competencies are aligned with business
goals and are crucial component in gauging HRD effectiveness.

19. HRD Scorecard

20. HRD Scorecard Assumptions
• Competent and motivated employees provide quality products and service to
maintain customer satisfaction
• Competencies and commitment can be enhanced through appropriate HRD
interventions
• HRD competencies play critical role in system implementation to ensure
customer connection, satisfaction and competence building.
• HRD culture, values, staff, tools and styles play critical role in building
sustainable competencies
• HRD systems, competencies and values should be aligned with overall
business goals and strategy.

21. Limitation of HRD Audit
• The unit heads get defensive once the results are not good
• Auditors become victim of the politics when the people gets divided into groups
with polarization
• Failure of implementation once the results are positive or above average
• Sometimes it also used against HR function to get rid of people
• HRD audit has reflection on the system & policies and not on individuals