ASSIGNMENT

ON

HUMAN RESOURCE AUDIT

Submitted To: Ms. N. Malathi

Faculty HRM,DIAS

Submitted by: Komal Kain

Roll no.-112 MBA-2A

DELHI INSTITUTE OF ADVANCE STUDIES, ROHINI, NEW DELHI

HR/PERSONNEL AUDITDefinition:

HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and

morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization.

According to Seybold,

“HR/Personnel Audit refers to an examination of policies, procedures and practices to determines the effectiveness of personnel management.”

Personnel/HR Audit covers basically 3 things:

1. Measurement and evaluation of personnel programmes, policies and practices;2. Identification of gap between objectives and results; and

3. Determination of what should or what should not be done in future.

Objectives of HR Audit

To insure the effective utilization of an organization’s human resources. To review compliance with a myriad of administrative regulations. To instill a sense of confidence in management and the human resources function that it

is well managed and prepared to meet potential challenges. To maintain or enhance the organization’s and the department’s reputation in the

community. To perform a “due diligence” review for shareholders or potential investors/owners. To find out the proper contribution of the HR department towards the organization. Development of the professional image of the HR department of the organization. To review the organizational system, human resources subsystem in order to find out the

efficiency of the organization in attracting and retaining human resources. To find out the effectiveness of various personnel policies and practices. To know how various units are functioning and how they have been able to implement

the personnel policies.

To review the personnel system in comparison with organizations and modify them to meet the challenges of personnel management.

Need for Personnel/HR Audit

Increasing size of the organization and personnel in several organizations. Changing philosophy of management towards human resources. Increasing strength and influence of trade unions. Changing human resources management philosophy and thereby personnel policies and

practices throughout the world. Increasing dependence of the organization on the human resources system and its

effective functioning. Changing managerial philosophy, which has come to regard employee’s participation and

identification as having a powerful influence on motivation of employees at work for the success of the organization, has recognized the need for human resource audit.

As an organization grows the need for such an audit increases. A continuous feedback is necessary to improve, for example, the performances of the personnel and this is possible only by the way of human resource audit.

Expansion of unions of employees and of bilateral determination of employment policy with frequent criticisms of managerial competence has made it necessary to conduct human resource audit.

Rapidly raising wages and salaries, with higher labour costs and greater opportunities for competitive advantage in the management in the management of people is another cause which compels management to conduct human resource audit.

The changing mixture of skills with growing proportions of technical and professional workers, who present more difficult managerial problems, has also made it essential for the management to use human resource audit.

Benefits of HR Audit:

It provides the various benefits to the organization. These are:

It helps to find out the proper contribution of the HR department towards the organization.

Development of the professional image of the HR department of the organization.

Reduce the HR cost.

Motivation of the HR personnel.

Find out the problems and solve them smoothly.

Sound Performance Appraisal Systems. Systematic job analysis.

Smooth adoption of the changing mindset.

Identifies the contributions of the HR department.

Encourages greater responsibility and professionalization among members of HR department.

Finds critical personnel problems.

Ensures timely compliances with legal requirements.

Stimulates the uniformity of personnel policies and practices.

Classifies the HR departments’ duties and responsibilities.

1. Getting the top management to think in terms of strategic and long-term business plans: It may sound ironical that the HRD audit should begin with such strategic plans, but in some cases, it has compelled the top management to think about such plans. While some companies started thinking about them, a few others started sharing these plans with a larger number of persons. Since the employees cannot participate in an HRD audit without some sharing of these plans, the audit has forced the top management to share their plans which has resulted in increased employee involvement. In a few cases a new system of annual planning and sharing of business plans with the management staff have been initiated to enable them plan their own activities and competency development programmes.

2. Clarifying the role of the HRD department and line managers in HRD: In almost all cases, the HRD audit has been found to draw the attention of employees at various levels to the important role of the HRD department in current as well as the future. Enhanced role clarity of HRD department and HRD function and increased understanding of line managers about their HRD role have been the uniform results of HRD audit. The degree may vary from organization to organization depending on other factors.

3. Streamlining of other management practices: Most often HRD audit identifies the strengths and weaknesses in the some of the management systems existing in the organization. It also points out to the absence of systems that can enhance human

productivity and utilization of the existing competency base; for example, the MIS, rules and procedures, etc. which may have an effect on the functioning of the employees. In a few cases an HRD audit has helped the management look at some of these sub-systems and work procedures. Preparation of a manual of delegation of powers, clarification of roles and responsibilities, developing or streamlining the manuals of financial and accounting procedures and systems, strengthening the information systems, and sharing of information are some of the resultant activities in this direction.

4. Better recruitment policies and more professional staff: An HRD audit points out to the competence base required. It sets the stage and gives direction for the competency requirements of employees at various levels and thus provides a base for recruitment policies and procedures. In some companies, it has resulted in strengthening the recruitment policies and procedures. As a result of HRD audit, new recruitment and retention strategies have been worked out.

5. Changes in the styles of top management: One of the objectives of HRD is to also create a learning organization. A learning culture can be created only if the top managers of the company exhibit an HRD style of management. Such a style requires an empowering attitude, participative style of management, and an ability to convert and use mistakes, conflicts and problems as learning opportunities. Some of the top-level managers in India have been found to block employee motivation and learning through coercive, autocratic and even paternalistic styles of management. In such cases the HRD audit has pointed out the difficulties in developing and preparing the employees for the future. This has helped to provide subtle feedback to the top management and to initiate a change process.

6. Improvements in HRD systems: The HRD audit has helped most of the organisations in taking stock of the effectiveness of their HRD systems and in designing or re-designing the HRD systems. The most frequently changed or renewed systems include performance appraisal, induction training, job-rotation, career planning and promotion policies, mentoring, communication, and training.

7. More planning and more cost-effective training: HRD audits have been found to raise questions about the returns on training. One of the aspects emphasized in the HRD audit is to calculate the investments made in training and ask questions about he returns. The process of identifying training needs and utilization of training inputs and learning for organisation growth and development are assessed. As direct investments are made in training, any cost-benefit analysis draws the attention of the top management and HRD managers to review the training function with relative ease. One organization strengthened its training function by introducing a new system of post-training follow-up and dissemination of knowledge to others through seminars and action plans. Many

organisations have developed training policies and systematized their training function. Assessment of training needs has also become more scientific in these organisations.

8. Increased focus on human resources and human competencies: One of the results of an HRD audit is to focus on new knowledge, attitudes and skills required by the employees in the organization. Comments are made about the technical, managerial, human and conceptual competencies of the staff at various levels. This differentiation has been found to help organisations identify and focus sharply on the competency requirements and gaps. The audit establishes a system of role clarity and fixing of accountabilities. This can take place through separate role clarity exercises or through the development of an appropriate performance appraisal system. In any case the attention of the organization gets focused on developing the competency base of the organization. More sensitivity is developed to the missing aspects of competencies. For example, one organization has been found to neglect human relations competencies of their staff, resulting in a large number of human Problems leading to wastage of time. Some of these got streamlined and various HRD policies also got strengthened.

9. Strengthening accountabilities through appraisal systems and other mechanisms: An HRD audit can give significant inputs about the existing state of the accountabilities of employees. This gets assessed through performance appraisals as well as through the work culture and other cultural dimensions. A number of organisations have introduced systems of performance planning, sharing of expectations and documenting the accountabilities of staff.

10. TQM interventions: Quality improvements and establishing TQM systems require a high degree of employee involvement. In a number of cases the HRD audit has pointed out to the linkages between TQM and other developmental programmes and helped in strengthening the same. Due to improvements in the training system, group work and appraisal systems, TQM programmes have also improved. In a few organisations the performance appraisals have been so changed as to integrate quality aspects and internal customer satisfaction dimensions into the appraisal system. Thus, an HRD audit leads to the strengthening of the quality systems.

The HR manager is himself interested in knowing the effectiveness of HR department. It is not that the department is infallible. Errors do happen, procedures and practices become outdated. By auditing itself, the department finds the problems before they become serious. If done correctly, the audit process can build a strong rapport between department and operating managers, and it can reveal outdated assumptions that can be changed to meet department’s objectives and future challenges.

Types of HR/Personnel Records

Job application and test scores Job description and job specification

Interview results

Employment history

Medical reports

Attendance records

Payroll

Employee ratings

Training records

Leave records

Accident and sickness records

Grievances, disputes records

Contracts of employment

Records to be kept under various statutes.

Scope of Audit:

Generally, no one can measure the attitude of human being and also their problems are not confined to the HR department alone. So it is very much broad in nature. It covers the following HR areas:

Audit of all the HR function. Audit of managerial compliance of personnel policies, procedures and legal provisions.

Audit of corporate strategy regarding HR planning, staffing, IRs, remuneration and other HR activities.

Audit of the HR climate on employee motivation, morale and job satisfaction.

In order to conduct HR audit, HR manager requires considerable amount of data . To conduct meaningful HR audit information on following human resource functions is necessary:

1) Procurement Function

a)      In inventory present and future needs for manpowerb)      Reliable performance standardc)      Possible change affecting manpowerd)      Location and matching of required and available skillse)      Valid measure for testing and selectionf)       Cost of requirement and replacement

2) Development Function a)    Valid measure of employee performanceb)    Cost benefit calculation on training and developmentc)    Linkage between individual aspirations and organizational needs.d)    Career and succession planning.

3) Compensation Function a)    Linkage between wages and productivityb)    Impact of money on work motivation of employeec)    Employee cost in term of turnoverd)    Effect of inflation and technology on wages label and productivitye)    Value of collective bargaining and fringe benefit programmes to the

organization.

4) Maintenance Function a)    Absenteeism, turnover, accidents, grievance disciplines, man-days lost and

other indicator of organizational healthb)    Environmental standards for physical and mental health of the employees.c)    Causes and cost of employee separationd)    Incentives for voluntary separation, if necessary.

5) Integration Function a)    Communication and leadership climate in the companyb)    Adoption to environmental changec)    Causes of changes in productivity leveld)    Impact of change in technology and market.

The persons in charge of auditing should examine the effectiveness of the HR function by raising the following issues:

o Identify who is responsible for each activity.o Determine the objectives sought by each activityo Review the policies and procedures used to achieve those objectives.o Sample the records in the HR information system to learn if the policies and

procedures are being followed correctly.o Prepare a report commending proper objectives, policies, and procedures.o Develop an action plan to correct errors in objectives, policies and procedureso Follow up on the action plan to see if it solved the problems found through the

audit.Obviously, audits are time-consuming. As a result, small firms use ad hoc arrangements that often limit the evaluation to selected areas. Very large organizations have audit teams

similar to those used to conduct financial audits. These teams are especially useful when the department is decentralized into regional or field offices. Through the use of audits, the organization maintains consistency in its practices even though there are several offices in different locations. And the mere existence of corporate audit team encourages compliance and self audits by the regional offices between visits.

HR/Personnel Audit--Areas and Levels

Major Areas Levels & Examples of Audit DataLevel I-Results Level II-Programmes

& ProceduresLevel III-Policy

Planning: Forecasting & Scheduling to meet organization & needs.

Personnel shortages supplies, layoff, etc.

Time bound or network cost/benefit budget, etc.

Explicit statement to provide inclusive personnel plans for present & future.

Staffing & Development: Defined requirements & careers; sources, requirement, selection, training, promotions

Recruitment times costs; training times cost, labour turnover etc.

In house & out house training programmes; guidance in careers, etc.

Let cream rise; non-discrimination, etc.

Organizing: Maintaining structures for coordinating, communicating, collaborating, etc.

Feedback, reader interest, extent of formal, organization, reports, records, etc.

Job definitions for individuals, departments, task forces, house organs, etc.

Encourage flexibility, reduce resistance to change, effective 3-way communication, etc.

Motivation & Commitment: Individual & group motivation, interest, effort, contribution

Productivity, performance norms comparative costs, etc.

Job enlargement; wage & salary administration; morale survey; exit interviews; fringe benefits, etc.

Gain high personal identification, ensure wholeman satisfactions.

Administration: Style of leadership and supervision; delegation, negotiation.

Suggestions, Promotions, grievances, discipline, union-management cooperation.

Consultative supervision; collective bargaining, union-management committees, etc.

Style adapted to changing expectations; participative involvement, collective bargaining, etc.

Research & Innovation: Changes, R&D approach in all Test old & new

Experiments & theory testing in all areas.

experiments, research reports, publications.

areas; suggestion plans, etc.

theory; encourage creativity in management.

Approaches to HR Audit:

There are five approaches for the purpose of evaluation of HR in any organization:

Comparative approach Outside authority

Statistical

Compliance approach and

Management By Objectives(MBO)

Comparative approach :-In this, the auditors identify Competitor Company as the model. The results of their organization are compared with that of the Model Company/ industry.

Outside authority approach:-In this, the auditors use standards set by an outside consultant as benchmark for comparison of own results.

Statistical approach:-In this, Statistical measures are performance is developed considering the company’s existing information.

Compliance approach:-In this, auditors review past actions to calculate whether those activities comply with legal requirements and industry policies and procedures.

Management by objectives (MBO) approach:-This approach creates specific goals, against which performance can be measured, to arrive at final decision about industry’s actual performance with the set objectives.

AUDITING PROCESS

The HR audit process is conducted in different phases. Each phase is designed to build upon the preceding phase so that the organisation will have a very strong overview of the health of the HR function, at the conclusion of the audit. These phases include:

1. Pre-Audit Information: This phase involves the acquiring and review of relevant HR manuals, handbooks, forms, reports and other information. A pre-audit information request is forwarded to the client who compiles the necessary information for review by auditors.

2. Pre-Audit Self-Assessment: In order to maximize the time spent during subsequent portions of the audit, a pre-audit self-assessment form, if sent to the client can be of use. The self-administered yes/no questionnaire asks a number of questions about current HR policies and practices. The completion of this self-administered questionnaire allows auditors to identify key areas for focus during the HR audit.

3. On-site Review: This phase involves an on-site visit at the client’s facility interviewing staff regarding HR policies and practices. A very in-depth HR audit checklist is completed.

4. Records Review: During the on-site visit, a separate review is conducted of HR records and postings. Employee personnel files are randomly examined as well as compensation, employee claims, disciplinary actions, grievances and other relevant HR related information are checked.

5. Audit Report: The information gathered is used to develop an HR audit report. The audit report categorizes action needs into three separate areas. The areas that are urgent and important (UI), not urgent needs but important (NUI), not urgent but not important needs (NNI)), and important opportunities needs (IO). As a result of this scheme of classification, managements can prioritize their steps.

6. The critical areas: The comprehensive HR audit covers all areas of HR management like recruitment practices, training and development, compensation and benefits, employee and union relations, health, safety and security, miscellaneous HR policies and practices-welfare, strategic HR issues, manpower planning/budgeting. Besides classifying needs in each of the above areas, the HR audit also cites relevant laws, cases and research to support the recommendations.

7. Preparation for an audit Auditor engagement: If external firm carrying out the audit, it is preferable to set terms in writing defining and agreeing on scope .If using internal resource it is better to appoint them formally with clarity on scope and select persons who are non political or those who

are not high on hierarchy. Also, if internal persons are auditing there must be training in auditing.

Documents, manuals, handbooks, forms and reports auditor must have access to relevant information contained in employee files and other confidential documents of the organization. Auditors must be given unrestricted access to records, once they sign agreement for confidentiality.

8. Data gathering: Completion of a self-assessment questionnaire significantly expedites the audit process and allows for better audit planning.

9. On-site access: The on-site portion of the audit is the most critical.

10.Using audit findings: How does an organization use HR audit results? Since the HR audit results are classified, an important aspect is already taken care of. Critical needs should be the first ones to be addressed. Organizations generally have three options for dealing with audit results.

a. Use the HR audit as a blueprint or action plan for addressing HR needs.b. Address as many needs as possible using the organization’s internal expertise

and resources.c. Contract out those need areas where internal expertise and resources are not

available or do not fit in the core competencies of the organization.

An HR audit is much like an annual health check. It can perform the same function for the organization. An audit is a means by which an organization can measure where it currently stands and determine what it has to accomplish to improve its HR functions. It involves systematically reviewing all aspects of human resources, usually in a checklist fashion, ensuring that the government regulations and company policies are being adhered to. The key to an audit is to remember that it is a tool to discover and not to test. There will always be room for improvement in every organization.

METHODS OF H.R. AUDIT

I. INDIVIDUAL INTERVIEW METHOD:

Top level management and senior managers are interviewed, individually. It helps in following:

Knowing their thinking about future plans and opportunities available for the company.

Knowing about their expectations from the HR Audit.

Getting sensitive information pertaining to working styles and culture.

Union leaders, departmental heads, some strategic clients and informal leaders are also interviewed, individually.

In case of small companies, manned by professionals, interviews can be extended with selected employees from different levels and functions.

II. GROUP INTERVIEW METHOD:

Group interviews and discussions with the employees and/or executives of large companies for HR Audit, facilitate collection of information about effectiveness of existing systems.

Composition Of Group:

Ideally, the group should be of 4 to 8 persons.

Group should consist of same or similar level of employees from cross functional areas.

In case of large organization, group interviews for each functional area can be conducted, separately.

Relevant Questions That Are Asked In Individual And Group Interviews :

What do you see as the future growth opportunities and business directions of the company?

What skills and competencies does the company have which you are proud of?

What skills and competencies do you need to run your business, or to perform your role, more effectively at present?

What are the strengths of your HRD function?

What are the areas where your HRD function can do better?

What is good about your HRD subsystems, such as:

o Performance appraisal,

o Career planning,

o Job rotation, training,

o Quality circles,

o Induction training,

o Recruitment policies,

o Performance counseling,

o Worker development programmes, and

o HRD departments?

What is weak about them? What can be improved?

What changes do you suggest to strengthen HRD in your company?

What do you think are the ways in which line managers can perform more developmental roles?

III. WORKSHOP METHOD:

In some cases of H.R. Audit, instead of Individual and Group Interviews, Workshop Methods i.e. Large Scale Interactive Process (LSIP) is conducted, as under:

30 to 300 participants can be asked to gather in a room.

They are divided in small groups.

They are asked to work either around Systems, Subsystems or around different dimensions of HRD and do SWOT Analysis.

All the groups thereafter give presentations.

The H.R. Auditor compiles the views of all groups, makes own observation, conclusions and prepares a report.

The H.R. Auditor announces the audit Results before submitting the report to top Management.

LSIP WORKSHOP FOR HRD AUDIT ON PERFORMANCE APPRAISAL SYSTEM

RELEVANT QUESTIONS THAT HAVE BEEN ASKED IN ONE OF THE HR AUDIT CONDUCTED BY Dr. T.V. RAO:

What are the three good things in your performance appraisal system?

What is the one thing you would like to change in your performance appraisal system?

How would you critically evaluate the job rotation in your company?

What are the strengths and weaknesses of your training policies and practices?

What three objectives would you use to describe the promotion policies as they exist in your company?

IV. 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 H.R. Audit. This method helps in benchmarking.

The process is as follows:

Detailed questionnaire is prepared by H.R. Auditor.

Individuals or groups are asked to assemble in a room or hall are explained the objective and process of HR Audit. They are then given questionnaires.

They submit the questionnaire, duly filled in, to the HR Auditor.

The HR Auditor compiles the feedbacks, makes observations, conclusions and recommendations.

Audit Results are informed to the Participants before the report is submitted to the top management.

Audit Reports

The audit report is a comprehensive description of HR activities that includes both commendations for effective practices and recommendations for improving practices that are less effective. Recognition of both good and bad practices is more balanced and encourages wider acceptance of the report. An audit report contains several sections. One part is for line managers, another is for managers of specific HR functions, and the final part is for the HR managers. For line managers, the report summarizes their HR objectives, responsibilities and duties. Examples of duties include interviewing applicants, training employees, evaluating performance, motivating workers, and satisfying employee needs. The report also identifies people’s problems. Violations of policies and employee relations laws are

highlighted. Poor management practices are revealed in the report along with the recommendations.

The specialists who handle employment, training, compensation, and other activities also need feedback. The audit report they receive isolates areas of good and poor performance within their functions. For example, one audit team observed that many jobs did not have qualified replacements. This information was given to the manager of training and development along with the recommendation for more programs to develop promising supervisors and managers. The report may also provide other feedback such as attitudes of operating managers about the HR specialists’ efforts.

The HR manager’s report contains all the information given to both operating mangers and staff specialists. In addition, the manager gets feedback about:

a) Attitudes of operating managers and employees about the department’s benefits and services.

b) A review of the departments’ objectives and plans to achieve them.

c) HR problems and their implications.

d) Recommendations for needed changes and the priority for their implementation.

With the information contained in the audit report, the HR manager can take a broad view of the function. Instead of solving problems in a random manner, the manager can focus on those which have the greatest potential for improving the department’s contribution to the organization. Perhaps the most important, the audit serves as the map for future efforts and a reference point for future audits. With knowledge of the department’s current performance, the manager can make long term plans to upgrade crucial activities. These plans identify new goals for the department, which serve as standards for future audit teams.

The objectives of the audit report are: To highlight areas that needs improvement. To be acted upon.

The purpose of preparing the audit report is to help the top management and the HRD staff to recognize and retain the company’s strengths.

Following points are to be remembered for writing an audit report: Simple language should be used. It should be short and precise.

Bullet form highlighting the strengths and weaknesses should be used.

Content HR Audit Report:

Chapter 1 – INTRODUCTION: This will include a brief description about:

Company locations, products and services, manpower, turnover, and main concerns and top management.

Date and reason for undertaking the audit. Methodology adopted for the study: details of samples, and

audit methods used: Questionnaires administered, Number of individual interviews, Level-wise records and reports examined, Group interviews, etc.

HRD SYSTEMS (various sub-systems of HR audit; etc.)

Chapter 2 - CURRENT STATUS OF THE HRD FUNCTION: This will include details about HRD functions:

Structure and staffing of HRD function, HRD department’s thrust areas and objectives, Highlights of existing HRD systems and sub-systems:

Performance appraisal, Potential appraisal, Career planning, Mentoring, Training, Job rotation, Quality circles, etc.

Strengths and weaknesses of the HRD function. HRD needs: an overview – broad highlights of the areas that need attention.

Chapter 3 - GENERAL OBSERVATIONS: General observations will include:

Salient features of the company observed by the auditors’ vis-à-vis present competencies and future potential, encompassing following dimensions of HRD:

Competence Building, Culture Building, Commitment Building.

Present and future business concerns – highlights Competencies and competency requirements for future, Commitment and motivational patterns, Work culture and organizational culture, Culture-building mechanisms

Chapter 4 - CAREER SYSTEMS: This chapter will include Findings of the audit on the following and Importance of the following including the Strengths, Weaknesses and Recommendations of each:

Manpower planning and utilization Recruitment Potential appraisal and fast track Career planning and development Succession planning

Chapter 5 - WORK PLANNING: This chapter will include the Strengths, Weaknesses and Recommendations of each related to work planning system:

Introduction (Concept of work planning and the component of systems) Contextual analysis Role clarity Performance appraisal system

Chapter 6 - DEVELOPMENT SYSTEM: This chapter will include the Strengths, Weaknesses and Recommendations of each related to development system:

Introduction and components Induction training Training and learning systems Performance guidance and development Worker development

Chapter 7 - SELF-REENEWAL SYSTEM: This chapter will include the Strengths, Weaknesses and Recommendations of each related to self renewal system:

Introduction Role efficacy Organisation development Action oriented research

Chapter 8 - HRD CULTURE: This chapter will include the Strengths, Weaknesses and Recommendations of each related to HRD culture:

Introduction HRD culture Values Quality orientation Rewards and recognition Information Communication Empowerment through participation, decentralization, shop floor committees

Chapter 9 - HRD FUNCTION: This chapter will include the Strengths, Weaknesses and

Recommendations of each related to HRD function: General observations Industrial relations and HR Personnel policies and HRD HRD function – structure HRD department – competencies HRD strategies HRD activities and priorities

Chapter10 - TABLE AND APPENDICES

Difference between Human Resource Audit and Human Resource Accounting:

1. The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization’s HR functions. They define HR Accounting as the measurement and reporting of the cost and value of people in organizational resources.

2. The purpose of the audit is to reveal the strengths and weaknesses in the organisation’s human resources system, and any issues needing resolution while accounting furnishes cost/value information for making management decisions about acquiring, allocating, developing, and maintaining human resources in order to attain cost-effectiveness.

3. The audit works best when the focus is on analyzing and improving the HR function in the organization while accounting allows management personnel to monitor effectively the use of human resources;

4. The audit itself is a diagnostic tool, not a prescriptive instrument. It will helps to identify what you are missing or need to improve, and it may even tell you what you need to do to address these issues while accounting indicates whether the processes are adding value or enhancing unnecessary costs.

5. HR Audit aims at identification of the contributions of the HR department to the organization,. HRA aims at measuring the performance of the HR function .

HR AUDIT Inc.

Introduction:

HR Audit, Inc. has been providing human resources, management practices and organizational development services since 1998. While located near Milwaukee, Wisconsin, HR

Audit, Inc. provides services to companies nationally, from Radisys Corp. near Portland, OR to Monster.com in Maynard, MA.

Co-founder and managing director Jim Bastian has 18 years of senior management experience including serving as senior vice president and officer of a Fortune 50 company. He also served as a member of a post-acquisition assimilation team during an aggressive growth period involving over a dozen transactions. Holding an undergraduate degree in psychology/education and an MBA, Jim serves as company's senior auditor. He is a frequent speaker on managing change, conflict, and diversity and performance accountability. The audit staff has a minimum of 12 years of senior management experience, has conducted dozens of audits and has an advanced degree in a related field.

Services:

As the name implies, they specialize in providing comprehensive Human Resources and Management Practices Audits. They also help clients find solutions to Organizational Development Challenges like reducing administrative and employment related costs, post merger/acquisition assimilation, talent retention and succession planning, workforce diversity, regulatory compliance, conflict resolution and change management and we design, develop and deliver customized, interactive Management/Supervisor Training programs. Their confidential audit/assessment process includes interviews with senior managers, focus groups, attitudinal surveys, review of policies and procedures, internal records, employment data, resources, staffing and processes.

Audit Areas:

Strategic plan implementation, Training, Affirmative action, Regulatory compliance, Turnover data/retention, Compensation Policies, Performance appraisal process, Job descriptions , Employee handbook, The employment process, Change readiness, Communications and Administrative staffing levels.

Audit Training:

HR Audit, Inc. trainers are uniquely qualified to help human resource department heads and internal auditors conduct more thorough, expedient and valuable human resource audits. While they often customize programs to meet specific client needs, training typically is designed around one of the following three options.

OPTION ONE:  consists of a 3 ½ hour training program at your site on how to conduct a human resources or organizational audit, efficiently, expediently, objectively and thoroughly. This training program includes a PowerPoint, handouts and templates needed for conducting internal audits. At the end of the session, participants will have a template to use for auditing human resource functions, instruction on sample selection, review and analysis processes, regulatory requirements and best practices that should be included, and other information necessary to

conduct internal HR audits. Cases, examples, situational analysis and other activities are incorporated to ensure a “hands on” learning experience. Questions are always welcome thorough out.

OPTION TWO:  goes beyond the classroom and includes an audit of one of your locations, (typically your corporate site)conducted by your organization’s internal auditor(s) the HR Director and/or his/her designee(s) using an audit process template we provide and with an HR Audit, Inc. auditor on-site providing guidance, direction and coaching.  This option typically takes 2 days on-site. At the conclusion of the second day, you will have gone through a full audit process, have the data, sample results, and all other information and materials needed to draft an audit report/summary and the experience of having completed an audit prior to “soloing”.

OPTION THREE:  consists of HR Audit, Inc. completing an audit of one location while representatives of your organization look on and participate as appropriate This process facilitates the collection of vital information that is often not available to internal auditors, frees participants to address work demands while learning and while the audit process continues and results in your receipt of a complete written audit report which is followed by a presentation and de-brief on your site with the HR Audit, Inc. auditor.

HR Audit, Inc. will provide quotes upon request. All prices quoted are “not to exceed” figures and will include all costs.  Options two and three also include unlimited telephone support for 12 months following the on-site visit to answer questions, provide recommendations or simply serve as a sounding board.

Related Questions:-

1. Difference between Human resource Audit and Human Resource Accounting. How do these help in giving strategic advantage to organizations.[HRM May-June-2009 Q:-5]

2. What is human resource audit? Describe its objectives and significance.3. Discuss the purpose and scope of HR audit.4. State the benefits of HR audit5. What are the contents of a HR audit? Give ur comments upon such a repost you

have read recently.6. What is HR audit and HR audit report?[May-2010 Q:-1(f)]7. Explain the issues and challenges involved in HR audit.8. Discuss the role of HR audit in business promotion.9. Discuss the applications of HR audit in business improvements.10. What are the various phases included in HR audit process?11. What is the role of HR manager in Preparing HR audit report?12. Explain the different types of instruments involved in HR audit?13. Explain how balanced score card is used in HR audit.

References:

Books:

William.B.Werther and Keith Davis, Human Resource Management and Personnel Management, 5th edition, McGraw-hill, 1996.

K. Aswathappa, Human Resource Management and Personnel Management, 4th edition, McGraw-hill, 2006.

V.S.P. Rao, Human Resource Management, 2nd Edition

Websites:-

http://www.humanresources.hrvinet.com/benefits-of-hr-audit/ http://www.slideshare.net/gajendrakhare/hr-audit-for-organisations-2127332

http://www.hrmnotes.com/hr-audit

http://www.citehr.com/16449-hr-audit-notes.html www.hraudit.com