HR AUDIT

PRESENTED BY –1.SUYOG LOHAKARE

(03)2.KIRTI CHOUKIKAR

(20)3.SHIVANGI SAIN

(45)4.AKSHAT MANDLOI

(59)5.SUNEHA GUPTA

(68)

Human Resource Audit is a systematic assessment of the strengths, limitations, and developmental needs of its existing human resources in the context of organizational performance – (Flamholtz, 1987)

1. Objectives

2. Purpose

3. Types

4. What does an audit entail

5. Approaches

6. Auditing process

7. Challenges for HR department – Dave Ulrich

8. Auditing methods

9. Case Study

10. Conclusion

LAYOUT

OBJECTIVES OF AUDIT

1.The audit itself is a diagnostic tool, not a prescriptive instrument2.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.3.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.

Purpose of audit1.To examine and pinpoint strength and weaknesses related to H.R. areas and Skills and Competencies to enable an organization to achieve its long-term and short-term goals.2.To increase the effectiveness of the design and implementation of human resource policies, planning and programs. To help human resource planners develop and update employment and program plans. 3.To insure the effective utilization of an organization's human resources.4.To review compliance with a myriad of administrative regulations.5.To instill a sense of confidence in management and the human resources function that it is well managed and prepared to meet potential challenges.6.To maintain or enhance the organization's and the department's reputation in the community.7.To perform a "due diligence" review for shareholders or potential investors/owners.

TYPES

compliance

Best practice

Strategic

function specific

WHAT DOES AN HR AUDIT ENTAIL ?

1.Legal compliance2.Compensation/Salary Administration3.Employment/Recruiting4.Orientation5.Terminations6.Training and Development7.Employee Relations 8.Files/Record Maintenance/Technology9.Policies and procedures(including employee handbook)

Approaches to Human Resources Audit

Prof. K. Aswathappa has identified the following approaches, which are

adopted for purpose of evaluation:

• Comparative approach

• Outside authority approach

• Statistical approach

• Compliance approach

• Management by objectives (MBO) approach

APPROACHES:

What we infer from these approaches??

The main functions of human resources audit are to take specific actions that will help minimize employee turnover orientation training, working conditions, remuneration and benefits and opportunities for advancement.

Therefore, quality of turnover is more important than the quantity of people leaving and joining the industry. Human resources management should create a work environment to make employee realize that it makes a sense to work in the factory rather than staying at home and waste their time.

AUDITING PROCESS: STEPS IN H.R. AUDIT

STEP ONE: Briefing and Orientation

STEP TWO: Scanning material information

STEP THREE: Surveying employees

STEP FOUR: Conducting interviews:

STEP FIVE: Synthesizing

STEP SIX: Reporting

1. Globalization The H.R department will need to create models and processes for achieving global activeness, effectiveness and competitiveness.

2. Managing the Value Chain for Business Competitiveness.

Innovation Faster Decision Making Price or Value Advantage Effective linking with Suppliers

3. Growth of the organization By increasing customer, acquisition and mergers.

CHALLENGES FOR H.R. DEPARTMENT EIGHT CHALLENGES IDENTIFIED BY DAVE ULRICH (1997)

4. Building organizational capabilities Reviewing existing capabilities New capabilities Aligning new capabilities with business strategies.5. Managing Change Adopting some new H.R. Practices Learning some New Skills and Attitudes Unlearning some existing skills and

Attitudes.

6. Making Technology viable Finding out ways and means to make technology successful. 7. Attracting and Retaining Intellectual Capital Attracting Talented People. Retaining them. Utilizing them suitably. 8. Transforming the Organisation Creating fundamental and lasting changes.  

Develop an understanding of the management system and procedures

Assess the strength and weaknesses of the management systems and procedures

Gather evidence and verify findings

Validate audit findings and exceptions

GENERAL AUDITING METHOD

INDIVIDUAL INTERVIEW METHOD

GROUP INTERVIEW METHOD

WORKSHOP METHOD

QUESTIONNAIRE METHOD

OBSERVATION

ANALYSIS OF SECONDARY DATA

ANALYSIS OF REPORTS, RECORDS, MANUALS AND OTHER PUBLISHED LITERATURE

METHODS OF HR AUDIT

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

INDIVIDUAL 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.

GROUP INTERVIEW METHOD

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: performance appraisal , career planning, job rotation, training, quality circles, induction training, recruitment policies, performance counseling, worker development programmes, and 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?

RELEVANT QUESTIONS THAT ARE ASKED IN INDIVIDUAL AND GROUP INTERVIEWS :

Workshop Methods also known as Large Scale Interactive Process (LSIP) is conducted in some cases of audit.

WORKSHOP 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.

QUESTIONNAIRE METHOD

o The auditors should physically visit the workplace

o To assess the extent to which a congenial and supportive human welfare oriented climate exists in the company.

o This is essential because employees are not likely to give their best if they do not live in good surroundings

o The observations can be conducted using a check list of questions.

OBSERVATION

Analysis of secondary data can give an insight into the HRD assets and liabilities of the company.

Analysis of age profiles of the employees, analysis of the training attended, analysis of the minutes of the meetings held etc., help in determining the assets and liabilities.

ANALYSIS OF SECONDARY DATA

• 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.

ANALYSIS OF REPORTS,RECORDS, MANUALS AND OTHER PUBLISHED LITERATURE

CASE STUDY

IT SECURITY AUDITING

Steps of An IT Audit

1. Planning Phase2. Testing Phase3. Reporting Phase

Entry Meeting

Define Scope

Learn Controls

Historical Incidents

Past Audits

Site Survey

Review Current Policies

Questionnaires

Define Objectives

Develop Audit Plan / Checklist

PLANNING PHASE

Testing Phase

1.Meet With Site Managers

2.Data Collection

3.Types of Data

Long Report After Going Through Data

Intro defining objectives/scope

How data was collected

Summary of problems

Table format

Historical data (if available)

Ratings

Fixes

In depth description

REPORTING PHASE

This Is NOT a Confrontation

Make Your Self Available

Know What The Scope/Objectives Are

Know What Type of Data Will be Collected

Know What Data Shouldn’t be Collected

PREPARING TO BE AUDITED

Audit will give all the necessary information required about finance and performance of the employees

planning phase is very important.

Employees should be available for testing phase

Reports should focus on in depth description of problems

CONCLUSION