Q1. Define Human Resource (HR) Audit. Explain the need or HR Audit. What are the benefits of HR Audit?Definition of HR Audit Need for HR Audit Benefits of HR AuditAnswer:Definition of HR Audit Human resource audit is a systematic assessment of the strengths, limitations, and developmental needs of its existing human resources in the context of organisational performance. (Flamholtz,1987).Human resource audits give an account of the skills, abilities and limitation of its employees. The audit of non-managers are called skills inventory while the audit of managers are called management inventories. Basically, the audit is an inventory that catalogues each employee’s skills and abilities which enables the planners to have an understanding of the organisation’swork force. (William B. Werther, Jr. and Keith Davies).Need for Human Resource Audit To make the HR function business-driven. Determining change of leadership. To take stock of things and improve HRD for expanding, diversifying and entering into a fast-growth phase. For growth and diversification. For promoting professionalism among employees and to switch over to professional management. To find out the reasons for low productivity and develop HRD strategies to address that. Dissatisfaction with a particular component. UNCLEAR To become employer of choice or revamping employer branding. To ensure effective utilisation of human resources. To review compliance with laws and regulations. To instill a sense of confidence in the human resource department that it is well-managed and prepared to meet potential challenges and opportunities. To maintain or enhance the organisation's reputation in a community.Benefits of Human Resource AuditHuman Resource or HR is an integral part of any company that covers an array of functions such as recruitment, selection, compensation management, payroll, benefits, training, development, etc. HR audit is a broad term covering all the human resource functions. It covers the followingHR areas: Audit of all the HR functions. Audit of managerial compliance of personnel policies, procedures and

legal provisions. Audit of corporate strategy regarding HR planning, staffing, industrialrelations (IR), remuneration and other HR activities. Audit of the HR climate on employee motivation, morale and jobsatisfaction.After our comprehensive assessment of your HR systems through HR audit,areas for improvement can be identified and solutions can be implemented. The best HR practices involve a legally defensible framework, training of employees, and accurate marketplace data. Some immediate audit benefits are as follows: Create an HR business plan. Streamline HR work processes. Monitor compliance with established regulations and procedures. Develop user-friendly HR systems. It provides various other benefits to the organisation. These are: It helps to find out the proper contribution of the HR department towards the organisation. It helps in development of the professional image of the HR department of the organisation. It reduces the HR cost by minimising the faults in various functions. It motivates HR personnel towards better performance as they know that they are being observed so they are more conscious. It helps in identifying problems and solving them smoothly. It provides timely legal requirements. It provides sound performance appraisal systems. It helps in systematic job analysis. It helps in changing mindsets.Now read the example given below to observe how a company derives benefits from HR audit.An engineering organisation with over 100 employees contacted Vital HR to carry out an HR audit. They did not have a specific HR person. As it often does, the role of HR fell on finance or the company secretary and advice when needed was taken from a solicitor. This organisation had robust contracts of employment in place and many HR policies and procedures. The audit gave the client an opportunity to discuss key areas of concern within the business and to establish if its current procedures were able to help overcome them. Following the audit, only a few additions to the policies were recommended. The outcome of this audit was that the client felt reassured that it was legally compliant, they had the opportunity to discuss ‘what if’ situations with an HR professional, and hopefully, in case they had any major issues they would know whom to turn to for advice.

Q2. Discuss the methods used in the HR Audit process.Explain the methods used in the HR Audit process

Answer:Explain the methods used in the HR Audit process:A good starting point for the audit process is to take some time and reflect on the HR functions which need to be audited. Simply listing them is a good first step. For achieving organisational goals, it is very important to carry out various HR functions smoothly. In this step of the audit process, we define the various functions which need to be audited.

In this step, consider your areas of responsibility and traditional HR practices covered by the functions you need to audit. While starting out, it is better to make more general statements and improve from year to year in those areas that you choose to raise the level of performance. For example, as an audit manager, you may decide to audit any of the following: All human resource functions. Any specific function such as the recruitment process of your company. Any part of the specific function you have selected for audit such as generating applicant pool function of the recruitment process.The main purpose is to study and analyse each one of the specific areas of HR management. The analysis should focus on the planned measures, the method of implementation, and the results obtained. In order to carry this out, the areas that need to be audited must be identified. A list of the indicators corresponding to the different areas of the HR function could contain some of the following:Description of the staff of the companyThe complete staff can be described by: Hierarchic levels Years of service Qualification Sex Nationality

The number of permanent and temporary employees, interns and physically or mentally challenged employees. Indexes of personnel rotation and absenteeism.Job analysisThe various indicators of job analysis are as follows: The number of described posts Occupants per post Degree to which the job description cards have been updated The degree of detail in the job description cards The methods used to analyse and describe the jobs.HR planningHR planning, as you have studied in unit 7, is an important area of preplanning which includes the methods employed to plan personnel needs, the measures adopted to cover future personnel needs, and the temporary planning horizon.Recruiting and personnel selectionMain indicators of this are as follows: The number of days required to fill in a vacant post The number of applications received by work place categories The average amount of days between the reception of the application and recruitmentThe average cost of recruitment Cost of selection per job post The degree to which internal and external sources of recruitment are used The average number of candidates that do not pass the selective tests The study of the reliability and validity of the selection testsTraining and developmentThe training indicators are as follows: The procedures followed Frequency at which personnel training needs are analysed The criteria followed in the training programmes The evaluation criteria for the efficiency of the training programmes The percentage of the HR budget allocated to training The average number of hours of training per employee The percentage of employees that participate in training programmes by workplace categories.Development of professional careersThese indicators focus on the vacancies covered internally.These indicators include: The percentage of employees promoted

The percentage of vacancies covered internally and externally and the average time per employee it takes to receive a promotion.

Q3. What is HR Scorecard? Explain the reasons for implementing HR Scorecard framework.Meaning of HR Scorecard Reasons for implementing HR Scorecard framework.Answer:Meaning of HR Scorecard: HR scorecard measures the HR function's effectiveness and efficiency in producing employee behaviours needed to achieve the company's strategicgoals. In order to achieve that you need to know:– What the company's strategy is.– Understand the causal links between HR activities, employee behaviours, organisational outcomes, and the organisation's performance.– Have metrics to measure all the activities and results involved.This mode of scorecard is based on the assumption that competent and committed employees are needed to provide quality products and services at competitive rates emphasising on the ways to enhance customer satisfaction.

Understanding the Reason for Implementing the Human Resource ScorecardIn this era of tough competition it is very important for firms to have more effective HR management systems. It is a challenge for managers to make HR a strategic asset. The HR scorecard is an instrument that enables them to improve the HR function in the organisation. It helps to periodically assess effectiveness of HR functions in a wide range of areas, from recruiting to terminations, and including training and development, communications, and legislative compliance. But implementing effective audit systems for human resource is a difficult task and demands the existence of a unified framework to guide the HR managers. Sometimes firms under-invest in their people and at times invest in the wrong ways. Another difficulty faced by managers is that they cannot prepare the projected cash flows for future

productivity of present inputs as in the case of financial assets, but at the same time they are not willing to take the risk. So the best way is to prepare the Balanced Scorecard with soundmeasurement strategies which are able to link HR functions, activity and investment with the overall business strategy. The HR scorecard framework was specifically designed for the following reasons: It reinforces the distinction between HR do-ables and deliverables: A good audit system must clearly differentiate between the deliverables that influence strategy implementation and do-ables that do not. Policy implementation is not a deliverable until it has a positive effect on theHR architecture and creates the right employee behaviours that drive strategy implementation. An appropriate HR measurement system will encourage HR professionals to think both strategically as well as operationally. It helps in controlling cost control and value creation: It is the responsibility of HR to minimise the cost of the firm but at the same time, HR has to fulfill its strategic goal, which is to create value. The HR scorecard helps HR professionals balance the two and find the optimalsolution. It allows HR professionals to drive out costs where appropriate, but at the same time it helps to create value for the firm by retaining good human resources. It measures leading indicators: There are drivers and outcomes in the HR value chain along with leading and lagging indicators in the overall balanced performance measurement system. It is thus important to monitor the alignment of the HR decisions and systems that drive theHR deliverables. Assessing this alignment provides feedback on HR’s progress towards these deliverables and lays the foundation for effective HR strategies. It assesses HR’s contribution to strategy implementation: The cumulative effect of the HR scorecard’s deliverable measures provides the answer to the question regarding HR’s contribution to a firm’s performance. All measures have a credible and strategic rationale. Managers can use these measures as solutions to business problems. It lets HR managers to manage their strategic responsibilities: The scorecard motivates the HR managers to focus on exactly how their decisions shape the successful implementation of the firm’s strategy. This is due to the systemic nature of the scorecard that covers all the aspects. Therefore it provides a clear framework. It encourages flexibility and change: In this era of an ever-changing business environment, standardised patterns do not work well. The changes are required even in the HR policies with the change in business environment. The basic nature of the scorecard with its causal emphasis and feedback loops helps fight against measurement systems getting too standardised. Every decision needs to be taken based on past and future scenarios. One of the common problems of measurement systems is that managers tend to get skilled to obtain the right numbers once they get used to a particular measurement system. The HR scorecard provides the flexibility and change because it focuses on the firm’s strategy implementation, which constantly demands change.

Q4. What is meant by ‘Competency mapping’? Explain the various competencies and the associated behavioral aspects.Meaning of competency mapping Explanation any seven competencies along with the behavioral aspectsAnswer:Meaning of competency mapping :Competency mapping forms an excellent tool for optimising the human capital. HR auditors should make sure that they identify the key competencies for an organisation or a particular position in an organisation, and use it for job evaluation, recruitment, training and development, performance management, succession planning, etc. They should ensure that the organisation effectively communicates what it actually expects from them.The competency framework serves as the bedrock for all HR applications. As a result of competency mapping, all the HR processes such as talent induction, management development, appraisals and training yield much better results.Competency mapping involves identifying the competencies that will be needed by people working in an organisation. The level of competency needed by employees at each level must also be specified. This depends on the type of job they do and the environment in which the organization functions. Once this is identified, the remaining process becomes easier. The next step will be to match the existing level of competencies with what is actually required, and take measures to bridge the gap.Just like a round peg can’t fit a square hole, a wrong employee can’t fit in a right organisation.The future of an organisation lies with the people working there. The organisation will have to find the right person who will fulfill its expectations or will have to chisel and shape up the existing employee to fit its expectations. The more efficient they become in facing the demands of the environment, the more effective will be the organisation.Now let us go through certain core competencies for professionals, the behavioural aspects associated to each of them, and elements pertaining to each of them.Explanation any seven competencies along with the behavioral aspects1. Communication Skills: This does not necessarily refer to English speaking skills. There are various factors leading to effective communication.

2. Interpersonal Relationship Building Ability: This deals with how well a person is able to socialise and bond with others around him. The behavioural aspects and elements related to interpersonal relationship building ability

3. Negotiating Ability: The need for this skill arises when two or more parties argue on a common issue and each party wants a conclusion that it prefers. The behavioural aspects and elements related to negotiating ability

4. Critical Thinking Ability: The business environment is full of uncertainties and surprises. One must have the ability to think and act under unforeseen and critical situations. The behavioural aspects and elements related to critical thinking ability

5. Data Management Ability: The documents and files possessed by a company are of great importance. The information has to be managed effectively. The behavioural aspects and elements related to data management ability

6. Forecasting Ability: As already said, the business environment is highly uncertain. One has to possess the ability to foresee future changes and competitions. The behavioural aspects and elements related to forecasting ability

7. Creativity: It is not only the quality of the product that plays a role in the market. It is also how different our products are, compared to that of our competitors, and how useful they are,

which attract our customers. This requires creativity. This will also bring about a huge difference in the way regular day-to-day activities are carried out. The behavioural aspectsand elements related to creativity

Q5. Write a brief note on effectiveness of Human Resource Development Audit as an intervention.Effectiveness of Human Resource Development Audit as an intervention.

Answer:Effectiveness of Human Resource Development Audit as an intervention:In any firm, along with the optimal utilisation of other resources, human resources should also be exploited to its maximum potential. Businesses which utilise their human resources in an effective way have better chances of success in the future. Sustainability and progress of business will depend on new competencies, methods, strategies and value creating processes.Every organisation has accepted that human resource is the most valuable asset of an organisation though its value is not mentioned in the balance sheet.Lack of information regarding human capital was seen as a serious handicap for decision making, both for the managers, investors (Srivastava 1979: 83) and for the human resource development process itself. Some of the controversies that have emerged as hindrances to the very concept of human asset and to the process of human audit (Khandelwal 1979) is listedbelow:a) Since human beings can’t be owned by others, it is wrong to use the term ‘asset’ without legal ownership. Again it can’t be even said that the services of an employee are owned by an employer during his employment in the enterprise.b) While it may be possible to conceive the resource of an employee or his service, the potential dimension of an employee cannot be conceived or predicted. Hence, it is difficult to assess or account the same in terms of any tangible methods. At the most, human potential can be qualitatively valued.c) To be valued as an asset, an item should be capable of being valued with a reasonable degree of objectivity and it should be capable of substantiation at the time of audit. Human beings do not meet with any of these requirements. Hence, they cannot be shown as assets.d) The term ‘asset’ implies some realisable value once out of use. Human resources have no realisable value. Rather, they actually involve expenditure in terms of payment of retrenchment compensation, gratuity and other terminal benefits at the time of retirement, while the

employer does not receive anything on the termination of the services or on the retirement of an employee.e) Calling ‘human resources’ as assets is against human dignity as human beings are much more than resources. The study was conducted to find out the effectiveness of HRD audit as an Organisational Development (OD) tool, and the issues for making it succeed in an organisation by exploring the factors affecting it. It also explored the expectations of HR to make the intervention a success. The various findings of the study are as follows: Where HRD chief/top HR is committed to HRD, the effectiveness of HRD was likely to be high in those organisations. Organisations with positive management style were utilising HRD audit as a tool for change and advancement in HRD. There is a direct relation with regard to management styles and HRD effectiveness. The business units which have a good HRD development profile were likely to utilise the HRD audit interventions to bring about HRD oriented changes.

Q6. Write short notes on the following: (i) Concept of Audit for HR Planning (ii)Concept of Audit for HR Climate

Answer:(i) Concept of Audit for HR Planning :HR planning refers to the ongoing process of systematic planning to achieve optimum use of an organisation's most valuable asset - its human resources. The objective of HR planning is to ensure the best fit between employees and jobs, while avoiding manpower shortages or surpluses. The three key elements of the HR planning process are forecasting labour demand, analysing present labour supply, and balancing projected labor demand and supply. HR planning is the process by which management ensures that it has the right personnel who are capable of completing those tasks that help the organisation to accomplish its goals. The audit of HR planning helps to verify the following aspects of HR planning:a) An organisation’s plans regarding expansion, diversification, technological change, etc., should be backed by the availability of human resources. It suggests modification in the plan when the expected manpower is not available. b) Uncertainty and change.c) Advancement and development of employees through training, development, etc.d) The level to satisfy the individual needs of the employees for promotions, transfers, salary enhancement, better benefits, etc.e) System for anticipating the cost of salary, benefits and all the cost of human resources thus facilitating the formulation of budgets in a society.f) The need for redundancy and plans to check of human resources and to change the techniques of management.

g) Planning for physical facilities, working conditions, the volume of fringe benefits such as canteen, schools, hospitals, conveyance, child care centres, quarters, company stores, etc.h) Development of various sources of human resources to meet the organisational needs. Audit of HR planning helps ensure that you have reliable monitoring and planning systems in place, so that the implications for strategic and cost planning can quickly and easily be assessed. Normally auditing addressesthe following six areas:1. How to develop and introduce an effective HR planning system.2. How to estimate workforce requirements for the organisation.3. Understanding and predicting the available labour supply.4. How to analyse the supply and demand balance, and deal with a surplus or a shortfall.5. Handling the implications for recruitment, internal redeployment, pay and rewards, training and development, and employee retention.6. Monitoring organisational plans, i.e., how to develop a system that will give you reliable early warnings of problems ahead.The audit of HR planning helps to take steps to improve human resource contributions in the form of increased productivity, sales, turnover, etc. It facilitates the control of all functions, operations, contribution and cost of human resources.Now read the case 1 given at the end of the unit about the central bank, which is facing challenges on the manpower front from various directions such as retirement and skill upgradation. It covers the various areas of HR planning audit. By reading this you will understand importance of verifying the HR policies so as to minimise future problems.

(ii)Concept of Audit for HR ClimateHR climate has impact on motivation, morale and job satisfaction. Quality of HR climate can be measured by examining:1. Employee turnover: In a HR context, “turnover” or “staff turnover” or “labour turnover” is the rate at which an employer gains and loses employees. Simple ways to describe it are "how long employees tend to stay in a given organisation or industry”. Losing employees may includefactors such as deaths, transfers, retirements and resignations. High turnover may be harmful to a company's productivity if skilled workers are often leaving and the worker population contains a high percentage of novice workers which can lead to increased cost. Reduced employee turnover is an excellent measure of HR climate. Some areas that lead to employee turnover are better hiring practices, orientation, working conditions, remuneration and benefits, and advancement opportunities.2. Absenteeism: It can be described as failure on part of an employee to report for work. Unauthorised absence costs money and reflects dissatisfaction with the organisation. Some of the ways the organization can curtail absenteeism are avoidance of night shifts, enhancement of job security and job satisfaction and friendly supervision.

3. Safety records: Organisations should keep records of accidents in the workplace. Accidents cost money and life and also reflect prevailing organisational climate. Frequent accidents also affect the goodwill of the organisation. In order to avoid it, the management must have safetyplans in place. Moreover, the effectiveness of the safety plan should be evaluated and measured at regular intervals.4. Attitude surveys: They are the most important indicators of organisational climate. Attitudes determine employees’ feeling towards the organisation, supervisor, peers and activities.