3. What is HR Audit?
It is a Comprehensive Evaluation
of Human Resource
Development:
Strategies, Systems and
Practices
Structures and Competencies
Styles and Culture
And their appropriateness to achieve the short and long
term business goals of the organization.
4. Purpose
To assess the effectiveness of the Human Resources
function to ensure regulatory compliance
To look for potentially serious problems
To find areas needing improvement
To document processes for use in merger, reorganization or
inspection
To address compliance issues
5. Benefits
Create an HR business plan
Streamline HR work processes
Monitor compliance with established regulations and procedures
Develop user-friendly HR systems
Identifies the contribution of the personnel departments to the
organization
Improves professional image of the personnel department
Encourages greater responsibility and professionalism among
members of the personnel department
Clarifies the personnel department’s duties and responsibilities
Finds critical personnel problems
6. To Evaluate and Improve HR Practices in:
Staffing
Compensation and Benefits
Performance Management
Employee Development
Employee Relations
Safety
Reporting and Recordkeeping
7. Reasons for HR Audit
For expanding, diversifying and entering into a fast growth
phase
For promoting more professionalism and professional
management
Bench-marking for improving HRD practices
Growth and diversification
Dissatisfaction with any component
Change of leadership
8. Role of HR Audit in Business Improvements
HRD audit is cost effective
It can give many insights
into a company's affairs.
It could get the top
management to think in
terms of strategic and long
term business plans.
Changes in the styles of
top management
Role clarity of HRD
Department and the role of
line managers in HRD
9. Role of HR Audit in Business Improvements
Improvements in HRD systems
Increased focus on human resources and human
competencies
Better recruitment policies and more professional staff
More planning and more cost effective training
Strengthening accountabilities through appraisal systems
and other mechanisms
Streamlining of other management practices
TQM Interventions
10. Scope
Audit of Corporate Strategy
Corporate Strategy concerns how the organization is going to
gain competitive advantage.
Audit of the Human Resource Function
Audit touches on Human Resource Information System, Staffing
and Development, and Organization Control and Evaluation.
Audit of Managerial Compliance
Reviews how well managers comply with human resource
policies and procedures.
Audit of Employee Satisfaction
To learn how well employee needs are met.
11. Tasks of Auditors
Review the policies and procedures used to achieve these
activities.
Prepare a report commending proper objectives, policies,
and procedures.
Develop an action plan to correct errors in each activity.
Follow up the action plan to see if it solved the problems
found through the audit.
Identify who is responsible for
each activity.
Determine the objectives sought
by each activity.
12. Methodology
Interviews
Individual and group
Top Management
Line Managers
HRD Staff
Workmen and others
Questionnaires
Observation
Analysis of records and
secondary data
Workshops
Task forces and internal
teams
External Auditors have a
significant role
Benchmarking of
questionnaire data