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Hr Audit Tool People In Aid 2007
1.
Page 1
Measuring HR Effectiveness – A Toolkit What the Toolkit is for? The guiding principle in the People In Aid Code of Good Practice is that ‘People are central to the achievement of the organisation’s mission’. This Toolkit is designed to help managers evaluate the extent to which that is the case – it enables an organisation to audit its HR and people management systems, policies and practices, and identify priorities for action. It will work in most contexts, and has been designed specifically to be used in head office, regional office or local / field office environments. It comprises a set of diagnostic questionnaires, guidelines and tips that enable organisations involved in humanitarian relief and development programmes to measure and evaluate the effectiveness of their HR / people management policies and practices, and address any gaps or shortcomings. In other words, it’s an HR audit. The HR audit is built around six core categories of people management, namely: Planning Recruitment Deployment Management Development Transition Why use the Toolkit? An HR audit enables an organisation to get an accurate and thorough picture of the effectiveness of its HR systems, policies and practices. Over time, audit data can be tracked and trends monitored. Where appropriate, benchmarking with peers can help bring about performance improvements and facilitate organisational learning and development. The key benefits associated with this tool include: • Objective and systematic review of HR systems, policies and practices • Indicates levels of employee engagement • Highlights issues or gaps and identifies priorities for action • Encourages participation by managers on HR issues Who would use it and when? People In Aid encourages all organisations committed to good practice in the management and support of their staff and volunteers to measure the effectiveness of their HR systems, policies and practices. Using this toolkit will help you gather the evidence you need to be awarded the first People In Aid ‘Quality Mark’ and it can also be used as part of the People In Aid Code implementation process. Further information on the Code implementation process can be found on our website www.peopleinaid.org/code The toolkit can be used by individuals or teams, according to respective needs or drivers. For example: • an individual within the HR department might use it to provide a quick overview of the organisation’s ‘health’ • an HR team might use it to facilitate internal diagnosis, discussion and action planning Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
2.
Page 2
• the senior executive team might use it to assess how HR policies and practices impact individual and organisational performance. The toolkit can be used at any stage in an organisations life cycle; it is equally applicable to new organisations in the start up phase and to mature well-established organisations. How to use it The real power behind the toolkit does not lie in the diagnostic instruments themselves, it is in the subsequent discussion, prioritisation and action planning that results. The recommended approach is therefore as follows: 1. Conduct HR Audit using Toolkit 4. Implement 2. Discuss changes and implications / monitor progress findings and impact of agree priorities changes 3. Create action plans and engage key stakeholders The HR audit can be carried out at 3 different levels (basic, full and enhanced), depending on the time available, the particular needs of the organisation and the depth of insights that they wish to obtain. Basic audit (Level 1) The basic audit provides the organisation with an overview of HR effectiveness across the six categories and identifies the priority categories for attention. Full audit (Level 2) The full audit can either follow on from the basic audit (Level 1) and explore issues within priority categories in more detail, or it can be used in its own right as a stand-alone audit that provides a greater depth of insight. As before, priority areas for attention are highlighted. Enhanced audit (Level 3) The enhanced audit is designed to be used in conjunction with the full audit and enables an organisation to gain a deeper understanding of issues by identifying underlying causality in terms of capability, resource or infrastructure problems. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
3.
Page 3 Basic Audit
(Level 1) This can be used on its own as a high level audit or can form a precursor to more detailed insights that can be obtained through moving to the full and enhanced audits. Who Would Use It? HR Director / Manager, HR team or senior leadership team When to Use It? When a quick assessment is needed in order to assess the health of people practices at a high level How to Use It? The audit comprises two questionnaires / checklists: The HR Policies, Processes and Practices Checklist (Appendix 1) provides insight into the extent to which key policies processes and practices exist, the level of understanding of them within the organisation and the extent to which they are up to date and ‘fit for purpose’. The Basic HR Effectiveness Questionnaire (Appendix 2) comprises 6 statements that broadly align to the stages in the employee life cycle and provides an opportunity to rate the effectiveness of systems, policies and practices. Step 1 The individual manager, or team, completes the HR Policies, Processes and Practices Checklist (Appendix 1) and the Basic HR Effectiveness Questionnaire (Appendix 2) by rating the extent to which they agree with the statement (high level of agreement (H); moderate level of agreement (M); low level of agreement (L)). The more respondents that complete this process, the more robust the data will be. Step 2 Review the results from the completion of both the checklist and the questionnaire. If more than one person is carrying out the diagnostic then collate results and compare similarities and differences in perceptions. A scoring sheet is provided in Appendix 3 to help summarise individual scores, if required. Discuss the findings and: Clarify why different perceptions exist Review the gaps Agree a ‘collective rating’ Undertake a risk assessment to determine the implications in terms of impact on service delivery i.e. which issues, if addressed, would have the greatest impact on the organisations ability to recruit, retain and motivate staff and improve service delivery. Risk should be categorised as high (H), medium (M) or low (L). The agreed risk assessment should be recorded on the questionnaire. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
4.
Page 4 Step 3
Determine the level of priority that should be attached to each statement. This can be done by reviewing the perception and risk assessments and determining a priority rating for each statement as follows: high priority (Red), medium priority (Amber), low priority (Green) and very low priority (Blue). The following table can be used to assist in this categorisation: Perception Risk Priority High High Green Medium High Amber Low High Red High Medium Green Medium Medium Green Low Medium Red High Low Blue Medium Low Green Low Low Amber Attention should be focussed firstly on those activities that fall into the red category and secondly on those in the amber. It is also worth considering any activities that fall into the blue category in order to explore whether too much resource / focus is being given to these activities at the expense of others. The results can be represented visually if desired by plotting a matrix on a flip chart as follows: H Perception M L L M H Risk Identify the top (no more than 5) issues to focus attention on. Develop and agree action plans, including how other key stakeholders will be engaged Step 4 Implement changes and monitor progress – a list of possible performance metrics is shown in Appendix 4. In the course of carrying out the above exercise it is possible that specific business units, functions, locations and employee groups may be identified for particular attention or where the ratings would be expected to differ from the norm, either because they are more strategically critical or because the perception of the impact on these groups might differ. Where this is the case the exercise should be repeated for these specific groups. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
5.
Page 5 Outcomes The above
process will result in: An understanding of how different members of the team view existing people management practices and the extent to which consensus exists Where specific policies and procedures may be missing or where improvements in communicating and implementing are required Identification of priorities and where attention needs to be focussed Insights into specific employee groups / locations / functions where attention may need to be focussed The formulation of action plans and a process for monitoring progress Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
6.
Page 6 Full audit
(Level 2) The full audit can be used as a stand alone ‘diagnostic tool’ or can follow on from the basic audit (Level 1) in order to gain greater insight into the priority areas for attention. Who Would Use It? HR team or senior leadership team with the option to modify the approach in order to capture broader stakeholder opinions. When to Use It? When a more detailed assessment is needed and more comprehensive insights into all or specific people practices are required. How to Use It? Step 1 Complete the Full HR Effectiveness Questionnaire (Appendix 5). There are a set of 35 statements grouped into six categories. Respondents are required to provide perception (H,M,L) ratings and score them as with the basic audit. Step 2 As with the basic audit the distribution of responses from all respondents should be collated, discussed, differences in perception explored and a risk assessment carried out. A scoring sheet is provided in Appendix 6 to help in the collation of responses, if required. Step 3 Agree priorities, record on the diagnostic and develop action plans and how best to engage key stakeholders Step 4 Implement changes and monitor progress As before, the exercise can be repeated for specific employee groups, functions or locations Outcomes The above process will provide detailed insights into a wider range of people management practices and as such will enable much more detailed prioritisation and action planning to take place. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
7.
Page 7 Enhanced audit
(Level 3) The enhanced audit enables managers to gain a deeper understanding of the issues that underpin the high priority areas for attention Who Would Use It? HR team with an option to involve a broader range of stakeholder groups in the diagnosis When to Use It? When there is a need to understand the extent to which capability, resources and infrastructure issues are the limiting factors underlying priority areas for attention How to Use It? The enhanced audit focuses on the extent to which the HR function and Line Management have the capability (skills, knowledge and expertise), resources (manpower, time money) and infrastructure (information, processes, technology and support) to enable them to deliver. Step 1 Create a template comprising the statements that are the high priority (Red) areas for attention as identified during the full audit (alternatively the exercise could be carried out on all 35 statements if a more comprehensive analysis was required). Example Statement HR Function Line Management Risk Priority Capability Resources Infra Capability Resources Infra structure structure Planning We have a clearly defined, integrated people management strategy Our people strategy is aligned to our mission, values and strategic objectives Our people strategy enables us to maximise the return on our investment in people. Our people strategy supports a culture of learning and continuous improvement throughout the organisation We provide people with good career development opportunities Step 2 Individuals rate perception on a H/M/L scale as before for each of the six areas: HR and line capability, resources and infrastructure. Consolidate and review and discuss the distribution of responses. Undertake a risk assessment as before. Step 3 Agree priorities and action plans and how best to engage key stakeholders Step 4 Implement changes and monitor progress Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 8 Appendix 1 HR
Policies, Processes and Practices Checklist Policy / Process / Practice Does this Is it / are Is it / are they Is it / are exist? they up to clearly they Responses: Yes / No / Don’t Know date? communicated? consistently applied? Planning Organisation charts which reflect the current organisation Contracts of different types and lengths which reflect the requirements of the organisation Terms and conditions of employment, including non cash and cash benefits in local currencies Policy governing annual, compassionate and home leave entitlements Policy covering working hours, the length of the working week and standards governing the working environment Policy covering living / accommodation arrangements including adequate privacy provisions Insurance arrangements Rest and Recuperation policy Expected standards of behaviour and code of conduct Understanding of labour laws in the countries in which the organisation operates Recruitment Job descriptions Person specifications Diversity and Equality policy Application forms and selection / short listing processes Testing and interviewing tools and procedures Procedures for obtaining references, conducting health checks and carrying out criminal records checks Deployment Travel arrangements inc vaccinations, visas, insurance, work permits etc Induction programme Training needs analysis for new starters Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 9 Policy /
Process / Practice Does this Is it / are Is it / are they Is it / are exist? they up to clearly they Responses: Yes / No / Don’t Know date? communicated? consistently applied? Probationary period and review Mentoring / support for new starters Management Grievance, disciplinary and whistle blowing procedures Performance management / appraisal process Periodic salary reviews and benchmarking against relevant local organisations Health and Safety policy including security, stress and individual counselling support Confidential and secure personal records Development Training needs analysis for all staff Availability of range of different learning methodologies including self help, training courses, mentoring, shadowing etc Articulated career paths and periodic career development discussions Methodologies /approaches for communicating and managing change Transition Policies for handling resignation, redeployment and redundancy Evacuation / suspension of operations procedures Dismissal procedure Exit procedures including exit interviews, hand over, references, health checks, ongoing support, payments Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 10 Appendix 2 Basic
Audit - Level 1 HR Effectiveness Questionnaire Category Perception Risk Priority (H, M, L) (H.M,L) (R,A,G,B) Planning We have a clearly defined, integrated people management strategy, aligned to our mission, values and strategic objectives, which enables us to maximise the return on our investment in people and which supports a culture of learning and continuous improvement throughout the organisation. Recruitment We are able to attract and select a diverse workforce with the skills and capabilities we need to meet our current and future needs Deployment We rapidly assimilate new starters into the organisation in order to make them feel ‘part of the family’, help them understand how the organisation, and the sector works, clarify organisational values and cultural norms, and identify and provide on-going support during their probationary period Management We manage our people in a way that energises and motivates them to perform to the best of their ability and provide rewards and recognition that are fair and equitable and where appropriate, reflective of individual contribution. Development We actively help our people to realise their full potential through by enabling appropriate training and learning interventions and through the provision of career development opportunities Transition We manage the exit of people from the organisation in a humane and sensitive manner that reinforces our reputation as a good employer and which enables us to learn how best to adapt existing people management practices. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 11 Appendix 3
Basic Audit - Level 1 HR Effectiveness Questionnaire Scoring Sheet Category Individual Overall Individual Overall Priority Perceptions Perception Risk Risk Assessments H M L H M L Planning We have a clearly defined, integrated people management strategy, aligned to our mission, values and strategic objectives, which enables us to maximise the return on our investment in people and which supports a culture of learning and continuous improvement throughout the organisation. Recruitment We are able to attract and select a diverse workforce with the skills and capabilities we need to meet our current and future needs Deployment We rapidly assimilate new starters into the organisation in order to make them feel ‘part of the family’, help them understand how the organisation, and the sector works, clarify organisational values and cultural norms, and identify and provide on-going support during their probationary period Management We manage our people in a way that energises and motivates them to perform to the best of their ability and provide rewards and recognition that are fair and equitable and where appropriate, reflective of individual contribution. Development We actively help our people to realise their full potential through by enabling appropriate training and learning interventions and through the provision of career development opportunities Transition We manage the exit of people from the organisation in a humane and sensitive manner that reinforces our reputation as a good employer and which enables us to learn how best to adapt existing people management practices. Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 12 Appendix 4 People
Metrics Category Measure Planning Segmentation of workforce and the extent to which HR practices are tailored to suit different needs Key people measures regarding recruitment, retention and motivation analysed by key talent group % of senior leadership time devoted to people issues and reviewing people metrics % of senior management time spent in identifying key talent and in planning appropriate deployment and development Retention rates – overall and for key employee groups Engagement scores - overall and for key employee groups Recruitment Reputation as an employer from external surveys Elapsed time to fill vacancies Number of failed recruitments (& reasons) % offers accepted % candidates retained after 1 year Diversity mix of applicants Induction % new starters receiving full induction within specified timescale % new starters receiving mentoring and coaching Perception of new starters after first 3 months % of new starters whose training and development needs have been met within specified timescale Deployment Accuracy and relevance of person specifications % of employees who feel that their role plays to their strengths % of employees who feel that they are trusted to use their judgement % of employees who feel that their role is stretching and challenging Capture and sharing of information regarding individual strengths across the organisation Management % of employees who trust and respect their manager % of employees who have had motivational performance review discussions with their manager % of employees who are clear about what is expected of them % of employees who receive prompt recognition and praise % of employees who receive regular constructive feedback % of employees who believe they are treated fairly Level of investment in employee welfare and heath and safety Number of flexible working and work / life balance initiatives % of employees fully engaged within team Development Level of training and development investment % of employees who have individual training and development plans % of employees who have had a meaningful career planning discussion with their manager % of employees who feel that their manager understands their aspirations and needs Transition % of leavers who feel that they have been well treated Level of time spent analysing and taking action on exit interview data Number of referrals generated by former employees Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 13 Appendix 5 Full
Audit - Level 2 HR Effectiveness Questionnaire Statement Perception Risk Priority (H,M,L) (H,M,L) (R,A,G,B) Planning We have a clearly defined, integrated people management strategy Our people strategy is aligned to our mission, values and strategic objectives Our people strategy enables us to maximise the return on our investment in people. Our people strategy supports a culture of learning and continuous improvement throughout the organisation We know where the key talent which is critical to our success is and how best to retain and motivate them Recruitment We have a strong employer brand that attracts high quality applicants Our recruitment & selection processes enable us to respond rapidly when vacancies arise Person specifications for jobs define the correct levels of skills, competencies and experience required Our recruitment & selection processes effectively sift candidates and enable us to select the best person for the job Our recruitment & selection processes enables us to attract a diverse range of candidates Our employment offer is attractive and enables us to recruit the calibre of people we require Deployment New starters are provided with a comprehensive induction programme The individual needs of new starters are rapidly assessed and addressed Our induction programme enables new starters to rapidly assimilate into the organisation and become ‘part of the family’ New starters are provided with coaching and mentoring support during their probationary period New starters are provided with the equipment, information and guidance necessary to prepare them for their role Management We provide individuals with roles that are stretching and challenging We delegate authority appropriately and trust individuals to use their judgement Our managers build individual capability and confidence and enable others to be successful Managers are good at identifying what motivates individuals and in bringing the best out of them Individuals have a clear understanding of what they need to do and what constitutes success in their role Individuals receive regular constructive feedback which helps them to improve their performance Our managers provide prompt praise and recognition where it is merited Our treatment of people is fair, equitable and even handed We take employee health, welfare and safety seriously and strive to help individuals achieve a meaningful work / life balance Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Statement Perception Risk Priority (H,M,L) (H,M,L) (R,A,G,B) We have a comprehensive understanding about how people feel about working for us and take prompt action to address issues Development We have a comprehensive understanding of individual training and development needs Individual training and development needs are promptly and appropriately addressed We provide people with the scope to grow and fulfil their potential People are clear about how they can progress their career within the organisation We provide people with good career development opportunities Transition We manage the exit of people from the organisation in a humane and sensitive manner We adapt our people management policies and practices based on insights provided by those that have left We help build people’s capabilities for their future careers People invariably speak well of this organisation after they have left Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Page 15 Appendix 6
Full Audit - Level 2 HR Effectiveness Questionnaire Scoring Sheet Statement Individual Overall Individual Overall Priority Perceptions Perception Risk Assessments Risk (R,A,G,B) H M L H M L Planning We have a clearly defined, integrated people management strategy Our people strategy is aligned to our mission, values and strategic objectives Our people strategy enables us to maximise the return on our investment in people. Our people strategy supports a culture of learning and continuous improvement throughout the organisation We know where the key talent which is critical to our success is and how best to retain and motivate them Recruitment We have a strong employer brand that attracts high quality applicants Our recruitment & selection processes enable us to respond rapidly when vacancies arise Person specifications for jobs define the correct levels of skills, competencies and experience required Our recruitment & selection processes effectively sift candidates and enable us to select the best person for the job Our recruitment & selection processes enables us to attract a diverse range of candidates Our employment offer is attractive and enables us to recruit the calibre of people we require Deployment New starters are provided with a comprehensive induction programme The individual needs of new starters are rapidly assessed and addressed Our induction programme enables new starters to rapidly assimilate into the organisation and become ‘part of the family’ Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Statement Individual Overall Individual Overall Priority Perceptions Perception Risk Assessments Risk (R,A,G,B) H M L H M L New starters are provided with coaching and mentoring support during their probationary period New starters are provided with the equipment, information and guidance necessary to prepare them for their role Management We provide individuals with roles that are stretching and challenging We delegate authority appropriately and trust individuals to use their judgement Our managers build individual capability and confidence and enable others to be successful Managers are good at identifying what motivates individuals and in bringing the best out of them Individuals have a clear understanding of what they need to do and what constitutes success in their role Individuals receive regular constructive feedback which helps them to improve their performance Our managers provide prompt praise and recognition where it is merited Our treatment of people is fair, equitable and even handed We take employee health, welfare and safety seriously and strive to help individuals achieve a meaningful work / life balance We have a comprehensive understanding about how people feel about working for us and take prompt action to address issues Development We have a comprehensive understanding of individual training and development needs Individual training and development needs are promptly and appropriately addressed We provide people with the scope to grow and fulfil their potential People are clear about how they can progress their career within the organisation Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007
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Statement Individual Overall Individual Overall Priority Perceptions Perception Risk Assessments Risk (R,A,G,B) H M L H M L We provide people with good career development opportunities Transition We manage the exit of people from the organisation in a humane and sensitive manner We adapt our people management policies and practices based on insights provided by those that have left We help build people’s capabilities for their future careers People invariably speak well of this organisation after they have left Measuring HR Effectiveness – A Toolkit. © People In Aid Nov 2007