HUMAN RESOURCE AUDITING

Definition:

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.

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.

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.
 Provides timely legal requirement.
 Sound Performance Appraisal Systems.
 Systematic job analysis.
 Smooth adoption of the changing mindset.

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)

Conclusion:

The auditors always prepare and submit an audit report to authority of the organization,
which may be clean or qualified. The clean report indicates the appreciative of the
department's function, but the latter one represents the gaps in performance and therefore
contains remarks and remedial measures. HR Audit is very much helpful to face the
challenges and to increase the potentiality of the HR personnel in the organization.

EMPLOYEE ATTRITION

Employee attrition is a very big problem not only in India but outside India too. Attrition rate
is increasing day by day and its especially the software industry which is affected the most.
Why an Employee leaves a company is the question asked by most of the employers.
Companies even hire Private HR professionals to study the company's work and find out why
an employee is dissatisfied.

HR department does the recruiting of new employees and then send them for training so that
they can understand work and work culture and become better professionals. Each and every
company faces employee turn over problem whether big or small. An employee leaves his
present job for another job to get better pay package and good working conditions.
Every Company calculates Employee attrition rate and takes measures to reduce it. The facts
and figures are not made public as it may tarnish the image of the company in front of its own
employees and its loyal customers.

A survey has found out that there are various reasons for Employee Attrition -

1.Higher Pay Package in another company

2.Good working Conditions
3.Opportunities for growth in new company
4.Change of Place problem
5.A better Boss in new company
6.Brand Image of the new company

Employee attrition costs a lot to the company. There are various costs which are borne by the
company at the start when the employee is under training period. Costs such as -
1.Conveyance Cost
2.Cost of lodging of the new employee
3.Trainers cost
4.Cost of venue where training will be conducted
5.Materials to be supplied during training process

A company has a training period of 3 to 6 months. During this time an employee is not
fruitful for the company. If an employee leaves the company when he starts working,
company suffers a big loss in terms of money as well as workforce. Every company takes
measures to hold the talented workforce by means of perks, Increments, Bonus and extra
facilities. No one wants to lose good brains to their competitors.

Now the question is how to reduce employee attrition. What should a company do to hold on
the talent.
There are various companies like TATA's and Reliance who do a lot to reduce attrition rate.
Flexible working conditions have been given to employees who have problem working 10 –
5. Private hospitals for employees where they can get their regular health check up done
without spending much money. Free overseas tour once in a year when a target is achieved.
Few Companies are getting more and more work savvy and just want to get their work done
by hook or by crook. The mentality needs to be changed. Target for completion of a work
should be there but that should not hamper an employees personal life. Companies should
conduct various seminars on how to balance personal and professional life. A employee can
be productive if and only if his personal life is balanced. Make employees a part of your work
culture family and see the difference.

Attrition rate cannot become completely obsolete but it can surely be minimized.