HR Audit

Aditi golecha im2k704

HR AUDIT
An HR audit is a process to
review
implementation of your
institutions policies
and procedures, ensure
compliance with
employment law, eliminate
liabilities,
implement best practices and
educate your
managers.
 SCOPE & IMPORTANCE
• 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.

• Goal of the HR audit includes two different analyses and

valuations: the HR policies and their level of fit with the strategy
of the firm, and the characteristics of human capital.

• Several criteria have been used to assess different HR policies.

Nevertheless, the measurement of the value that human capital
brings to the firm is a very complex topic.
AUDIT TOOLS

• Interview

• Document review

• Questionnaire

• Sampling
 APPROACH TO H.R. AUDIT
Methods which can
adopted for HR
Audit

Self – directed Task Forces out side

surveys. within the Consultants
organization
 METHODS OF H.R. AUDIT
I. INDIVIDUAL INTERVIEW METHOD:
• Top level management and senior managers are interviewed,
individually. It helps in following:
• A. Knowing their thinking about future plans and
opportunities available
• for the company.
• B. Knowing about their expectations from the H.R.Audit.
• C. Getting sensitive information pertaining to working styles
and culture.
• Union leaders, departmental heads, some strategic clients and
informal leaders are also interviewed, individually.
• In case of small companies, manned by professionals,
interviews can be extended with selected employees from
different levels and functions. .
II. GROUP INTERVIEW METHOD :
• Group interviews and discussions with the employees and/or
executives of large companies for H.R. Audit, facilitate
collection of information about effectiveness
• of existing systems.
• Composition Of Group:
• 1. Ideally, the group should be of 4 to 8 persons.
• 2. Group should consists of same or similar level of
employees from cross functional areas.
• 3. In case of large organization, group interviews for each
functional area can be conducted, separately.
• Relevant Questions That Are Asked In Individual And Group
Interviews :
• a. What do you see as the future growth opportunities and business
directions of the company?
• b. What skills and competencies does the company have which you are
proud of?
• b. What skills and competencies do you need to run your business, or to
perform your role, more effectively at present?
• c. What are the strengths of your HRD function?
• d. What are the areas where your HRD function can do better?
• e. 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?
• f. What is weak about them? What can be improved?
• g. What changes do you suggest to strengthen HRD in your company?
• h. What do you think are the ways in which line managers can perform
more developmental roles?
III. WORKSHOP METHOD:

• In some cases of H.R. Audit, instead of Individual and Group

Interviews, Workshop Methods i.e. Large Scale Interactive
Process (LSIP) is conducted, as under:
• a. 30 to 300 participants can be asked to gather in a room.
• b. They are divided in small groups.
• c. They are asked to work either around Systems, Subsystems
or around different dimensions of HRD and do SWOT
Analysis.
• d. All the groups thereafter give presentations.
• e. The H.R. Auditor compiles the views of all groups, makes
own observation, conclusions and prepares a report.
IV. QUESTIONNAIRE 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 H.R. Audit. This method helps in benchmarking.
• The process is as follows:
• a. Detailed questionnaire is prepared by H.R. Auditor.
• b. Individuals or groups are asked to assemble in a room or
hall are explained the objective and process of HR Audit.
They are then given questionnaires.
• c. They submit the questionnaire, duly filled in, to the HR
Auditor.
• to the top management.
• d. The HR Auditor compiles the feedbacks, makes
observations, conclusions and recommendations.
• e. Audit Results are informed to the Participants
before the report is submitted
Objectives -Recruitment Process
Audit
• To clarify desired practices.
• To establish a baseline for future improvement.
• To evaluate current effectiveness.
• To standardize recruitment practices across multiple
sites within a division or company.
• To assess current knowledge and skills required of
HR practitioners for the recruitment process.
• In order to help the organization to evaluate it’s entire
recruitment process and strategy against global best
practices.
Benefits Of Recruitment Audit
• To understand what recruitment streams are most and
least successful for the organization.
• To streamline our recruitment processes by making
them more cost and time effective .
Action Plan
Pre Audit : Defined desired HR
practices for recruitment process
for the organization
• Internal auditor.

• Secured senior management commitment.

• Listed all activities undertaken by HR department of our

company.

• Introduced the audit process to our managers.

• Pre-Audit Information:
• Company information, past records, comp. Growth over
the period, HR manual.
During Audit :
Assessed current practices against the
criterion that Auditor’s have established .

Observational Method :
• JD documents.
• Recruitment room, space.
• Interviews and way they are conducted.
• Assessment in the interview.
• Whole recruitment and selection process
performed for any one position.
……………..Contd.
• Secondary data collection:
▫ Recruitment data analysis(no. and quality of applicants in
relation to those recruited).
▫ Manpower guidelines.
▫ Recruitment policies.
▫ Organizational structure of HR department.
▫ Previous HR audit records.
▫ Attrition rates, department wise entry and exit interview
data.
Questionnaire

• Questionnaire to analyze how the process is carried

out.
Audit report presentation
• Highlight areas that are :
▫ Urgent and important (UI),
▫ Not urgent but important (NUI),
▫ Not urgent not important (NNI))

• As a result of this scheme of classification,

managements can prioritize their steps.
Findings

Positive finding Negative findings

• Recruitment policy is at par with
the industry standards
• Systematic
• MPP is effective
• Optimum utilization of allocated
budget
• Proper distribution of the budget.
• Improper formulation of JD
• No proper information at the time
of interview(communication gap)
• Improper treatment to candidates
• Appointment letters delayed
Recommendations
• Clear and specific Job Description
• Plan the process
• Communication and coordination required.
• Provide proper facilities & seating arrangements
• Computerize the process
Thank You