HR AUDIT

MEANING OF HR AUDIT The Human Resources (HR) Audit is a process of examining

policies, procedures, documentation, systems, and practices with respect to an organization’s HR functions.

The purpose of the audit is to reveal the strengths and weaknesses in the organization's human resources system and any issues needing resolution.

The audit works best when the focus is on analysing and improving the HR function in the organization.

OBJECTIVES OF HR AUDIT Effectiveness of performance of HR Department

Implementation of HR policies, procedures; To find out the reasons for low productivity and improve HRD

Strategies; Evaluation of the HR staffs & employee; Modify and Review HR system & challenges Questioning: To seek answers to : What happened ? Why did it

happen? Why did it not happen?

TYPES OF HR AUDITS Compliance: Focuses on how well the company is complying

with current federal, state and local laws and regulations. Best Practices: Helps the organization maintain or improve a

competitive advantage by comparing its practices with those of companies identified as having exceptional HR practices.

Strategic: Focuses on strengths and weaknesses of systems and processes to determine whether they align with the HR department’s and/or the company’s strategic plan.

Function-Specific: Focuses on a specific area in the HR function (e.g., payroll, performance management, records retention, etc.)

AUDIT OF THE HUMAN RESOURCE FUNCTION

1. Human Resource Information System

2. Staffing and Development

3. Organization Control and Evaluation

HUMAN RESOURCE INFORMATION SYSTEM

Human Resource Plans : Supply and demand estimates; skill inventories; replacement charts and summaries

Job Analysis Information : Job standards, Job descriptions, Job specifications

Compensation Management : Wage, salary, and incentive levels; Fringe benefit package; Employer-provided services

Staffing and Development

Recruiting : sources, availability, employment applications

Selection : selection ratios, selection procedures, equal opportunity.

Training and development : orientation program, training objectives and procedures, learning rates

Career development : internal placement, career planning program, human resource development efforts

Organization Control and Evaluation

Performance appraisals : standards and measures of performance, performance appraisal techniques, evaluation interview.

Labour-Management Relations : Legal compliance, management rights, dispute resolution problems.

Human Resource Controls : employee communications, discipline procedures, change and development procedures

BENEFITS OF HR AUDIT1. Identifies contribution of HR Department.

2. Improves HR Department’s Professional Image.

3. Fosters greater Responsibility & Professionalism amongst HR Staff.

4. Classifies HR Department’s Responsibilities & Duties.

5. Stimulates Uniformity of Personnel Policies & Practices.

6. Identifies Critical personnel problems.

7. Ensures Timely Legal Compliance Requirements.

8. Reduces HR Costs

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