HR Audit-DY Patil

8/8/2019 HR Audit-DY Patil

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HRD Audit


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START TO END...

"The unexamined work life is

not worth living."

The things that get measured gets managed

Socrates (469-399 BC)

Kaplan (2000)


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WHAT ISHRD?...

HRD is any process or activity that, either initially orover the longer-term, has the potential to developadults work-based knowledge, expertise, productivity,& satisfaction, whether for personal or group/teamgains or for the benefit of an organisation, communitynation or ultimately the whole humanity

- Mclean &

Mclean


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WHAT ISHRD?...

Competence Building

Commitment Building

Culture Building


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WHAT ?...

An HRD Audit is like an annual

health check-up, it plays a vital

role in instilling a sense of

confidence in the Management

and the HR functions of an

organisation.


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WHAT ISHRD AUDIT?...

HRD Audit is a comprehensiveevaluation of the existing HRD

Structure,Strategies,

Systems,Styles,Skills / Competencies &Culture

and their appropriateness to achieve theshort-term and long-term goals of theorganisation.


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HR AUDIT V/SHRD AUDIT...

HRD Audit is evaluation ofonly few activities :-

Strategies,

Structure,

Systems,

Styles

Skills & Competencies

Culture

HR Audit is a comprehensiveevaluation of the entire gamut

of HR activities :-

HR Cost

HRD activities

Health, Env. & Safety

Legal Compliance

Quality

Compensation & Benefits


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HOW?...

In HRD Audit the skills, styles, systems, strategies,structure is studied and analysed using a variety ofmethodologies like

interviews, (Individual and group, Top Management, Line Managers,HRD Staff, Workmen and others)

questionnaires,

observations,

available records,

workshops etc.

This evaluation helps the organisation have a clearunderstanding of the lacunae and better align theHR processes with business goals.


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WHY?...

Organisations undertake HR audits for many reasons :

To make the HR function business-driven.

Change of leadership.

To take stock of things & to improve HRD for expanding,diversifying, & entering into a fast growth phase.

For growth & diversification.

For promoting professionalism among employees & to switch overto professional Management.

To find out the reasons for low productivity & improve HRDstrategies.

Dissatisfaction with a particular component.

To become employer of choice.


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ROLE OF HRD 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 ofstrategic and long term business plans.

Changes in the styles of top management

Role clarity of HRD Department and the role of linemanagers in HRD


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ROLE OF HRD 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 appraisalsystems and other mechanisms


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HRD SCORE CARD

This model is based on the assumptionthat:

Competent and committed employees are

needed to provide quality products &

services at competitive rates & ways that

enhance customer satisfaction.


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HRD SCORE CARD

These four indices consist of the four pillars of HRD effectiveness. All the fourdimensions are assessed using following ten point rating system.

A* Highest Score and Highest Maturity Level

A Very High Maturity levelB* High Maturity LevelB Moderately High Maturity LevelC* Moderate Maturity LevelC Moderately low Maturity levelD* Low Maturity LevelD Very low Maturity levelF Not at all present

U Ungraded

Name of the Organisation ABC

HRDSystemMaturityGrade

HRDCompetenceScore

HRDCultureGrade

BusinessLinkageGrade

OverallHRDMaturityrating

B* C B* B B*CB*B


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Components to be audited


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HRD SYSTEMS MATURITY

The HRD systems maturity assesses theextent to which various HRD subsystems andtools are well designed & are beingimplemented.

The systems should be appropriate and relevant tobusiness goals.

It should focus on current and future needs of thecorporation.

The HRD strategies and systems should flow from thecorporate strategies.


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The systems should be well designed and shouldhave a structural maturity.

They should be implemented well.

The employees should be taking them seriously implementedwell.

The employees should be taking them seriously and followmeticulously what has been envisaged in each system.

The overheads of implementation should be low.

The subsystems should be well integrated andshould have internal synergy.

They should be adequate and should take care ofthe HRD requirements of the organisation.


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The following subsystems are assessed anddepending upon the extent to which they meetthe requirements a score is assigned.

Manpower planning and recruitment

Performance Management Systems

Feedback and Coaching Mechanisms

Training

Career development and Succession planning


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Job-rotation

OD Interventions

HRInformation systems

Worker Development methods and systems

HR Information Systems

Potential Appraisal and Development

Other subsystems if any


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HRD COMPETENCIES IN THE

CORPORATION

This dimension indicates the extent to which HRD competenciesare well developed in the organisation.

The HRD Staff

The Top Management

Line managers and Supervisory Staff

Union and Association leaders

Workmen, Operators and Grass root level employees


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HRD COMPETENCIES IN TH

CORPORATION

Each of the groups is assessed on :

The level of HRD skills they possess

Their attitudes and support to learning and their owndevelopment

Extent to which they facilitate learning among others in thecorporation and those who work with them.

Their attitudes and support to HRD function and systems

Internal efficiency of the HRD function (HRD Department)


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HRD STAFF

y How professionally qualified are they?

y Do they seem to demonstrate adequate knowledge base?

y Are adequately trained in the appropriate HRD systems?

y Are they sensitive to internal customer requirements?

y How good is their skill base in implementing varioussystems?

y Do they demonstrate OCTAPACE values?

y Are they quality conscious?


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HRD STAFF

y Are they familiar with the business goals of the

corporation?

y Are they cost conscious?

y Are they empathetic?

Do they spend adequate time trying to understand the

requirements of all categories of employees?


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TOP MANAGEMENT

Do they understand HRD and its significance in achievingbusiness goals?

y How supportive are they of HRD interventions and values?

y Are their leadership styles facilitative of a learning culture?

y Are they willing to give the time needed for HRD?

y How well do they subscribe to the HRD values like theOCTAPACE values?

y How well do they practice HRD values.

y How committed are they to create a learning culture in theorganisation?

y Do they invest their time, effort and energies in employeedevelopment?


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LINE MANAGERS AND SUPERVISORY

STAFF

y How much do they understand the significance of HRD?

y Are they interested and motivated to develop

themselves?

y Are they willing to spend their time and effort indeveloping their subordinates?

y How supportive are they of HRD efforts?

Do they have listening and other skills requiredfacilitating development of their juniors?


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UNION AND ASSOCIATION

LEADERS

y How much developmental role are they playing?

y Do they see their own role in HRD?

y Are they committed to create a learning organisation?

y Are they willing to promote employee development?

y Are they positive in their approach and perceive their own

roles a supportive of organisation building?

Do they perceive the significance of Employee developmentfor organisation building?


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HRD FUNCTION

Adequacy of manpower

Appropriateness of the structure

Cost consciousness of staff

Quality consciousness of the HRD staff

Responsiveness of the HRD department to the needs ofemployees, Managers, Staff, Workmen, Union Leaders?

Level ofInternal customer satisfaction

I

nternal operational efficiency of the department? Level of internal synergy among staff?

Are they the first to implement HRD systems? Do theyimplement them in an exemplary way?


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HRD COMPETENCIES INTHE

CORPORATION

A HRD Competency maturity core is assigned on the basis of thecompetency levels of all categories.

A* = All categories of employees have extremely high competencebase in HRD (knowledge, attitudes, values and skills) and theHRD department has a high internal efficiency and satisfactionlevels.

B =The competence levels of every group is at an acceptable leveland the internal efficiency of the HRD department and theinternal customer satisfaction are acceptable levels.

D = The competencies of more than one group are belowacceptable levels and/or the HRD department is not internallyefficient and does not meet the requirements of the minimuminternal customer satisfaction.

F =Total failure on almost


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HRD STYLES, CULTURE AND

VALUES

The extent to which the leadership and managerialstyles are empowering and competence building isassessed by studying the leadership and

supervisory styles.

The extent to which the HRD culture and valuesare practised and stabilised in the corporation aremeasured.

The HRD culture is culture that promotes Humanpotential development.

It is also a culture that promotes a learning organisation.


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BUSINESS RELEVANCE OF HRD

This score indicates the extent to which HRD efforts(tools, processes, culture etc.) are driven to achievebusiness goals.

The business goals includes:y Business Excellence including profitability and other

outcomes the organization is expected to achieve;

y Internal operational efficiencies;

y Internal Customer satisfaction;

y External Customer satisfaction;

y Employee motivation and commitment;y Cost effectiveness and cost consciousness among

employees;

Quality orientation;


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HRD Audit v/s PCMM System...

HRDAudit PCMM

Focus is on People & HR practices

Aims at evaluating & improving

HRD competencies in any

organisation.

Aims at improving workforce

practices in software industry.

Based on Quality, TQM & process

improvement models.

Based on HRD - HRD strategies,

structure, competencies, styles, &

culture & takes into consideration

Quality concerns & OD

Does not believe that organisation

could be classified into any stage or

level, assumes that any organisatio

could be assessed on a 10 - point

maturity scale on any givendimension.

Conceptualises the organisation

as passing through 5 maturity

levels, one superior to the other &

describes process areas of each

level.


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PCMM MATURITYFRAMEWORK...

Level 4

Predictable

Level 3

Defined

Level 5Optimizing

Competency

Management

Capability

Management

Empowered &

measured practices

Level 2

Managed

Competency

based practices

Contin

uo

usly Impro

vingpractices

People

Management

Level 1

Initial


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WHAT IS INVOLVED IN GOOD

HRD?...

Top Management Philosophy and understanding

Competent HR Staff and Department

Line Manager Attitudes

Union and Employee Support

Use of appropriate Systems

Periodic Renewal Exercises

Business relevance of HRD systems and Practices


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METHODOLOGYOFHRD AUDIT

Examines long term and short term plans and vision to assessCompetency requirements

Identifies broad competency requirements for future BusinessGoals

Examines the existing HRD strategies, systems and practices andassess their appropriateness to have the required competencies

Examines the adequacies and inadequacies of HRD structure,staff and their competencies, line managers and their attitudes,

top management and their support, unions and their role incompetence building for future

Suggests mechanisms for improving all these in the businesscontext


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The HRD Scorecard is a measure of the HRD maturity level ofan organization. The scorecard is based on the followingassumptions and takes into consideration the research basedunderstanding gained in the last few decades regarding HRD.The maturity level of HRD in an organization is indicatedby the following factors:- HRD Systems Maturity- HRD Competencies of the Employees including the HRDepartment- HRD Culture of the Organization-

HRD Influence on the Business Goals or Business Linkagesof HRD.

This model is based on the assumption that:

- Competent and motivated employees are needed toprovide quality products and services at competitive

rates and ways that enhance customer satisfaction.


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- HRD Systems Maturity Score: Competencies andcommitment can be developed through appropriateHRD mechanisms (tools and systems). In a HRD Mature

organization there will be well-developed HRD systems

and HRD systems Maturity can be measured through HRDaudit.

- HRD Competence Score: HRD Competencies of the HRD

department and the line managers play a significant role inimplementing the systems and processes in ways that couldensure employee satisfaction, competence building andcustomer satisfaction linkages. The competencies of the staffand the other employees can be measured in terms of an

index.


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- The HRD Culture: values and processes created by the HRD tools, staff andtheir styles also play a crucial role in building sustainable competencies in theorganization. These need to be measured and monitored. It is possible in somecorporations (for example small corporations) to have very little of HR systemsand yet have a high level of HR competencies and HR culture. In thetraditional family owned organizations in those years where there were no

systems approaches there used to be good degree of HRD culture, which hasresulted in effective functioning and business.

- Business Linkage Score: Business linkages of HRD are very crucialcomponent of HRD effectiveness. HRD systems, competencies and theculture must be aligned with the business goals of the corporation. Thealignment could be ensured through the direct linkages with customersatisfaction and employee motivation indices.


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HRD COMPETENCIES IN THE

CORPORATION

The HRD system should focus on the above dimensions.

y Are the HRD systems aligned towards the above mentioned orother important business goals of the corporation?

y Does the HRD staff reflect adequate understanding thecommitment to the business goals of the organisation?

Are the HRD processes and culture drive employees and thecorporation and interviews of the auditor with the employees.Similar ratings are assigned for this dimensions.

HR Audit-DY Patil

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