HR AuditRichard Menes

StrategicFunctions

ComplianceIssues

Aspects of HR Audit

What is HR Audit?

It is a Comprehensive Evaluation of Human Resource Development:

Strategies, Systems and Practices Structures and Competencies Styles and Culture

And their appropriateness to achieve the short and long term business goals of the organization.

Purpose

To assess the effectiveness of the Human Resources function to ensure regulatory compliance

To look for potentially serious problems

To find areas needing improvement

To document processes for use in merger, reorganization or inspection

To address compliance issues

Benefits

Create an HR business plan

Streamline HR work processes

Monitor compliance with established regulations and procedures

Develop user-friendly HR systems

Identifies the contribution of the personnel departments to the organization

Improves professional image of the personnel department

Encourages greater responsibility and professionalism among members of the personnel department

Clarifies the personnel department’s duties and responsibilities

Finds critical personnel problems

To Evaluate and Improve HR Practices in:

Staffing

Compensation and Benefits

Performance Management

Employee Development

Employee Relations

Safety

Reporting and Recordkeeping

Reasons for HR Audit

For expanding, diversifying and entering into a fast growth phase

For promoting more professionalism and professional management

Bench-marking for improving HRD practices

Growth and diversification

Dissatisfaction with any component

Change of leadership

Role of HR 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 of strategic and long term business plans.

Changes in the styles of top management

Role clarity of HRD Department and the role of line managers in HRD

Role of HR 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 appraisal systems and other mechanisms

Streamlining of other management practices

TQM Interventions

Scope

Audit of Corporate Strategy Corporate Strategy concerns how the organization is going to

gain competitive advantage.

Audit of the Human Resource Function Audit touches on Human Resource Information System, Staffing

and Development, and Organization Control and Evaluation.

Audit of Managerial Compliance Reviews how well managers comply with human resource

policies and procedures.

Audit of Employee Satisfaction To learn how well employee needs are met.

Tasks of Auditors

Review the policies and procedures used to achieve these activities.

Prepare a report commending proper objectives, policies, and procedures.

Develop an action plan to correct errors in each activity.

Follow up the action plan to see if it solved the problems found through the audit.

Identify who is responsible for each activity.

Determine the objectives sought by each activity.

Methodology

Interviews

Individual and group Top Management Line Managers HRD Staff Workmen and others

Questionnaires

Observation

Analysis of records and secondary data

Workshops

Task forces and internal

teams

External Auditors have a significant role

Benchmarking of questionnaire data