HR Audit

Strategic
Functions
Compliance
Issues
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 departments 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
THANK YOU!!!