Conducting a Human Resource Audit: A human resources audit

usually involves review of all HR policies, practices, and procedures,

whether or not they are formal. Audits are indispensable in various areas
of HR. For example, an organisations policies and procedures must
change with the employment laws which are constantly changing if it
hopes to avoid litigation and thrive in the market. A comprehensive policy
manual is one of the best ways to avoid lawsuits. However this is not
enough. You must regularly conduct an employment law/ human
resources audit to make sure that your policies reflect changes in
employment laws.
Methods used in the HR Audit process are:
Interviews: In order to ascertain what the top management thinks about
the future plans and opportunities available for the company, the auditors
conduct individual interviews with the members of the top management.
The top management can provide a perspective for a good HR audit. To
collect information about the effectiveness of the Human Resource
Development System, organisational culture, skills, styles, etc., auditors
conduct group interviews with different level of managers. Interviews help
the auditors in a number of ways. Some of the benefits are:
Observation: Observation method is often used by the auditors to
observe various aspects of the organisation. It helps them to evaluate the
work place and work atmosphere. It also helps them to judge the extent
to which a congenial and a supportive human welfare related climate
exists in the organisation. Auditors mainly observe the physical facilities
and living conditions, meetings, discussions and other transactions,
celebrations and other events related to organisational life and culture,
training and other HRD-related facilities including the classroom, library,
training centre, etc.
Group discussions: For companies having thousands of employees, it is
not always possible to meet each one individually to get feedback. In such
circumstances, group discussions and workshops act as an effective
mechanism to collect information about the effectiveness of the current
system. In order to evaluate various aspects of HRD and for a
participative diagnosis, various diagnostic workshops and group
discussions can be conducted in large organisations. It is preferable to
have cross-functional representation of employees in the same group or
each function separately to keep a homogenous group.

Workshops: These workshops give critical appraisal of policies and

programmes as also initiate the change process. Its a potential diagnostic
tool and can provide lots of information on HR processes and can help
plan further intervention as OD (Organisation Development) Process.
Questionnaires: Auditors use comprehensive questionnaires to garner
information about HRD systems, processes, styles, and competencies. It
helps in benchmarking of data.
Analysis of records and documents: In order to ascertain the
strengths and weaknesses of the human resource system of the
organisation, the auditors scrutinise the published literature of the
company like annual report, performance appraisal forms, training
documents, employees' records files maintained by the HR department,
in-house, journals and periodicals.
Analysis of secondary data: Analysis of secondary data can give a lot
of insight into the assets and liabilities of the company. The analysis may
relate to age profile of the workforce, stagnation in career progression
and analysis of training, etc.
HR audit report: HR audit as a diagnostic tool helps in improving the HR
functions, systems, competencies, culture, team, policies and practices.
HR audit report provides insights into the sources of the problem and
appropriate strategies can be taken. HR audit always keeps the business
goals in focus.