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HR Audit

Start to End...
"The unexamined work life is
not worth living."
The things that get measured gets managed

Socrates (469-399 BC)
Kaplan (2000)
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.
What is HRD Audit?...
HRD Audt is a comprehensive evaluation of
the existing HRD

Structure,

Strategies,

Systems,

Styles,

Skills / Competencies &

Culture
and their appropriateness to achieve the short
term and longterm goals of the organisation!
HR Audit

"he Human Resources #udit is a process of examining


policies, procedures, documentation, systems, and practices
$ith respect to an organi%ation&s HR functions!

#n audit is a means 'y $hich an organi%ation can measure


$here it currently stands and determine $hat it has to
accomplish to improve its human resources function!
How ?...

(n HRD #udit the skills, styles, systems, strategies, structure is


studied and analysed using a variety of methodologies like
)
intervie$s, *(ndividual and group, "op +anagement, ,ine +anagers,
HRD Staff, -orkmen and others.
)
/uestionnaires,
)
o'servations,
)
availa'le records,
)
$orkshops etc!

"his evaluation helps the organisation have a clear


understanding of the lacunae and 'etter align the HR processes
$ith 'usiness goals!
Why ?...
!r"ansatons underta#e HR audts $or %an& reasons '

"o make the HR function 'usinessdriven!

Change of leadership!

"o take stock of things & to improve HRD for expanding, diversifying, &
entering into a fast gro$th phase!

0or gro$th & diversification!

0or promoting professionalism among employees & to s$itch over to


professional +anagement!

"o find out the reasons for lo$ productivity & improve HRD strategies!

Dissatisfaction $ith a particular component!

"o 'ecome employer of choice!

"o insure the effective utili%ation of an organi%ation&s human resources!

"o revie$ compliance $ith a myriad of administrative regulations!

"o install a sense of confidence in management and the human resources


function that it is $ell managed and prepared to meet potential challenges!

"o maintain or enhance the organi%ation&s and the department&s reputation


in the community!

"o perform a 1due diligence1 revie$ for shareholders or potential


investors/o$ners!
Role of HRD Audit in Business Imrovements!

HRD audit is cost effective!

(t can give many insights into a company2s affairs!

(t could get the top management to think in terms of strategic


and long term 'usiness plans!

Changes in the styles of top management

Role clarity of HRD Department and the role of line managers


in HRD

(mprovements in HRD systems

(ncreased focus on human resources and human competencies

3etter recruitment policies and more professional staff

+ore planning and more cost effective training

Strengthening accounta'ilities through appraisal systems and


other mechanisms
Role of HRD Audit in Business Imrovements!
Role of HRD Audit in Business Imrovements!

(t helps to find out the proper contri'ution of the HR


department to$ards the organi%ation!

Development of the professional image of the HR department


of the organi%ation!

+otivation of the HR personnel!

0ind out the pro'lems and solve them smoothly!

4rovides timely legal re/uirement!

Sound 4erformance #ppraisal Systems!

Systematic 5o' analysis!

Smooth adoption of the changing mindset!


The audit process

4re#udit (nformation

4re audit self assessment

6nsite revie$

Records revie$

#udit report
Scope of audit

#udit of all the HR function!

#udit of managerial compliance of personnel policies,


procedures and legal provisions!

#udit of corporate strategy regarding HR planning, staffing,


(Rs, remuneration and other HR activities!

#udit of the HR climate on employee motivation, morale and


5o' satisfaction!
HRD Score Card(
)*s %odel s +ased on t*e assu%pton t*at'

Competent and committed employees are needed to
provide /uality products & services at competitive
rates & $ays that enhance customer satisfaction!
SHRENUJ
HRD Score Card(
"hese four indices consist of the four pillars of HRD effectiveness! #ll the four
dimensions are assessed using follo$ing ten point rating system!
A, Highest Score and Highest +aturity ,evel
A 7ery High +aturity level
B, High +aturity ,evel
B +oderately High +aturity ,evel
C, +oderate +aturity ,evel
C +oderately lo$ +aturity level
D, ,o$ +aturity ,evel
D 7ery lo$ +aturity level
- 8ot at all present
. 9ngraded
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8ame of the 6rganisation #3C
HRD S&ste%
/aturt&
0rade
HRD
Co%petence
Score
HRD
Culture
0rade
Busness
1n#a"e
0rade
!2erall
HRD
/aturt&
ratn"
B, C B, B B,CB,B
Components to 'e audited
SHRENUJ
HRD Systems Maturity
"he HRD systems maturity assesses the extent to
$hich various HRD su'systems and tools are $ell
designed & are 'eing implemented!

"he systems should 'e appropriate and relevant to 'usiness
goals!

(t should focus on current and future needs of the corporation!

"he HRD strategies and systems should flo$ from the
corporate strategies!
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HRD Systems Maturity

"he systems should 'e $ell designed and should have a
structural maturity!

"hey should 'e implemented $ell!
"he employees should 'e taking them seriously implemented $ell!
"he employees should 'e taking them seriously and follo$ meticulously
$hat has 'een envisaged in each system!

"he overheads of implementation should 'e lo$!



"he su'systems should 'e $ell integrated and should have
internal synergy!

"hey should 'e ade/uate and should take care of the HRD
re/uirements of the organisation!
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HRD Systems Maturity

"he follo$ing su'systems are assessed and


depending upon the extent to $hich they meet the
re/uirements a score is assigned!

+anpo$er planning and recruitment

4erformance +anagement Systems

0eed'ack and Coaching +echanisms

"raining

Career development and Succession planning
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HRD Systems Maturity

:o'rotation

6D (nterventions

HR (nformation systems

-orker Development methods and systems

HR (nformation Systems

4otential #ppraisal and Development


6ther su'systems if any
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HRD Competencies in the Corporation

"his dimension indicates the extent to $hich HRD competencies are $ell
developed in the organisation!

"he HRD Staff

"he "op +anagement

,ine managers and Supervisory Staff

9nion and #ssociation leaders

-orkmen, 6perators and ;rass root level employees


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HRD Competencies in the Corporation
3ac* o$ t*e "roups s assessed on '

"he level of HRD skills they possess

"heir attitudes and support to learning and their o$n development

<xtent to $hich they facilitate learning among others in the corporation


and those $ho $ork $ith them!

"heir attitudes and support to HRD function and systems

(nternal efficiency of the HRD function *HRD Department.


SHRENUJ
HRD Staff
Ho$ professionally /ualified are they=
Do they seem to demonstrate ade/uate kno$ledge 'ase=

#re ade/uately trained in the appropriate HRD systems=

#re they sensitive to internal customer re/uirements=
Ho$ good is their skill 'ase in implementing various systems=
Do they demonstrate 6C"#4#C< values=
#re they /uality conscious=
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HRD Staff
#re they familiar $ith the 'usiness goals of the corporation=
#re they cost conscious=
#re they empathetic=

Do they spend ade/uate time trying to understand the


re/uirements of all categories of employees=
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Top Manaement

Do they understand HRD and its significance in achieving 'usiness goals=


Ho$ supportive are they of HRD interventions and values=
#re their leadership styles facilitative of a learning culture=
#re they $illing to give the time needed for HRD=
Ho$ $ell do they su'scri'e to the HRD values like the 6C"#4#C<
values=
Ho$ $ell do they practice HRD values!
Ho$ committed are they to create a learning culture in the organisation=
Do they invest their time, effort and energies in employee development=
SHRENUJ
!ine Manaers and Super"isory Staff
Ho$ much do they understand the significance of HRD=
#re they interested and motivated to develop themselves=

#re they $illing to spend their time and effort in developing
their su'ordinates=
Ho$ supportive are they of HRD efforts=

Do they have listening and other skills re/uired facilitating


development of their 5uniors=
SHRENUJ
#nion and Association !eaders
Ho$ much developmental role are they playing=
Do they see their o$n role in HRD=
#re they committed to create a learning organisation=

#re they $illing to promote employee development=

#re they positive in their approach and perceive their o$n roles a
supportive of organisation 'uilding=

Do they perceive the significance of <mployee development for


organisation 'uilding=
SHRENUJ
HRD $unction

#de/uacy of manpo$er

#ppropriateness of the structure

Cost consciousness of staff

>uality consciousness of the HRD staff

Responsiveness of the HRD department to the needs of employees,


+anagers, Staff, -orkmen, 9nion ,eaders=

,evel of (nternal customer satisfaction

(nternal operational efficiency of the department=

,evel of internal synergy among staff=

#re they the first to implement HRD systems= Do they implement


them in an exemplary $ay=
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HRD Co%petences n t*e Corporaton(
# HRD Competency maturity core is assigned on the 'asis of the
competency levels of all categories!

A, 4 #ll categories of employees have extremely high competence 'ase in


HRD *kno$ledge, attitudes, values and skills. and the HRD department
has a high internal efficiency and satisfaction levels!

B 4 "he competence levels of every group is at an accepta'le level and the


internal efficiency of the HRD department and the internal customer
satisfaction are accepta'le levels!

D 4 "he competencies of more than one group are 'elo$ accepta'le levels
and/or the HRD department is not internally efficient and does not meet the
re/uirements of the minimum internal customer satisfaction!

- 4 "otal failure on almost


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HRD St&les5 Culture and 6alues(

"he extent to $hich the leadership and managerial styles are


empo$ering and competence 'uilding is assessed 'y studying
the leadership and supervisory styles!

"he extent to $hich the HRD culture and values are practised
and sta'ilised in the corporation are measured!
)
"he HRD culture is culture that promotes Human potential
development!
)
(t is also a culture that promotes a learning organisation!
SHRENUJ
Busness Rele2ance o$ HRD(

"his score indicates the extent to $hich HRD efforts *tools,


processes, culture etc!. are driven to achieve 'usiness goals!

"he 'usiness goals includes?


3usiness <xcellence including profita'ility and other outcomes the
organi%ation is expected to achieve@
(nternal operational efficiencies@
(nternal Customer satisfaction@
<xternal Customer satisfaction@
<mployee motivation and commitment@
Cost effectiveness and cost consciousness among employees@

>uality orientation@
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=
"hank Aou
SHRENUJ
HRD Audit "%s &CMM System...
HRD Audt 7C//
0ocus is on 4eople & HR practices
#ims at evaluating & improving
HRD competencies in any
organisation!
#ims at improving $orkforce
practices in soft$are industry!
3ased on >uality, ">+ & process
improvement models!
3ased on HRD HRD strategies,
structure, competencies, styles, &
culture & takes into consideration
>uality concerns & 6D
Does not 'elieve that organisation
could 'e classified into any stage or
level, assumes that any organisation
could 'e assessed on a BC point
maturity scale on any given
dimension!
Conceptualises the organisation
as passing through D maturity
levels, one superior to the other &
descri'es process areas of each
level!
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&CMM Maturity
$ramewor'...
1e2el 4
7redcta+le
1e2el 3
De$ned
1e2el 8
!pt%9n"
Co%petenc&
/ana"e%ent
Capa+lt&
/ana"e%ent
3%po:ered ;
%easured practces
1e2el 2
/ana"ed
Co%petenc&
+ased practces
Contnuousl& <%pro2n"
practces
7eople
/ana"e%ent
1e2el =
<ntal
SHRENUJ
What is in"o("ed in )ood HRD?...

"op +anagement 4hilosophy and understanding

Competent HR Staff and Department

,ine +anager #ttitudes

9nion and <mployee Support

9se of appropriate Systems

4eriodic Rene$al <xercises

3usiness relevance of HRD systems and 4ractices


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Methodo(oy of HRD Audit

<xamines long term and short term plans and vision to assess Competency
re/uirements

(dentifies 'road competency re/uirements for future 3usiness ;oals

<xamines the existing HRD strategies, systems and practices and assess
their appropriateness to have the re/uired competencies

<xamines the ade/uacies and inade/uacies of HRD structure, staff and


their competencies, line managers and their attitudes, top management and
their support, unions and their role in competence 'uilding for future

Suggests mechanisms for improving all these in the 'usiness context


SHRENUJ
"he HRD Scorecard is a measure of the HRD maturity level of an organi%ation! "he scorecard is 'ased on
the follo$ing assumptions and takes into consideration the research 'ased understanding gained in the last
fe$ decades regarding HRD! )*e %aturt& le2el o$ HRD n an or"an9aton s ndcated +& t*e
$ollo:n" $actors'
HRD Systems +aturity
HRD Competencies of the <mployees including the HR Department
HRD Culture of the 6rgani%ation
HRD (nfluence on the 3usiness ;oals or 3usiness ,inkages of HRD!
)*s %odel s +ased on t*e assu%pton t*at'
- Competent and motivated employees are needed to provide quality products and services at
competitive rates and ways that enhance customer satisfaction.
- HRD S&ste%s /aturt& Score' Competencies and commitment can 'e developed through appropriate
HRD mechanisms *tools and systems.! (n a HRD +ature organi%ation there $ill 'e $elldeveloped HRD
systems and HRD systems +aturity can 'e measured through HRD audit!
HRD Co%petence Score' HRD Competencies of the HRD department and the line managers play a
significant role in implementing the systems and processes in $ays that could ensure employee
satisfaction, competence 'uilding and customer satisfaction linkages! "he competencies of the staff and
the other employees can 'e measured in terms of an index!
- )*e HRD Culture' values and processes created 'y the HRD tools, staff and their styles also play a
crucial role in 'uilding sustaina'le competencies in the organi%ation! "hese need to 'e measured and
monitored! (t is possi'le in some corporations *for example small corporations. to have very little of HR
systems and yet have a high level of HR competencies and HR culture! (n the traditional family o$ned
organi%ations in those years $here there $ere no systems approaches there used to 'e good degree of
HRD culture, $hich has resulted in effective functioning and 'usiness!
- Busness 1n#a"e Score' 3usiness linkages of HRD are very crucial component of HRD effectiveness!
HRD systems, competencies and the culture must 'e aligned $ith the 'usiness goals of the corporation!
"he alignment could 'e ensured through the direct linkages $ith customer satisfaction and employee
motivation indices!

SHRENUJ
HRD Co%petences n t*e Corporaton(
"he HRD system should focus on the a'ove dimensions!
#re the HRD systems aligned to$ards the a'ove mentioned or other
important 'usiness goals of the corporation=
Does the HRD staff reflect ade/uate understanding the commitment to the
'usiness goals of the organisation=

#re the HRD processes and culture drive employees and the corporation
and intervie$s of the auditor $ith the employees! Similar ratings are
assigned for this dimensions!
SHRENUJ

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