Contents

What is HR Audit ?
Why conduct an HR Audit ?
Who should conduct an HR Audit ?
Approaches to HR Audit
Methods to HR Audit
HR Benchmarking
Culture Audit

What is HR Audit ?
Rigorous assessment & evaluation of current
HR functions and its practices
Assessment of
Strategies , Systems , Practices
Structure & Competencies
Styles & Culture

Giving recommendations for improvements

and chart future plans.
Research on Best Practices and test their
feasibility.

Why conduct an HR Audit ?

To review current HR Performance
To Identify strengths & weaknesses in all HR Functions.
To Identify gaps , irregularities in implementation of policies &
practices and suggest corrective actions.
To evaluate the team and their KRAs.
To Identify contribution of HR Dept. to the organization.
To ensure legal compliances like PF , Gratuity , ESIC etc.
To improve professional image & credibility of HR dept.

Why conduct an HR Audit ?

Concerns by Top Management
Changes in Business such
diversification/expansion
Need for advancements in HR practices.
Ideal Frequency of Audit : should be once
in every one/two years.

Who should conduct an

HR Audit?
Cross Functional Team / Quality Team
Outside agency/consultant

Approaches to HR Audit
Comparative Approach : use competitor company as
model for benchmark.
Outside Authority Approach : Standards set by outside
consultants as benchmark
Statistical Approach : Statistical measure used
to determine benchmarks; HR Dashboards , BSC
tracking
Compliance Approach : comply with legal requirement
industry policy & procedure.

Methods to HR Audit
Step 1 : Briefing & Orientation with team members on why we are
conducting HR Audits.
Step 2 : Decision of which Function of HR to be audited and the in
which order.
Step 3 : Scanning the already existing material information
Appraisal Forms
Training Documents
Employee Files
Recruitment documents
HRIS

Step 4 : Interview with Key Stakeholder and Head HR and Top

management on what respective HR Function is what has to be.

Methods to HR Audit
Step 5 : Group discussions & Interviews with the issues
raised from above.
Interview questions to be framed & developed by the Auditor .

Step 6 : Observations - Physical Facilities , Meetings ,

Trainings , Interviews
Step 7: Data Gathering & Collations
Current Situation
Priorities of the functions
Work Pattern
Issues Identified

Step 8 : Reporting & Recommendations.

HR Benchmarking
Comparison of HR practices with industry best practices.
(Great Paces to work report can be a good research material)
Set strategies & priorities for Head HR.
Steps to Benchmarking ( Derived from
1.
2.
3.
4.
5.
6.
7.
8.

Identify what functions to be benchmarked

Research and identify comparable companies
Decide data collection methods
Measure current performance levels
Project future levels
Communication of benchmarks & gain acceptance
Establish goals & develop action plans.
Track the plans

 Examples of setting benchmarks

Total compensation as a % EBITA
% management positions filled internally
No. of manhours of training / employee
Employee Engagement Practices

HR Audit Checklists
Page 13 & 18

Culture Audit
Studyandexaminationof anorganization'sculturalcharacteristics(such
as itsassumptions,norms, philosophy, andvalues) to determine whether
they hinder or support itsvisionandmission.
The Culture Audit providesinsight into your organization's value system,
programs and practices, and accounts forone-third of our total
assessment.
Steps to culture audit
1.
2.
3.
4.
5.
6.

Laying down Vision , Mission & Values of the company

Creating a questionnaire for the employees
Releasing the survey to the employees
Conducting interviews with key positions such as HODs , Sales
Collecting data & analysis
Presenting Results

The Great Places to work is a well known culture Audit organization.