HR AUDIT

The word audit comes from latin verb audire, which means, to listen. Listening implies an attempt to know the state of the affairs as they exist and as they are excepted or promised to exist. HR audit evaluates the HR activities used in organization.The audit may include and division or an entire company. According to Schwind, Das and Wagar, HR audit is an examination of the human resources policies, practices, and system of a firm to eliminate deficiencies and improve ways to achieve goals. Role of HR Audit Role of human resources are: Ensuring the effective utilization of the organizations human resources. Reviewing compliance concerns with a myriad of administrative regulations.

Maintaining or enhancing the organizations and the departments reputation in the community.

Establishing a baseline for future improvement for the function. It seeks to determine what works and what does not work in an organization. Requirement of HR Audit Perform procedures regarding the acceptance of the client and the engagement.

Establish controls for deciding whether to accept a client relationship and perform a specific engagement in order to o Minimize the likelihood of association with a client whose management lacks integrity.

o Provide reasonable assurance that the firm undertakes only those engagements that can be completed with professional competence. Types of HR Audit There are two kinds of HR Audits:
1. Strategic

HR Audit: Strategic audits are examinations and of strategic management processes including

evaluations

measurement of corporate performance against the corporate strategy. Whenever a deficiency is noted or performance of an organization is sub-par, the organization may elect to perform a strategic audit.
2. Operational HR Audit: It is a future- orient, systematic, and

independent evaluation of organizational activities. Financial data may be used, but the primary sources of evidence are the operational policies and achievements related to organizational objectives. Scope of HR Audit Specifically, an HR audit covers the fallowing areas: 1. Audit of Human resources Function: This involves audit of all hr activities for each activity, the auditor must Determine the objective of each activity, Identify who is responsible for its performance Review the performance Develop an action plan to correct deviations, if any , between results and goals and
2. Audit of Managerial compliance: This involves audit of managerial

compliance of HR policies, procedures and legal provisions.

3. Audit of the human resources climate: The HRM climate has an

impact on employee motivation, morale and job satisfaction. The quality of this climate can be measured by examining employee turnover, absenteeism, safety records and attitude surveys.

4. Audit

of Corporate Strategy: corporate strategy helps the

organization gain competitive advantage. By assessing the companys internal strengths and weaknesses and its external threats and opportunities, the senior management devises ways of gaining an advantage. Methods of HR Audit Comparative Method: The HR audit team audits and compares the audited organizations results with the best practices of the model organization. This approach is commonly used to compares the audited organizations results with the best practices of the model organization. Statistical Method: This method relies on performance measures drawn from the organizations existing information system from existing records, the HR audit team generates statistical standards against which activities and programs are evaluated. Compliance Method: This methods reviews past practices to determine if actions taken follow legal requirements and organizational policies and procedures the HR audit team often examines a sample of employment , compensation, discipline.

MBO METHOD:
In management by objectives method, managers and specialists set objectives in their area of responsibility. Then they create specific goals against which this performance can be measured. The HR audit team goals against which this performance and compares it with the previously set objectives.
3