A Tybms Project Report On HR Audit

SUBMITETED BY: SMITA MAHADEV AVHAD

INDEX Sr. No. 1 4 2 5 3 6 4 9 5 12 6 16 7 18 TOPIC NAME PG NO.

Introduction Approaches To HR Audit Scope Of HR Audit Benefits of HR Audit HR Audit Process HR Audit Checklist Methods of HR Audit

8 28 9 32 10 34 11 36

HR Audit Report HR Audit Inc. Vital HR

Conclusion

INTRODUCTION
HRM includes different functions like HRP, job analysis and design, recruitment, selection, induction, performance appraisal, safety and health, welfare, industrial relations and many more. These functions are performed in furtherance of certain social, functional and personal objectives.

At this stage several questions crop up, for example:

Does the organization do the HRP regularly in various categories?

Does job analysis exist for all positions in the organization? Are all potential sources of recruitment identified and evaluated? Is there a performance evaluation system that helps asses past and potential performance?

Is remuneration programmed designed to motivate employees? Does the HRM practice respond to individual employee needs and aspirations?

It is necessary to take a look at these questions. HR audit is highly useful for this purpose. The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the nonprofits human resources system, and any issues needing resolution. The audit works best when the focus is on analyzing and improving the HR function in the organization.

Definition:
HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization.

APPROACHES TO HR AUDIT
There are five approaches for the purpose of evaluation of HR in any organization
Comparative

approach Outside authority Statistical Compliance approach and Management By Objectives(MBO)

1.

Comparative approach: In this, the auditors identify Competitor Company as the model. The results of their organization are compared with that of the Model Company/ industry. Outside authority approach: In this, the auditors use standards set by an outside consultant as benchmark for comparison of own results.

2.

3.

Statistical approach: In this, Statistical measures are performance is developed considering the companys existing information.

4.

Compliance approach: In this, auditors review past actions to calculate whether those activities comply with legal requirements and industry policies and procedures.

5. Management by objectives (MBO) approach: This approach creates specific goals, against which performance can be measured, to arrive at final decision about industrys actual performance with the set objectives

Scope of audit
Generally, no one can measure the attitude of human being. Hr audit must cover the activities of the department and extend beyond because employees problems are not confined to the HR department alone. So it is very much broad in nature. It should evaluate the personnel function, the use of its procedures by the managers and the impact of these activities on the employees. It covers the following HR areas: 1 Audit of all the HR function. 2 Audit of managerial compliance of personnel policies, procedures and legal provisions. 3 Audit of corporate strategy regarding HR planning, remuneration and other HR activities. staffing, IRs,

Audit of HR function:
This involves audit of all HR activities. For each activity, auditor must (i) determine the objective of each activity, (ii) identify who is responsible for its performance, (iii) review the performance, (iv) develop an action plan to correct deviation, if any (v) follow up the action plan. The following criteria would help measure effectiveness of HR function. Each statement has a four point rating scale varying from very true to not true. a. In your company, all issues are closely related to every other business

process. b. The HR department is represented in strategy building sessions of top management. c. The performance of HR department and the organisation are linked. d. The HR function is given more importance than other functions e. The HR managers have sufficient powers to suggest strategic initiative to the top management.

Benefits of HR Audit
The team that is responsible for the audit should represent a cross-section of the organizations staff, including line staff, middle and upper management and those responsible for HR functions. It provides the various benefits to the organization. These are:
1. 2. 3. 4. 5. 6. 7.

Getting the top management to think in terms of strategic and long-term business plans Clarifying the role of the HRD department and line managers in HRD Streamlining of other management practices Better recruitment policies and more professional staff Increased focus on human resources and human competencies Changes in the styles of top management: Better recruitment policies and more professional staff

CONCLUSION
The Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions. The purpose of the audit is to reveal the strengths and weaknesses in the nonprofits human resources system, and any issues needing resolution. The audit works best when the focus is on analyzing and improving the HR function in the organization. The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it cant tell you what you need to do to address these issues. It is most useful when an

organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organizations mission and objectives can be realized. Finding out what is insufficient and inadequate is the first step toward improvement. If deficiencies are identified, it is important to take steps to correct those deficiencies. Organizations should take that first step only when they are ready to act on the findings, and to make necessary improvements in their HR skills, processes, and systems.