HR Audit

Aspects of HR Audit

Strategic Compliance
Functions Issues
 What is HR Audit?

 It is a Comprehensive Evaluation
of Human Resource
Development:

 Strategies, Systems and

Practices
 Structures and Competencies
 Styles and Culture

 And their appropriateness to achieve the short and long

term business goals of the organization.
 Purpose

 To assess the effectiveness of the Human Resources

function to ensure regulatory compliance

 To look for potentially serious problems

 To find areas needing improvement

 To document processes for use in merger, reorganization or

inspection

 To address compliance issues

 Benefits

 Create an HR business plan

 Streamline HR work processes

 Monitor compliance with established regulations and procedures

 Develop user-friendly HR systems

 Identifies the contribution of the personnel departments to the

organization

 Improves professional image of the personnel department

 Encourages greater responsibility and professionalism among

members of the personnel department

 Clarifies the personnel department’s duties and responsibilities

 Finds critical personnel problems

To Evaluate and Improve HR Practices in:

 Staffing

 Compensation and Benefits

 Performance Management

 Employee Development

 Employee Relations

 Safety

 Reporting and Recordkeeping

 Reasons for HR Audit

 For expanding, diversifying and entering into a fast growth

phase

 For promoting more professionalism and professional

management

 Bench-marking for improving HRD practices

 Growth and diversification

 Dissatisfaction with any component

 Change of leadership
 Role of HR Audit in Business Improvements

 HRD audit is cost effective

 It can give many insights

into a company's affairs.

 It could get the top

management to think in
terms of strategic and long
term business plans.

 Changes in the styles of

top management

 Role clarity of HRD

Department and the role of
line managers in HRD
 Role of HR Audit in Business Improvements

 Improvements in HRD systems

 Increased focus on human resources and human

competencies

 Better recruitment policies and more professional staff

 More planning and more cost effective training

 Strengthening accountabilities through appraisal systems

and other mechanisms

 Streamlining of other management practices

 TQM Interventions
 Scope

 Audit of Corporate Strategy

 Corporate Strategy concerns how the organization is going to
gain competitive advantage.

 Audit of the Human Resource Function

 Audit touches on Human Resource Information System, Staffing
and Development, and Organization Control and Evaluation.

 Audit of Managerial Compliance

 Reviews how well managers comply with human resource
policies and procedures.

 Audit of Employee Satisfaction

 To learn how well employee needs are met.
 Tasks of Auditors

 Identify who is responsible for

each activity.

 Determine the objectives sought

by each activity.

 Review the policies and procedures used to achieve these

activities.

 Prepare a report commending proper objectives, policies,

and procedures.

 Develop an action plan to correct errors in each activity.

 Follow up the action plan to see if it solved the problems

found through the audit.
 Methodology

 Interviews  Task forces and internal

teams
 Individual and group
 Top Management  External Auditors have a
 Line Managers significant role
 HRD Staff
 Workmen and others  Benchmarking of
questionnaire data
 Questionnaires

 Observation

 Analysis of records and

secondary data

 Workshops
THANK YOU!!!