HR Audit

Human Resource Audit

1. HR Audit Presented By: MBA 2D A bhishek Shandilya 14MBA 1358 Nancy Sindhwani 14MBA 1366 Vikas Chandel 14MBA 1376 Presented To: Dr. Rupali

2. CONTENTS Introduction Purpose of HR audit Objective of HR audit Benefits of HR audit Frequency of HR audit(Period) Significance of HR audit Scope of HR audit Methods of auditing Tasks of Auditor HRM Auditing Process Audit Report

3. INTRODUCTION An HR audit is a process to review implementation of institutions’ policies and procedures, ensuring compliance with employment laws, implement best practices and educate managers.

4. The purpose of the audit is to reveal the strengths and weaknesses in the organization's human resources system and issues needing resolution . The audit works best when the focus is on analyzing and improving the HR function in the organization PURPOSE OF HR AUDIT

5. OBJECTIVES OF HR AUDIT Effectiveness: To review performance of HR Department and its activities to determine effectiveness. Implementation: To locate gaps & failings in applying Polices, Procedures & Practices. Rectification: To take corrective steps to rectify shortcomings . Evaluation : To evaluate HR Staff & employees. Modify: To review & Modify HR System to meet challenges in comparison with other organizations. Questioning: To seek answers to “What,  Why & When” while implementing Policies, Practices in managing HRs

6. Benefits of HR Audit Helps in identifying the G aps between the current state and the standard. Improves HR Department’s Professional Image. E ncouragement of greater responsibility and professionalism among HR members. Reduction of HR costs through more effective personnel procedures. A thorough review of HR information systems. U niformity of HR policies and practices Clarification of HR duties and responsibilities

7. Frequency of HR audit It is best to have a HR audit once in a year. The HR audit, if conducted continuously and regularly, then it becomes a fairly managed process. Usually, the frequency of the audit being conducted depends on the company. Management must see to it that a well efficient audit is done on yearly basis.

8. Essential for Organization success. It Provides Required Feedback. Managing Rising Labor Costs. HR Audit can avoid Government intervention HRP protect Employees interests HR Audit Significance:

9. The Scope of Human Resource Audits • Audit of Corporate Strategy The organization is going to gain competitive advantage. • Audit of the Human Resource Function Human Resource Information System, Staffing and Development. • Audit of Managerial Compliance Human resource policies and procedures. • Audit of Employee Satisfaction To learn how well employee needs are met.

10. Audit of the Human Resource Function 1. Human Resource Information System - Human Resource Plans : Supply and demand estimates; skill inventories; replacement charts and summaries - Job Analysis Information : Job descriptions, Job specifications - Compensation Management : Wage, salary, and incentive levels; Fringe benefit package; Employer-provided services

11. 2. Staffing and Development • Recruiting : sources, availability, employment applications • Selection : selection ratios, selection procedures, equal opportunity. • Training and development : orientation program, training objectives and procedures, learning rates • Career development : internal placement, career planning program, human resource development efforts

12. Audit of Managerial Compliance • Compliance with laws is especially important. When safety, compensation, or labor laws are violated, the government holds the company responsible. • If managers ignore policies or violate employee relationslaws, the audit should uncover these errors so that corrective action can be started.

13. Audit of Employee Satisfaction • It refers to an employee’s general attitude toward his or her job. • When employee needs are unmet, turnover, absenteeism, and union activity are more likely. To learn how well employee needs are met. • The teamcollects information about wages, benefits, supervisory practices, career planning assistance, and other dimensions of job.

14. INDIVIDUAL INTERVIEW METHOD GROUP INTERVIEW METHOD WORKSHOP METHOD QUESTIONNAIRE METHOD OBSERVATION ANALYSIS OF SECONDARY DATA ANALYSIS OF REPORTS, RECORDS. METHODS OF HR AUDIT

15. • Top level management and senior managers are interviewed, individually. It helps in following: •  Knowing their thinking about future plans and opportunities available for the company  Knowing about their expectations from the HR audit  Getting sensitive information pertaining to working styles and culture INDIVIDUAL INTERVIEW METHOD

16. Group interviews and discussions with the employees and executives of large companies for HR audit, facilitate collection of information about effectiveness of existing systems. GROUP INTERVIEW METHOD

17. Workshop Methods also known as Large Scale Interactive Process (LSIP) is conducted in some cases of audit. WORKSHOP METHOD

18. • Feed back about various dimensions of HRD, including the competency base of HRD staff, the styles of line managers, the implementation of various HRD systems, etc are obtained through a detailed questionnaire from individuals or groups for HR audit. • This method helps in benchmarking. QUESTIONNAIRE METHOD

19. • The auditors should physically visit the workplace • To assess the extent to which a congenial and supportive human welfare oriented climate exists in the company. • This is essential because employees are not likely to give their best if they do not live in good surroundings • The observations can be conducted using a check list of questions. OBSERVATION

20.  Analysis of secondary data can give an insight into the HRD assets and liabilities of the company.  Analysis of age profiles of the employees, analysis of the training attended, analysis of the minutes of the meetings held etc., help in determining the assets and liabilities. ANALYSIS OF SECONDARY DATA

21. Tasks of Auditors • Determine the objectives of each activity • Identify who is responsible for 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.

22. HRM AUDITING PROCESS • PHASE 1: FOUNDATIONAL/INITIATION • PHASE 2: ASSESSMENT • PHASE 3: CONCLUDING AND REPORTING

23. PHASE 1: FOUNDATIONAL/INITIATION Determine the purpose and objectives of the audit Determine the scope of the audit Determine the organizational components to be audited Determine the auditing tool to be used Determine costs and resources needed to perform the audit Determine audit team governance

24. PHASE 2: ASSESSMENT • DETERMINE EMPLOYMENT ISSUES ACCOUNTABILITY FORMULATING AUDITING METHODOLOGY AND TOOLS • DEVELOPING A CHECKLIST

25. PHASE 3: CONCLUDING AND REPORTING  REPORT PREPARATION REPORT PRESENTATION QUANTIFY RESULTS  INCLUDE EXECUTIVE SUMMARY  IDENTIFY RISKS  IDENTIFY AND PRIORITIZE SOLUTIONS TO PROBLEMS  DEVELOP A HR IMPROVEMENT PLAN

26. The Process comes to end with preparation of Report. Report may be Clean or Qualified. It is Qualified if HR Performance contains Gaps for which remedies suggested. Report is Clean where Performance is fairly Satisfactory Audit Report

27. HR Audit in News (Business Today) Workforce of Indian railways is its strength To prepare them for future and for enhancing organizational performance. Measure would be adopted to raise employee productivity in line with global standards. It is decided that proper Human Resource Audit would be undertaken. 26-feb-15 Railway Budget Speech Suresh Prabhu Railway Minister Highlights