HR Audit

Strategic
Functions
Compliance
Issues
Aspects of HR Audit

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
 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.
 Identify who is responsible for
each activity.
 Determine the objectives sought
by each activity.

Methodology
 Interviews
 Individual and group
 Top Management
 Line Managers
 HRD Staff
 Workmen and others
 Questionnaires
 Observation
 Analysis of records and
secondary data
 Workshops
 Task forces and internal
teams
 External Auditors have a
significant role
 Benchmarking of
questionnaire data

HR Audit

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HR Audit