Human Resources Management

HUMAN RESOURCE AUDIT

Nature of HR Audit

HR Audit is a tool for evaluating the personnel activities of an organization. The audit may include one division or entire company. It gives feedback about HR functions to operating managers and HR specialists. It also shows how well managers are meeting HR duties.

In short HR audit is an overall control check on HR activities in a division or a company and evaluation of how these activities support organization’s strategy.

Basis of HR Audit  (Personnel Research)

1. Wage Surveys
2. Recruitment Sources effectiveness
3. Training efforts effectiveness
4. Supervisor’s effectiveness
5. Industrial settlements
6. Job Analysis
7. Job Satisfaction Survey
8. Employee needs survey
9. Attitude Surveys
10. High accident frequency surveys

Benefits of HR Audit

1. Identification of contributions of HR department
2. Improvement of professional image of HR department
3. Encouragement of greater responsibility and professionalism among HR members
4. Clarification of HR duties and responsibilities
5. Stimulation of uniformity of HR policies and practices
6. Finding critical personnel problems
7. Ensuring timely compliance with legal requirements
8. Reduction of HR costs through more effective personnel procedures
9. Creation of increased acceptance of changes in HR department
10. A thorough review of HR information systems

Scope and Types of HR Audit

HR Audit must cover the activities of the department and extend beyond because the people problems are not confined to HR department alone. Based on this HR audit can be spread across following four different categories.

• Human Resource Function Audit
• Managerial Compliance Audit
• Human Resource Climate Audit

AbsenteeismEmployee Turnover

Accidents

Attitude Surveys

• HR – Corporate Strategy Audit

Approaches to HR Audit

1. Comparative Approach (Benchmarking with another company)
2. Outside Authority Approach (Outside consultants’ standards)
3. Statistical Approach (Statistical measures and tools)
4. Compliance Approach (Legal and company policies) 
5. Management By Objectives Approach (Goals & Objectives based)