HR Audit

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The key takeaways are that HRD aims to develop employee knowledge, skills, and satisfaction for individual and organizational benefit. An HRD audit comprehensively evaluates an organization's HRD strategies, systems, culture and skills to ensure alignment with business goals.

HRD refers to any process or activity that develops employee work knowledge, expertise, productivity and satisfaction over time, whether for personal, team or organizational gains.

An HRD audit evaluates HRD strategies, structure, systems, styles, skills and culture, while an HR audit more comprehensively evaluates the entire scope of HR activities including costs, activities, health and safety, legal compliance, quality, and compensation.

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HRD Audit
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Start to End...

"The unexamined work life is


not worth living."

Socrates’ (469-399 BC)

“The things that get measured gets managed”

Kaplan (2000)
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What is HRD?...

• HRD is any process or activity that, either initially


or over the longer-term, has the potential to
develop adults work-based knowledge, expertise,
productivity, & satisfaction, whether for personal
or group/team gains or for the benefit of an
organisation, community nation or ultimately the
whole humanity
- Mclean & Mclean
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What is HRD?...

• Competence Building

• Commitment Building

• Culture Building
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What ?...

An HRD Audit is like an


annual health check-up, it
plays a vital role in instilling a
sense of confidence in the
Management and the HR
functions of an organisation.
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What is HRD Audit?...


HRD Audit is a comprehensive
evaluation of the existing HRD
• Structure,
• Strategies,
• Systems,
• Styles,
• Skills / Competencies &
• Culture

and their appropriateness to achieve


the short-term and long-term goals
of the organisation.
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HR Audit v/s HRD Audit...

HRD Audit is evaluation of HR Audit is a comprehensive


only few activities :- evaluation of the entire gamut
of HR activities :-
• Strategies,
• Structure, • HR Cost
• Systems, • HRD activities
• Styles • Health, Env. & Safety
• Skills & Competencies • Legal Compliance
• Culture • Quality
• Compensation & Benefits
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How ?...

• In HRD Audit the skills, styles, systems,


strategies, structure is studied and analysed
using a variety of methodologies like
– interviews, (Individual and group, Top Management, Line Managers,
HRD Staff, Workmen and others)
– questionnaires,
– observations,
– available records,
– workshops etc.

• This evaluation helps the organisation have a


clear understanding of the lacunae and better
align the HR processes with business goals.
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Why ?...
Organisations undertake HR audits for many reasons :

• To make the HR function business-driven.


• Change of leadership.
• To take stock of things & to improve HRD for expanding,
diversifying, & entering into a fast growth phase.
• For growth & diversification.
• For promoting professionalism among employees & to switch
over to professional Management.
• To find out the reasons for low productivity & improve HRD
strategies.
• Dissatisfaction with a particular component.
• To become employer of choice.
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Role of HRD 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
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Role of HRD 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
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HRD Score Card…

This model is based on the


assumption that:

Competent and committed employees are


needed to provide quality products &
services at competitive rates & ways that
enhance customer satisfaction.
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HRD Score Card…

Name of the Organisation ABC

HRD HRD HRD Business Overall


System Competenc Culture Linkage HRD
Maturity e Score Grade Grade Maturity
Grade rating

B* C B* B B*CB*B

• These four indices consist of the four pillars of HRD effectiveness. All the four
dimensions are assessed using following ten point rating system.
A* Highest Score and Highest Maturity Level
A Very High Maturity level
B* High Maturity Level
B Moderately High Maturity Level
C* Moderate Maturity Level
C Moderately low Maturity level
D* Low Maturity Level
D Very low Maturity level
F Not at all present
U Ungraded
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Components to be audited
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HRD Systems Maturity…

The HRD systems maturity assesses the


extent to which various HRD subsystems
and tools are well designed & are being
implemented.

➀ The systems should be appropriate and relevant


to business goals.

➁ It should focus on current and future needs of the


corporation.

➂ The HRD strategies and systems should flow from


the corporate strategies.
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HRD Systems Maturity…

➃ The systems should be well designed and should


have a structural maturity.
➄ They should be implemented well.
✔ The employees should be taking them seriously implemented
well.
✔ The employees should be taking them seriously and follow
meticulously what has been envisaged in each system.
✔ The overheads of implementation should be low.

➅ The subsystems should be well integrated and


should have internal synergy.
➆ They should be adequate and should take care of
the HRD requirements of the organisation.
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HRD Systems Maturity…

• The following subsystems are assessed and


depending upon the extent to which they
meet the requirements a score is assigned.
➧ Manpower planning and recruitment

➧ Performance Management Systems

➧ Feedback and Coaching Mechanisms

➧ Training

➧ Career development and Succession planning


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HRD Systems Maturity…


➧ Job-rotation

➧ OD Interventions

➧ HR Information systems

➧ Worker Development methods and systems

➧ HR Information Systems

➧ Potential Appraisal and Development

➧ Other subsystems if any


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HRD Competencies in the Corporation…

This dimension indicates the extent to which HRD


competencies are well developed in the organisation.

★ The HRD Staff

★ The Top Management

★ Line managers and Supervisory Staff

★ Union and Association leaders

★ Workmen, Operators and Grass root level employees


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HRD Competencies in the Corporation…

Each of the groups is assessed on :

★ The level of HRD skills they possess

★ Their attitudes and support to learning and their own


development

★ Extent to which they facilitate learning among others in the


corporation and those who work with them.

★ Their attitudes and support to HRD function and systems

★ Internal efficiency of the HRD function (HRD Department)


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HRD Staff…

• How professionally qualified are they?

• Do they seem to demonstrate adequate knowledge base?

• Are adequately trained in the appropriate HRD systems?

• Are they sensitive to internal customer requirements?

• How good is their skill base in implementing various


systems?

• Do they demonstrate OCTAPACE values?

• Are they quality conscious?


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HRD Staff…

• Are they familiar with the business goals of the


corporation?

• Are they cost conscious?

• Are they empathetic?

• Do they spend adequate time trying to


understand the requirements of all categories of
employees?
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Top Management…
• Do they understand HRD and its significance in achieving
business goals?
• How supportive are they of HRD interventions and values?
• Are their leadership styles facilitative of a learning culture?
• Are they willing to give the time needed for HRD?
• How well do they subscribe to the HRD values like the
OCTAPACE values?
• How well do they practice HRD values.
• How committed are they to create a learning culture in the
organisation?
• Do they invest their time, effort and energies in employee
development?
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Line Managers and Supervisory Staff…

• How much do they understand the significance of


HRD?

• Are they interested and motivated to develop


themselves?

• Are they willing to spend their time and effort in


developing their subordinates?

• How supportive are they of HRD efforts?

• Do they have listening and other skills required


facilitating development of their juniors?
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Union and Association Leaders…

• How much developmental role are they playing?

• Do they see their own role in HRD?

• Are they committed to create a learning organisation?

• Are they willing to promote employee development?

• Are they positive in their approach and perceive their own


roles a supportive of organisation building?

• Do they perceive the significance of Employee development


for organisation building?
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HRD Function…
✔ Adequacy of manpower
✔ Appropriateness of the structure
✔ Cost consciousness of staff
✔ Quality consciousness of the HRD staff
✔ Responsiveness of the HRD department to the needs of
employees, Managers, Staff, Workmen, Union Leaders?
✔ Level of Internal customer satisfaction
✔ Internal operational efficiency of the department?
✔ Level of internal synergy among staff?
✔ Are they the first to implement HRD systems? Do they
implement them in an exemplary way?
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HRD Competencies in the


Corporation…
A HRD Competency maturity core is assigned on the basis
of the competency levels of all categories.

• A* = All categories of employees have extremely high


competence base in HRD (knowledge, attitudes, values and
skills) and the HRD department has a high internal
efficiency and satisfaction levels.
• B = The competence levels of every group is at an
acceptable level and the internal efficiency of the HRD
department and the internal customer satisfaction are
acceptable levels.
• D = The competencies of more than one group are below
acceptable levels and/or the HRD department is not
internally efficient and does not meet the requirements of
the minimum internal customer satisfaction.
• F = Total failure on almost
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HRD Styles, Culture and Values…

• The extent to which the leadership and


managerial styles are empowering and
competence building is assessed by studying the
leadership and supervisory styles.

• The extent to which the HRD culture and values


are practised and stabilised in the corporation are
measured.

– The HRD culture is culture that promotes Human


potential development.
– It is also a culture that promotes a learning organisation.
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Business Relevance of HRD…

• This score indicates the extent to which HRD


efforts (tools, processes, culture etc.) are driven
to achieve business goals.
• The business goals includes:
• Business Excellence including profitability and other
outcomes the organization is expected to achieve;
• Internal operational efficiencies;
• Internal Customer satisfaction;
• External Customer satisfaction;
• Employee motivation and commitment;
• Cost effectiveness and cost consciousness among
employees;
• Quality orientation;
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Thank You
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HRD Audit v/s PCMM System...
HRD Audit PCMM
Aims at evaluating & improving Aims at improving workforce
HRD competencies in any practices in software industry.
organisation.
Focus is on People & HR practices

Based on Quality, TQM & process Based on HRD - HRD strategies,


improvement models. structure, competencies, styles, &
culture & takes into consideration
Quality concerns & OD

Conceptualises the organisation Does not believe that organisation


as passing through 5 maturity could be classified into any stage or
levels, one superior to the other & level, assumes that any organisation
describes process areas of each could be assessed on a 10 - point
level. maturity scale on any given
dimension.
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PCMM Maturity
Framework...
Continuously
Improving Level 5
practices Optimizing
Empowered &
measured
practices
Level 4
Predictable

Competency Capability
based Level 3
Management
practices Defined

Level 2 Competency
Management
Managed

Level 1 People
Initial Management
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What is involved in Good HRD?...


• Top Management Philosophy and understanding

• Competent HR Staff and Department

• Line Manager Attitudes

• Union and Employee Support

• Use of appropriate Systems

• Periodic Renewal Exercises

• Business relevance of HRD systems and Practices


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Methodology of HRD Audit…


✔ Examines long term and short term plans and vision to assess
Competency requirements

✔ Identifies broad competency requirements for future Business


Goals

✔ Examines the existing HRD strategies, systems and practices


and assess their appropriateness to have the required
competencies

✓ Examines the adequacies and inadequacies of HRD structure,


staff and their competencies, line managers and their attitudes,
top management and their support, unions and their role in
competence building for future

✔ Suggests mechanisms for improving all these in the business


context
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• The HRD Scorecard is a measure of the HRD maturity level of an organization. The scorecard is based on
the following assumptions and takes into consideration the research based understanding gained in the last
few decades regarding HRD. The maturity level of HRD in an organization is indicated by the
following factors:
- HRD Systems Maturity
- HRD Competencies of the Employees including the HR Department
- HRD Culture of the Organization
- HRD Influence on the Business Goals or Business Linkages of HRD.
This model is based on the assumption that:
• - Competent and motivated employees are needed to provide quality products and services at
competitive rates and ways that enhance customer satisfaction.

• - HRD Systems Maturity Score: Competencies and commitment can be developed through appropriate
HRD mechanisms (tools and systems). In a HRD Mature organization there will be well-developed HRD
systems and HRD systems Maturity can be measured through HRD audit.
- HRD Competence Score: HRD Competencies of the HRD department and the line managers play a
significant role in implementing the systems and processes in ways that could ensure employee
satisfaction, competence building and customer satisfaction linkages. The competencies of the staff and
the other employees can be measured in terms of an index.
- The HRD Culture: values and processes created by the HRD tools, staff and their styles also play a
crucial role in building sustainable competencies in the organization. These need to be measured and
monitored. It is possible in some corporations (for example small corporations) to have very little of HR
systems and yet have a high level of HR competencies and HR culture. In the traditional family owned
organizations in those years where there were no systems approaches there used to be good degree of
HRD culture, which has resulted in effective functioning and business.
• - Business Linkage Score: Business linkages of HRD are very crucial component of HRD effectiveness.
HRD systems, competencies and the culture must be aligned with the business goals of the corporation.
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HRD Competencies in the Corporation…

The HRD system should focus on the above dimensions.

• Are the HRD systems aligned towards the above mentioned or


other important business goals of the corporation?

• Does the HRD staff reflect adequate understanding the


commitment to the business goals of the organisation?

• Are the HRD processes and culture drive employees and the
corporation and interviews of the auditor with the employees.
Similar ratings are assigned for this dimensions.
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