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HR Audit: - Quazi Sameer Salman

The document discusses HR auditing, including its definition, importance, purpose, objectives, scope, process, methods, reporting, benefits and criticisms. An HR audit examines HR policies, procedures, documentation, systems and practices to ensure compliance, identify gaps or weaknesses, and recommend improvements. It helps evaluate the effectiveness and value of the HR function. A properly executed audit provides recommendations to remedy problems and enhance HR practices.

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Q. Salman
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109 views25 pages

HR Audit: - Quazi Sameer Salman

The document discusses HR auditing, including its definition, importance, purpose, objectives, scope, process, methods, reporting, benefits and criticisms. An HR audit examines HR policies, procedures, documentation, systems and practices to ensure compliance, identify gaps or weaknesses, and recommend improvements. It helps evaluate the effectiveness and value of the HR function. A properly executed audit provides recommendations to remedy problems and enhance HR practices.

Uploaded by

Q. Salman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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HR Audit

-Quazi Sameer Salman


Human Resource Management
HRM Concept Review
• “Process of acquiring, training, appraising, and
compensating employees, and of attending
their labor relations, health and safety and
fairness concerns.”
HR Functions Review
• Recruitment & Placement

• Training & Development

• Compensation

• Employee Relations
Auditing
Auditing
• Definition (in general):

– “The word “audit” comes from the Latin verb audire ,


which means, to listen. Listening implies an attempt to
know the state of the affairs as they exist and as they are
expected/ promised to exist. Auditing as a formal process
is rooted in this feature of listening. Consequently, it is a
diagnostic tool to gauge not only the current status of
things but also the gaps between the current status and
the desired status in the area that is being audited.”
Continued…
• Importance of auditing:

– It ensures proper and timely progress of an


organization by finding out the “gaps” in various
functions of the organization.
– It provides Management with the current picture
and necessary feedback regarding the
operations/functions/processes of the organization
that will curtail rising costs and probable legal
incompliance.
Continued…
• Tasks of an “auditor”:
– 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
Continued…
• General auditing method
1. Develop an understanding of the management
systems and procedures.

2. SWOT analysis of the management systems and


procedures.

3. Gather evidence and verify findings.

4. Validate audit findings and exceptions.


HR Auditing
HR Auditing
• Definition:
– A process of examining policies, procedures,
documentation, systems, and practices with
respect to the organization’s HR functions.

• Importance
– Ensures everything is “under control”
Continued…
• Types:
– Compliance
– Best Practices
– Strategic
– Function specific
HR Sections/Functions for Audit
• Hiring and Onboarding
• Benefits
• Compensation
• Performance evaluation process
• Termination process and exit interviews
• Job descriptions
• Form review
• Personnel file review
Purpose(s) of HR Audit
To learn the strengths and identify any
weaknesses/needs for improvement in the
human resources function/department.
“A properly executed Audit will reveal problem
areas and provide recommendations and
suggestions for the remedy of these problems.”

Focus on: 1) Value, 2) Compliance & 3) Risk


Objectives of HR Audit
• Effectiveness of performance of the HR
department
• Implementation of HR policies and procedures
• To find out the reasons for low productivity and
improve HRD strategies
• Evaluation of the HR staffs and employees
• Modify and review HR systems and challenges
• Questioning: to seek answers to: what happened?
why it happened? Why it did not happen?
Principles of HR Audit
• Need for independence
• Audit activities should be budgeted properly
• Acknowledgment that there are many types of audits
• Each type of an HR audit has its own purpose and objectives.
• Establish timeframes for each phase/step of the audit
• Training of auditors is a must.
• Set standards for the HR audit.
• Agree on reporting template.
• Auditors should sign a confidentiality agreement.
• Auditors should agree beforehand on communication
strategy.
Scope of HR Audit
• Audit of corporate strategy

• Audit of human resource function

• Audit of managerial compliance

• Audit of employee satisfaction


General HR Audit Process

Concluding &
Initiation/Foundational Assessment
Reporting
The HR Audit Cycle
Set or adjust HR
practices

Reevaluate
Measure and
practice and
assess current HR
provide ongoing
practices
HR support.

Compare current
Implement legally employment practice
compliant against legal
employment and requirements and HR
good HR practices good practice
standards

Identify and
recommend areas
for change
Methods of HR Audit
• Individual interview method
• Group interview method
• Workshop method
• Questionnaire method
• Observation
• Analysis of secondary data
• Analysis of reports, records, manuals, and
other published literature.
Reporting
• Reports for:

– Line managers

– HR specialist

– HR Manager
Benefits of HR Audit
• Identification of contributions of HR department
• Helps identify the gaps between the current state and the
standard, thereby streamlining HR work processes
• Encouragement of greater responsibility and professionalism
among HR members
• Clarifications of HR duties and responsibilities
• Stimulation of uniformity of HR policies and practices
• Ensuring timely compliance with legal requirements
• Reduction of HR costs through more effective personnel
procedures
• A thorough review of HR information systems.
Criticisms of HR Audit
• Time consuming

• Maybe biased/impartial

• Unclear effects of the actions


Sample HR Audit Checklist
Conclusion
• Companies should signify HR audits

• Frequency: annually or biannually

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