HRD Audit Final

7/28/2019 HRD Audit Final

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HRD Audit

Submitted By:Abhinav Aggarwal

Danish Vohra

Harvinder Singh

Jiwanjot Singh

Jotsaroop Singh

Juhhie MendirattaManmeet Singh


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What is HRD?

Competence Building

Commitment /Motivation Building

Culture Building


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What is HRD Audit?

An HRD Audit is like annual health check-up,it plays a vital role in instilling a sense ofconfidence in the Management and theHR 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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Why is HRD Audit used? 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 switchover toprofessional 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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Purpose of HRD Audit

The reason for conducting an HR audit :

1.Find out how effective and efficient the

Organisations HR activities are.

2.To determine areas for improvement and identify changes


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Scope Of HRD Audit : Human Resource audits involve an organizations strategic actions

to take an intensely objective look at its HR policies, procedures and

practices. This type of comprehensive review of the organizationscurrent state can help to identify whether specific practice areas orprocesses are adequate, legal and effective. Its five Components are:

Functional Audit

Service Audit

Compliance Audit

Financial Management Audit

Strategic Audit


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Functional Audit This aspect of the HR audit examines:

HRD systems and procedures, encompassing training and development,

Organisation development and career development

Whether the HRD systems and procedures are aligned with the HRM systems

Procedures to promote competence, confidence and performance.This includesjob design, HR planning, performance management systems, selection and staffing, the HR information systems and whether HR helps management keeptrack of costs and benefits in HRD and HRM.

This includes ensuring fairness and consistency in compensation and benefits,employee relations and HRrecord keeping, particularly in regard to providing timely management information


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Service Audit

This aspect of the audit activity looks at the service

responsiveness and reliability of the HR function. This will include an assessment of such things as response times,willingness to help line managers/staff, the knowledge of the HR staff

Compliance Audit

This assesses the degree to which HR is compliant with the relevant legislation e.g. Labour Laws, etc. This part of the audit will assess whether the required policies, practices, and procedures existand to what extent management and labour have been trained to enact these

codes of best practice.


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Financial Management AuditA comprehensive audit of HR systems and procedures

needs to go beyond the inspection level. Basic financial ratios/scorecard measures appropriate for a staff functionlike HR need to be put in place to audit theefficiency of the various HR functions.

Strategic Audit

Each organisation should have an overall peoplemanagement strategy that aims to increase the value of employees to the business. The strategic audit will examine whether the HR strategy, policies and processes are aligned with, and support, the achievement of the businesss mission and objectives.


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Steps in HRD Audit

1. Determine the scope and type of the audit

Determine the breath of the audit and exactly what

areas should be targeted for review.2. Develop the audit questionnaire which will help in

guiding the audit team in scrutinizing all critical areas of a

companys HR practices. Strengths of the job design, how well the department

handles recruitment and selection, and its timeliness

and ability to respond to staffing needs.


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Steps in HRD Audit (contd.)

3. Collect the data

4. Benchmark the findings

Comparison offers insight into how the audit resultscompare against other similarly sized firms, national

standards and/or internal company data.

5. Provide feedback about the results

Summarize the data and provide feedback a

roadmap for action can be developed


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Steps in HRD Audit(contd.)

6. Create action plans

The company must create action plans for implementing the

changes suggested by the audit

7. Foster a climate of continuous improvement

It is important to engage in constant observation and

continuous improvement of the companys policies,

procedures and practices so that the organization never

ceases to keep improving.


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Methodology Adopted

Interviews

Individual Interviews with Top Management Group Interviews with other Staff

Questionnaires

Group Discussions and Workshops

Observation

Analysis of records and documents


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Methodology of HRD Audit

Examines long term and short term plans andvision to assess Competency Requirements

Identifies broad Competency requirements forfuture Business Goals

Examines the existing HRD strategies, systemsand practices and assess their appropriateness tohave the required competencies


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Methodology of HRD Audit

Examines the adequacies and inadequacies ofHRD structure, staff and their competencies,line managers and their attitudes, topmanagement and their support, unions and theirrole in competence building for future

Suggests mechanisms for improving all these inthe business context


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Role of HRD Audit in Business Improvements

It can give many insights into a company'saffairs.

It could get the top management to think interms of strategic and long term business plans.

Changes in the styles of top management

Role clarity of HRD Department and the role ofline 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 Streamlining of other management practices

TQM Interventions


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HRD SCORE CARD T.V. Rao (1999) has introduced the concept of HRD score card.

The HRD Scorecard is a measure of the HRD maturity level of an

organization. The scorecard is based on the following assumptions andtakes into consideration the research based understanding gained inthe last few decades regarding HRD.

The maturity level of HRD in an organization is indicated by thefollowing factors:

1.HRD Systems Maturity

2.HRD Competencies of the Employees including the HR Department

3.HRD Culture of the Organization

4. HRD Influence on the Business Goals or Business Linkages of HRD


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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 presentU Ungraded

Name of the Organisation ABC

HRDSystemsMaturity

B*

HRDCompetenc

e Score

C

HRDCultureGrade

B*

BusinessLinkageGrade

B

OverallHRD

Maturityrating

B*C B*B


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AssumptionCompetent and motivated employees are

needed to provide quality products and services at

competitive rates and ways that enhance customersatisfaction


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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-developedHRD systems and HRD systems Maturity can be measuredthrough HRD audit.

HRD Competence Score

HRD Competencies of the HRD department and the linemanagers play a significant role in implementing the

systems and processes in ways that could ensure employeesatisfaction, competence building and customer satisfactionlinkages. The competencies of the staff and the otheremployees can be measured in terms of an index.


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The HRD Culture

Values and processes created by the HRD tools, staff

and their styles also play a crucial role in buildingsustainable competencies in the organization. These needto be measured and monitored. It is possible in somecorporations (for example small corporations) to have verylittle of HR systems and yet have a high level of HRcompetencies and HR culture.

Business Linkage Score

Business linkages of HRD are very crucial component ofHRD effectiveness.HRD systems competencies and theculture must be linked with the business goals of thecorporation


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The Human Resource Audit as an Improvement Tool

Regardless of the type of company or the size of yourHR department, the HR Audit is a simple, yet

comprehensive tool to analyze and improve youreffectiveness as a function.

The audit is made up of four main steps:

1) Define desired HR practices for your organization

2) Assess current practices against the criterion thatyou have established

3) Analyze the results

4) Establish improvement goals and take action


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Four-Step Approach

Step One--Defining Audit

Statements

A good starting point is to take some time and reflect on the legalrequirements and programs that the department must administer.

Consider your areas of responsibility and traditional HR practicescovered by your function: They may include HR Planning, Staffing,

Performance Management, Employee Relations, Compensation andBenefits, Training and Development, Safety and Wellness.

Employee Surveys, and Communications. Finally, other areas toconsider are company initiatives that the HR function may be

required to support, i.e. internal customer requirements.


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Step Two--Assessing Current

PracticesA good approach is to look for evidence

that supports or refutes each statementmade. Evidence may take the form of

policies and procedures.

The first time the assessment is made, it

may become apparent that the definitionin step one needs improvement ormodification. These changes should benoted and made a part of the next

"improvement cycle."


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Step Three--Analyze the Results It is important to recognize strengths and opportunities for

improvement. As results are reviewed, themes will emergearound specific HR areas.

For example, one company may be very strong inadministration and managing legal requirements. On theother hand, it may need improvement in developing higher-level systems definition.

Another company may be very strong in areas Safety,Security, and Training, but need improvement inCommunication practices that run across the company.


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Step Three--Analyze the Results Reviewing the data in a variety of

perspectives is helpful to formulate a

picture of overall HR performanceagainst the audit. It can reflect thepositive effect of actions taken in previous

years as well as provide information forfuture actions.


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Step Four--Establish Improvement Goals and Take Action

The ideal time to complete an audit is just priorto the annual planning process. With audit

information in hand, you can be poised to takeadvantage of your insights into setting nextyear's goals.

There are two aspects of setting goals:

maintenance of current good practices anddevelopment of improved practices. Knowingthe capacity and capability of the HR departmentand system is critical in developing a realistic

plan.


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Step Four--Establish Improvement Goals and Take Action

This is the point in the audit process,where definitions are reviewed and

modified to create a new and improvedvision of the HR system as you wish it tobe. Doing this on an annual basis allowspractices to be improved and benefitsshared.


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Examples of improved HR measures using the Audit Process:

OSHA incident rates

Development and sharing of Total CompensationPhilosophy

Reduction in throughput time of filling openpositions

Employee turnover rate

HR customer survey results

% of training time/employee

Reduction in throughput time of administrativerequests

Business results


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Advantages of HRD Audit

To ensure effective utilization of HR

To inculcate sense of confidence in management

To develop and sustain organizationalreputation in the society

To perform a due diligence review for variousstakeholders


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ConclusionHRD Audit is a comprehension

evaluation of the current hr strategies

,structure ,style and skills in the context ofthe short and long term business plans ofa company.

its main objective is to align the hrfunction with business goals or to create a

business driven hr function.


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HRD Audit Final

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