HRD Audit

BK Parmar
Sr. Manager HR
SHRENUJ & CO.
LTD
 Start to End...

"The unexamined work life

is
Socrates’ (469-399 BC) not worth living."

Kaplan (2000)

“The things that get measured gets managed”

 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
 What is HRD?...

Competence Building

Commitment Building

Culture Building
 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.
 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
 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
 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.
 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.
 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
 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
 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.
 HRD Score Card…

Name of the Organisation ABC

HRD HRD HRD Business Overall

System Competence Culture Linkage HRD
Maturity 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
Components to be audited
 HRD Systems Maturity…

The HRD systems maturity assesses the extent to

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

The systems should be appropriate and relevant to

business goals.

It should focus on current and future needs of the

corporation.

The HRD strategies and systems should flow from the

corporate strategies.
 HRD Systems Maturity…

The systems should be well designed and should have

a structural maturity.

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.

The subsystems should be well integrated and should

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

 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
 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

 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)

 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?

 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?
 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

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

Competency Capability
based practices Level 3
Management
Defined

Level 2 Competency
Management
Managed

Level 1 People
Initial Management
 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

 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
SHRE
NUJ

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)
SHRE
NUJ
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.
Thank You