HR Audit

Start to End...

"The unexamined work life is

not worth living."

Socrates’ (469-399 BC)

“The things that get measured gets managed”

Kaplan (2000)
 What is HR Audit?...
• Audit is an examination and verification of
accounts and records.
• HR Audit refers to an examination and evaluation
of policies, procedures and practices to determine
the effectiveness and efficiency of HRM.
• It refers to;
– The measurement of the effectiveness of the
human resource management’s mission,
objectives, strategies, policies, procedures,
programmes and activities.
– The determination of what should or should not
be done in the future as a result of such
measurement.
 What ?...
• HR Audit is a comprehensive evaluation of the
entire gamut of HR activities :-
– HR Cost
– HRD activities
– Health, Env. & Safety
– Legal Compliance
– Quality
– Compensation & Benefits
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What ?...

An HR 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.
 Objectives…..
• To review the whole system of management
programmes with a view of determining the
effectiveness of these programmes.

• To seek explanations and information.

• To evaluate the extent to which line managers have

implemented the policies.

• To evaluate the personnel staff and employees.

 Need
• Number of Employees.
• Organizational Structure.
• Communication and Feed back.
• Branches / Plants.
• Administrative style.
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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 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.
 Areas
• Mission statement of HRM.
• Objectives, goals and strategies of
HRM.
• HR Practices and procedures.
• HRM policies.
• Role of HRM in TQM.
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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 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
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.

 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.
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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.
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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