hrd audit final
TRANSCRIPT
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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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