HUMAN RESOURCE AUDIT - DEFINITION:
Human Resource Audit is a systematic assessment of the strengths, limitations, and developmental needs of its existing human resources in the context of organizational performance - (Flamholtz, 1987)
NEED FOR H.R. AUDIT:
Top Management saw solutions to their problems, issues, and challenges in HRD to face business competition and to achieve organizational goals.
PURPOSE OF H.R. AUDIT:
1. To examine and pinpoint strength and weaknesses related to H.R. areas and Skills and Competencies to enable an organization to achieve its long-term and short-term goals.
2. To increase the effectiveness of the design and implementation of human resource policies, planning, and programs.
3. To help human resource planners develop and update employment and program plans.
SCOPE OF HUMAN RESOURCE AUDIT
Whenever the H.R. Audit it taken up, the scope is decided. Audit need not be exhaustive, but should be focused on a particular function of H.R.M. such as Training and Development, Performance Appraisal, Compensation, etc.. However, the objective and approach of H.R. Audit, more or less, remains the same, regardless of scope.
APPROACH TO H.R. AUDIT
1. Self-directed surveys.
2. Task Forces within the organization.
3. Outside Consultants.
AUDITING PROCESS: STEPS IN H.R. AUDIT
Auditing process varies from organizations to organizations.
Generally involves following STEPS:
STEP ONE: Briefing and Orientation:
Key Staff Members meet:
i. To discuss particular issues considered to be important.
ii. To chart out audit procedures, and
iii. To develop plans and program of audit.
STEP TWO: Scanning material information:
Scrutiny of all available information pertaining
to personnel, personnel handbooks and manuals,
guides, appraisal forms, computer capabilities and
any other related information.
STEP THREE: Surveying employees:
a. Interview with key managers, functional executives,
Top functionaries in the organization, and employees
Representatives, if necessary.
b. The purpose is to pinpoint issues of concern,
Present strengths, anticipated needs, and managerial
views on human resources.
STEP FOUR: Conducting interviews:
I. What questions to be asked are developed during
scanning of information.
II. It is better for H.R. Audit if clarity about the key
factors of H.R.M. selected for audit and the related
questions that need to be examined.
STEP FIVE: Synthesizing:
The data gathered is synthesized to present the
a. Current Situation.
b. Priorities.
c. Staff pattern, and
d. Issues identified.
STEP SIX; Reporting:
1. The results of the audit are discussed with
Managers and Staff Specialists, in several
rounds.
2. Important issues are identified for
inclusion in the formal Report.
H.R. AUDIT
TOPICS (AREAS) FOR INTERVIEW QUESTIONNAIRES
AND RELATED ASPECTS
1. INFORMATION
- COVERAGE
- SOURCE
- ADEQUACY
- GAPS
2. FORECASTING
- METHODOLOGY
- RELIABILITY
- TESTABILITY
- BUDGETING
- TIME ORIENTATION
- TECHNOLOGY PERSPECTIVE
3. TRAINING AND DEVELOPMENT
- NEED ASSESSMENT
- SELECTION CRITERIA
- LEVELS COVERED AND FREQUENCY
- INTERNAL VS EXTERNAL TRAINING
- QUALITY CONSCIOUSNESS
- CHANGING NEEDS
- CLIMATE FOR SELF-DEVELOPMENT
4. PERFORMANCE APPRAISAL
- VALIDITY OF APPRAISAL PROCESS
- FITNESS
- BENEFITS AND/OR
DRAWBACKS/PROBLEMS
- KNOW-HOW OF APPRAISING
- CLEAR OBJECTIVES
- UNIFORMITY IN PROCESS
- UNDERLYING BENCHMARKS
- CONSISTENCY IN RATINGS
- LINKAGES WITH PAY
- FEEDBACK TO EMPLOYEES
- CHANGING NEEDS
5. MANAGEMENT SUCCESSION PLANNING
- POLICY FORMULATION
- IDENTIFYING KEY POSITIONS
- AVAILABILITY OF SUCCESSORS
- MATCHING FUTURE NEEDS
- RESPONSIBILITY FOR GROOMING
AND DEVELOPING
- HANDLING NON/POOR PERFORMERS
6. COMPENSATION
- APPROPRIATENESS OF POLICIES
- COMPANY PHILOSOPHY
- ADEQUACY OF REWARDS
- NATURE OF JOB DESCRIPTIONS
- FLEXIBILITY IN JOB EVALUATION SYSTEMS
- CONTROL OVER COSTS
- RATIONALE OF REWARD SYSTEM
- OPPORTUNITIES FOR IMPROVEMENT
7. AFFIRMATIVE ACTION
- EFFICIENCY OF ACTION PROGRAMMES
- LESSONS FOR FUTURE
8. SPECIAL ASSIGNMENT
(OTHER H. R. FUNCTIONS)
- CLARITY
- COMMENTS
- ACTIVITIES JURISDICTION
9. NEED INTER-RELATIONSHIPS
- UNIQUENESS
- DISTINCTIVENESS
- PRESENCE AND AWARENESS OF ABOUT COMPANY'S H. R. POLICY
- CLARITY ON OBJECTIVES OF
H.R. AUDIT
- FUTURE OUTLOOK ON PHILOSOPHY
* CAPABILITIES ON IMPLEMENTATION
10. THE STAFF FUNCTION
(THE H.R. STAFF)
- EXPECTATION FROM HUMAN RESOURCE STAFF
- DEGREE OF SATISFACTION
- ADEQUACY
- ATTITUDE AND APPROACH
- CAPABILITY AND POTENTIAL
- SUGGESTION FOR CHANGE
CHALLENGES FOR H.R. DEPARTMENT
EIGHT CHALLENGES IDENTIFIED
BY DAVE ULRICH (1997)
1. GLOBALIZATION INVOLVES
- NEW MARKETS
- NEW PRODUCTS
- NEW MINDSETS
- NEW COMPETENCIES
- NEW WAYS OF THINKING
H. R. DEPARTMENTS WILL NEED TO CREATE
MODELS AND PROCESSES FOR ACHIEVING:
- GLOBAL ACTIVENESS
- COMPETITIVENESS
- EFFECTIVENESS
2. VALUE CHAIN FOR GLOBAL
COMPETITIVENESS AND HR SERVICES
- BUILDING CUSTOMER-RESPONSIVENESS ORGANIZATION THROUGH:
a. Innovation
b. Faster Decision Making
c. Price or Value Advantage
d. Effective linking with Suppliers
3. GROWTH OF ORGANIZATION
- By INCREASING Customers
- BY MERGERS
- BY ACQUISITION
- BY JOINT VENTURES
HR ISSUES INVOLVED:
- Having EXECUTIVES with BUSINESS MINDSET.
- For CUTTING COST on hiring PEOPLE.
- For overcoming CHALLENGE in New Business.
4. BUILDING ORGANIZATIONAL CAPABILITIES
- Reviewing Existing Capabilities
- New Capabilities.
- Aligning Capabilities with Business Strategies.
5. MANAGING CHANGE
- Adopting some new H.R. Practices.
- Learning some New Skills and Attitudes.
- Unlearning some existing skills and Attitudes.
- Modifying Mindset of Executives and Employees.
6. MAKING TECHNOLOGY VIABLE
- Finding out ways and means to
make technology successful.
7. ATTRACTING AND RETAINING
COMPETENT PEOPLE
- Attracting Talented People.
- Retaining them.
- Utilizing them suitably.
8. TRANSFORMING ORGANIZATION
- Creating fundamental and lasting changes.
PRINCIPLES FOR HRM EFFECTIVENESS
SIX PRINCIPLES OF Dr. T. V. RAO ARE BASED ON HIS OBSERVATIONS AND PERSONAL KNOWLEDGE ABOUT THE 11 NATIONAL HRD AWARD WINNERS, DURING THE PERIOD FROM 1989 TO 1997.
DR. RAO OBSERVED, FOLLOWING COMMON TRAITS AND CHARACTERISTICS IN THE AWARDEES:
i. ROLE MAKERS NOT ROLE TAKERS.
II. INTEGRATION OF HR POLICIES AND PRACTICES
WITH COMPANY BUSINESS.
III. VERSATILITY FOR ONE ROLE TO OTHER.
IV. THRUST FOR LEARNING.
V. ALL ARE NOT HR MANAGERS.
VI. READY TO HANDLE LINE RESPONSIBILITIES.
VII. HAVING HIGH APPLIED BEHAVIORAL SCIENCE ORIENTATION.
SIX PRINCIPLES FOR BECOMING AN EFFECTIVE
HR MANAGER:
1. RESPECTING EACH OTHER'S TIME.
2. BECOMING TRUSTWORTHY AND PROMOTING TRUSTWORTHINESS.
3. CONTINUOUS INTROSPECTION OF ROLES AND RESPONSIBILITY OF SELF AND THE GROUP.
4. LEARNING FROM NEIGHBORS FOR CHANGE AND REFLECTION.
5. PAYING ADEQUATE ATTENTION TO THE CULTURE AND VALUES IN THE COMPANY AND THE COUNTRY.
6. USING PERSONNEL POLICIES FOR EMPOWERING EMPLOYEES AND PROMOTING MANAGERIAL EFFECTIVENESS AND NOT FOR BLOCKING CREATIVITY AND INNOVATION.
H. R. COMPETENCIES
1. Knowledge of H.R. practices:
- Staffing.
- Development.
- Appraisal.
- Rewards.
- Organizational Planning.
- Communication, Etc...
2. Mastery of Human Resource:
- Every thing about H.R.
3. Knowledge of Business:
It means knowing about:
- Financial.
- Strategic.
- Technological variables and their influence on business.
4. Mastery over Change process and Change Management:
- Creating Meaning.
- Problem Solving.
- Innovation.
- Transformation.
- Relationship Influence.
- Role Influence.
5. Mastery of Business:
It means knowing about following capabilities of the
organization:
- Business,
- Financial.
-
From India, Hyderabad
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41Human Resource Audit is a systematic assessment of the strengths, limitations, and developmental needs of its existing human resources in the context of organizational performance - (Flamholtz, 1987)
NEED FOR H.R. AUDIT:
Top Management saw solutions to their problems, issues, and challenges in HRD to face business competition and to achieve organizational goals.
PURPOSE OF H.R. AUDIT:
1. To examine and pinpoint strength and weaknesses related to H.R. areas and Skills and Competencies to enable an organization to achieve its long-term and short-term goals.
2. To increase the effectiveness of the design and implementation of human resource policies, planning, and programs.
3. To help human resource planners develop and update employment and program plans.
SCOPE OF HUMAN RESOURCE AUDIT
Whenever the H.R. Audit it taken up, the scope is decided. Audit need not be exhaustive, but should be focused on a particular function of H.R.M. such as Training and Development, Performance Appraisal, Compensation, etc.. However, the objective and approach of H.R. Audit, more or less, remains the same, regardless of scope.
APPROACH TO H.R. AUDIT
1. Self-directed surveys.
2. Task Forces within the organization.
3. Outside Consultants.
AUDITING PROCESS: STEPS IN H.R. AUDIT
Auditing process varies from organizations to organizations.
Generally involves following STEPS:
STEP ONE: Briefing and Orientation:
Key Staff Members meet:
i. To discuss particular issues considered to be important.
ii. To chart out audit procedures, and
iii. To develop plans and program of audit.
STEP TWO: Scanning material information:
Scrutiny of all available information pertaining
to personnel, personnel handbooks and manuals,
guides, appraisal forms, computer capabilities and
any other related information.
STEP THREE: Surveying employees:
a. Interview with key managers, functional executives,
Top functionaries in the organization, and employees
Representatives, if necessary.
b. The purpose is to pinpoint issues of concern,
Present strengths, anticipated needs, and managerial
views on human resources.
STEP FOUR: Conducting interviews:
I. What questions to be asked are developed during
scanning of information.
II. It is better for H.R. Audit if clarity about the key
factors of H.R.M. selected for audit and the related
questions that need to be examined.
STEP FIVE: Synthesizing:
The data gathered is synthesized to present the
a. Current Situation.
b. Priorities.
c. Staff pattern, and
d. Issues identified.
STEP SIX; Reporting:
1. The results of the audit are discussed with
Managers and Staff Specialists, in several
rounds.
2. Important issues are identified for
inclusion in the formal Report.
H.R. AUDIT
TOPICS (AREAS) FOR INTERVIEW QUESTIONNAIRES
AND RELATED ASPECTS
1. INFORMATION
- COVERAGE
- SOURCE
- ADEQUACY
- GAPS
2. FORECASTING
- METHODOLOGY
- RELIABILITY
- TESTABILITY
- BUDGETING
- TIME ORIENTATION
- TECHNOLOGY PERSPECTIVE
3. TRAINING AND DEVELOPMENT
- NEED ASSESSMENT
- SELECTION CRITERIA
- LEVELS COVERED AND FREQUENCY
- INTERNAL VS EXTERNAL TRAINING
- QUALITY CONSCIOUSNESS
- CHANGING NEEDS
- CLIMATE FOR SELF-DEVELOPMENT
4. PERFORMANCE APPRAISAL
- VALIDITY OF APPRAISAL PROCESS
- FITNESS
- BENEFITS AND/OR
DRAWBACKS/PROBLEMS
- KNOW-HOW OF APPRAISING
- CLEAR OBJECTIVES
- UNIFORMITY IN PROCESS
- UNDERLYING BENCHMARKS
- CONSISTENCY IN RATINGS
- LINKAGES WITH PAY
- FEEDBACK TO EMPLOYEES
- CHANGING NEEDS
5. MANAGEMENT SUCCESSION PLANNING
- POLICY FORMULATION
- IDENTIFYING KEY POSITIONS
- AVAILABILITY OF SUCCESSORS
- MATCHING FUTURE NEEDS
- RESPONSIBILITY FOR GROOMING
AND DEVELOPING
- HANDLING NON/POOR PERFORMERS
6. COMPENSATION
- APPROPRIATENESS OF POLICIES
- COMPANY PHILOSOPHY
- ADEQUACY OF REWARDS
- NATURE OF JOB DESCRIPTIONS
- FLEXIBILITY IN JOB EVALUATION SYSTEMS
- CONTROL OVER COSTS
- RATIONALE OF REWARD SYSTEM
- OPPORTUNITIES FOR IMPROVEMENT
7. AFFIRMATIVE ACTION
- EFFICIENCY OF ACTION PROGRAMMES
- LESSONS FOR FUTURE
8. SPECIAL ASSIGNMENT
(OTHER H. R. FUNCTIONS)
- CLARITY
- COMMENTS
- ACTIVITIES JURISDICTION
9. NEED INTER-RELATIONSHIPS
- UNIQUENESS
- DISTINCTIVENESS
- PRESENCE AND AWARENESS OF ABOUT COMPANY'S H. R. POLICY
- CLARITY ON OBJECTIVES OF
H.R. AUDIT
- FUTURE OUTLOOK ON PHILOSOPHY
* CAPABILITIES ON IMPLEMENTATION
10. THE STAFF FUNCTION
(THE H.R. STAFF)
- EXPECTATION FROM HUMAN RESOURCE STAFF
- DEGREE OF SATISFACTION
- ADEQUACY
- ATTITUDE AND APPROACH
- CAPABILITY AND POTENTIAL
- SUGGESTION FOR CHANGE
CHALLENGES FOR H.R. DEPARTMENT
EIGHT CHALLENGES IDENTIFIED
BY DAVE ULRICH (1997)
1. GLOBALIZATION INVOLVES
- NEW MARKETS
- NEW PRODUCTS
- NEW MINDSETS
- NEW COMPETENCIES
- NEW WAYS OF THINKING
H. R. DEPARTMENTS WILL NEED TO CREATE
MODELS AND PROCESSES FOR ACHIEVING:
- GLOBAL ACTIVENESS
- COMPETITIVENESS
- EFFECTIVENESS
2. VALUE CHAIN FOR GLOBAL
COMPETITIVENESS AND HR SERVICES
- BUILDING CUSTOMER-RESPONSIVENESS ORGANIZATION THROUGH:
a. Innovation
b. Faster Decision Making
c. Price or Value Advantage
d. Effective linking with Suppliers
3. GROWTH OF ORGANIZATION
- By INCREASING Customers
- BY MERGERS
- BY ACQUISITION
- BY JOINT VENTURES
HR ISSUES INVOLVED:
- Having EXECUTIVES with BUSINESS MINDSET.
- For CUTTING COST on hiring PEOPLE.
- For overcoming CHALLENGE in New Business.
4. BUILDING ORGANIZATIONAL CAPABILITIES
- Reviewing Existing Capabilities
- New Capabilities.
- Aligning Capabilities with Business Strategies.
5. MANAGING CHANGE
- Adopting some new H.R. Practices.
- Learning some New Skills and Attitudes.
- Unlearning some existing skills and Attitudes.
- Modifying Mindset of Executives and Employees.
6. MAKING TECHNOLOGY VIABLE
- Finding out ways and means to
make technology successful.
7. ATTRACTING AND RETAINING
COMPETENT PEOPLE
- Attracting Talented People.
- Retaining them.
- Utilizing them suitably.
8. TRANSFORMING ORGANIZATION
- Creating fundamental and lasting changes.
PRINCIPLES FOR HRM EFFECTIVENESS
SIX PRINCIPLES OF Dr. T. V. RAO ARE BASED ON HIS OBSERVATIONS AND PERSONAL KNOWLEDGE ABOUT THE 11 NATIONAL HRD AWARD WINNERS, DURING THE PERIOD FROM 1989 TO 1997.
DR. RAO OBSERVED, FOLLOWING COMMON TRAITS AND CHARACTERISTICS IN THE AWARDEES:
i. ROLE MAKERS NOT ROLE TAKERS.
II. INTEGRATION OF HR POLICIES AND PRACTICES
WITH COMPANY BUSINESS.
III. VERSATILITY FOR ONE ROLE TO OTHER.
IV. THRUST FOR LEARNING.
V. ALL ARE NOT HR MANAGERS.
VI. READY TO HANDLE LINE RESPONSIBILITIES.
VII. HAVING HIGH APPLIED BEHAVIORAL SCIENCE ORIENTATION.
SIX PRINCIPLES FOR BECOMING AN EFFECTIVE
HR MANAGER:
1. RESPECTING EACH OTHER'S TIME.
2. BECOMING TRUSTWORTHY AND PROMOTING TRUSTWORTHINESS.
3. CONTINUOUS INTROSPECTION OF ROLES AND RESPONSIBILITY OF SELF AND THE GROUP.
4. LEARNING FROM NEIGHBORS FOR CHANGE AND REFLECTION.
5. PAYING ADEQUATE ATTENTION TO THE CULTURE AND VALUES IN THE COMPANY AND THE COUNTRY.
6. USING PERSONNEL POLICIES FOR EMPOWERING EMPLOYEES AND PROMOTING MANAGERIAL EFFECTIVENESS AND NOT FOR BLOCKING CREATIVITY AND INNOVATION.
H. R. COMPETENCIES
1. Knowledge of H.R. practices:
- Staffing.
- Development.
- Appraisal.
- Rewards.
- Organizational Planning.
- Communication, Etc...
2. Mastery of Human Resource:
- Every thing about H.R.
3. Knowledge of Business:
It means knowing about:
- Financial.
- Strategic.
- Technological variables and their influence on business.
4. Mastery over Change process and Change Management:
- Creating Meaning.
- Problem Solving.
- Innovation.
- Transformation.
- Relationship Influence.
- Role Influence.
5. Mastery of Business:
It means knowing about following capabilities of the
organization:
- Business,
- Financial.
-
From India, Hyderabad
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