Unit 4 Session 5.pptx

Online MBA Semester I Organizational Behaviour and Human Resource Management Course code - (OMBA-103) Unit 4 : Lesson 5 : HR Audit Part - I Human Resource Human Resource Audit Management Human Resource Human Resource Audit Management Learning objectives: • Introduction • Need and Purpose of HR A...

Online MBA Semester I Organizational Behaviour and Human Resource Management Course code - (OMBA-103) Unit 4 : Lesson 5 : HR Audit Part - I Human Resource Human Resource Audit Management Human Resource Human Resource Audit Management Learning objectives: • Introduction • Need and Purpose of HR Audit • Aspects of HR audit • Audit Relationships • Designing Information Systems for HR Audit Human Resource Human Resource Audit Management Human Resource Audit 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 organization. Human Resource Human Resource Audit Management Human Resource Audit HR Audit is a systematic formal process, which is designed to examine the strategies, policies, procedures, documentation, structure, systems and practices with respect to the organization’s human resource management. It systematically and scientifically assesses the strengths, limitations, and developmental needs of the existing human resources from the larger point of view of enhancing organizational performance. Human Resource Human Resource Audit Management NeedTheand Purpose of HR commonly understood audits are the established Audit and regular accounting Concern by top audits carried out in accordance with specific statutory regulations. Compulsions of the external forces necessitating a situational audit, management, Business changing significantly influenced by international business decisions affecting human resource management, and An urge on the part of human resource management professionals towards advancement of the practices and systems. Human Resource Human Resource Audit Management Need for HR Audit 1.Does the organisation regularly forecast the supply of and demand for employees in various categories? 2.Do job analyses exist for all positions in the organisation? 3.Are all potential sources of recruitment identified and evaluated? 4.Are measurable selection criteria developed and used while filling up jobs? 5.Do effective training and development programmes exist? 6.Is there a performance evaluation system that helps assess past and potential performance? 7.Is the remuneration programme designed to motivate employees? 8.Is the plant unionised? 9.Does a grievance procedure exist? 10.Does the organisation have high quality of work life? 11.Does the HRM practice contribute to organisational Human Resource Human Resource Audit Management The field of human resource audit includes : (a)Recruitment and selection, (b) Training and development, (c) Promotion, transfer, and career development, (d)Performance appraisal and job evaluation, (e) Morale and discipline, (f) Salary, rewards and benefits, (g) Personnel policies, procedures and programmes, (h) Employer – employee relations, and (i) Research Human Resource Human Resource Audit Management Figure: Sample HR Audit Checklist Instructions: For each of the items listed below, an organisation can be rated using the following scale: VERY GOOD (complete, current, and done well) 3 points ADEQUATE (needs only some updating) 2 points WEAK (needs major improvements/changes) 1 point BASICALLY NONEXISTENT 0 points Human Resource Human Resource Audit Management Chart for HR Audit I. Legal Compliance Maintaining Human Resources 1. Equal employment opportunity requirements 2. Immigration reform 3. Health and safety 4. Wage and hour laws 5. Employment-at-will statements 6. Privacy protection 7. ERISA reporting/compliance 8. Family/medical leave Human Resource Human Resource Audit Management II. Obtaining Human Resources 9. Current job descriptions and specifications 10. HR supply-and-demand estimates (for 3 years) 11. Recruiting process and procedures 12. Job-related selection interviews 13. Physical exam procedures Human Resource Human Resource Audit Management III. Maintaining Human Resources 14 Formal wage/salary system 15 Current benefits programs/options 16 Employee recognition programs 17 Employee handbook/personnel Policy manual 18 Absenteeism and turnover control 19 Grievance resolution process 20 HR record-keeping/information system Human Resource Human Resource Audit Management IV. Developing Human Resources 21. New employee orientation program 22. Job skills training programs 23. Employee development programs 24. Job related performance appraisal 25. Appraisal feedback training of managers Human Resource Human Resource Audit Management Evaluate the score on the HR audit as follows: 60-70 HR activities are complete, effective, and probably meeting most legal compliance requirements. 45-59 HR activities are being performed adequately, but they are not as complete or effective as they should be. Also, it is likely that some potential legal risks exist. 30-44 Major HR problems exist, and significant attention needs to be devoted to adding and changing the HR activities in the organisation. Below 30 Serious potential legal liabilities exist, and it is likely that significant HR problems are not being addressed. Human Resource Human Resource Audit Management AREAS OF HR AUDIT Auditing Organisation al Health Standards of Accountabilit y Policy Implementati on Audit Cost Benefit Comparison s Absenteeism Record Turnover Rate Attitude Surveys Company Records Measures Human Resource Human Resource Audit Management AUDIT RELATIONSHIPS In many organisations often, staff managers are also placed in the position of appraising the work of line managers and reporting their findings to the upper management. Personnel may audit how well line managers keep payroll costs in line or how well they utilising training resources. Personnel auditing thus discloses excessive and costly turnover that may be afflicting organisational practice. Human Resource Human Resource Audit Management There are four more elements that could be considered prerequisites in HR auditing: 1.Performance Improvements 2.Associating Line Managers in data collection 3.Acceptance of Reports 4.Unbiased resolution of the conflicts Human Resource Human Resource Audit Management DESIGNING INFORMATION SYSTEM FOR HR AUDIT Collecting data Asking questions of the data Interpretin g the data Stimulatin g remedial action Human Resource Human Resource Audit Management It is critical for the HR department to develop a working relationship with the line particularly the top management that balances any constraining forces with timely participation and sharing. As auditors, personnel managers should consider difficulties each manager faces in meeting the standards set for his unit by the line management.