DIKSHA GUPTA

(170604070)
HR Audit
Assignment

Ques 1) Explain the concept of Balanced Scorecard.

A balanced scorecard is a strategic management performance metric used to identify
and improve various internal business functions and their resulting external
outcomes. Balanced scorecards are used to measure and provide feedback to
organizations. Data collection is crucial to providing quantitative results as managers
and executives gather and interpret the information and use it to make better
decisions for the organization.
The balanced scorecard model reinforces good behaviour in an organization by
isolating four separate areas that need to be analysed. These four areas, also called
legs, involve learning and growth, business processes, customers, and finance.
The balanced scorecard is used to attain objectives, measurements, initiatives, and
goals that result from these four primary functions of a business. Companies can
easily identify factors hindering business performance and outline strategic changes
tracked by future scorecards.
The balanced scorecard can provide information about the company as a whole
when viewing company objectives. An organization may use the balanced scorecard
model to implement strategy mapping to see where value is added within an
organization. A company also uses a balanced scorecard to develop strategic
initiatives and strategic objectives.
Characteristics of the Balanced Scorecard Model:
Information is collected and analysed from four aspects of a business:
 Learning and growth are analysed through the investigation of training and
knowledge resources. This first leg handles how well information is captured
and how effectively employees use the information to convert it to
a competitive advantage over the industry.

 Business processes are evaluated by investigating how well products are

manufactured. Operational management is analysed to track any gaps,
delays, bottlenecks, shortages, or waste.

 Customer perspectives are collected to gauge customer satisfaction with

quality, price, and availability of products or services. Customers provide
feedback about their satisfaction with current products.
  Financial data, such as sales, expenditures, and income are used to
understand financial performance. These financial metrics may include dollar
amounts, financial ratios, budget variances, or income targets.
Ques 2) Write short note on comparative approach, outside authority approach and
compliance approach of HR Audit.
1. Comparative approach:
In this approach, a benchmarking strategy is used. Auditors identify a competitor
organization which is used as a model in comparison. The audit reports are
compared analytically to find areas to make corrections.
The benchmarking process is quite tedious as it involves:
 Forming a team to take care of the process.
 Identifying the most suitable organization to partner for the benchmarking.
 Collection of data from both organization/companies.
 Proper analysing and interpretation of the data.
 Creating an action plan and working on loopholes identified.

2. Outside authority approach:

Standards set by outside consultants are used by the audit team to benchmark for
comparison with their own results. Data from published research finding and
research films/ documentaries are also a source for benchmarking, to explore for
causes of the problem.
3. Compliance approach:
It is an approach based on legal and organization’s policies. Auditors take a
thorough look at past actions to examine whether the organization’s activities are in
line with legal requirements together with the set standards, policies and procedures.
Although many don’t view it as an efficient approach because it uses past
information which may be biased due to various reasons.

Ques 3) What do you understand by Audit for employee turnover and discuss its
importance.
Employee turnover refers to the number or percentage of workers who leave an
organization and are replaced by new employees.
Measuring employee turnover can be helpful to employers that want to examine the
reasons for turnover or estimate the cost- to-hire for budget purposes.
Many organizations have put forth much effort and expense to develop human
resources policies, practices, and procedures that are both aligned with the
organization’s corporate culture and compliant with the law. Still, with organizations
and the legal landscape constantly changing, it is important to perform frequent
reviews to ensure that everything is up-to-date. Performing regular human resources
audits is a proactive way of ensuring that an organization stays up-to-date and out of
hot water when it comes to legal issues.
The purpose for conducting HR audits goes beyond ensuring legal compliance,
however. While these audits are key for recognizing HR deficiencies, they also aid in
recognizing HR successes. Furthermore, they help HR professionals standardize
processes, identify risk areas, and align HR practices with the overarching strategy
and goals of the organization. An HR audit assesses the current activities and inputs
available, and then determines the future HR needs of the organization. When done
properly, the audit will ultimately result in meaningful action items, including a
suggested timeline and allocation of resources that will improve the effectiveness
and efficiency of the HR function. Beyond these reasons, the HR audits help to instil
confidence in management and the HR function.
Importance of Audit for employee turnover are as follows:
1. Internal Services: Employers should regularly audit the services that are
provided to their employees, including payroll, benefits administration, and
conflict resolution. The quality of these services directly affect employee
satisfaction, which is key in employee retention. Employee satisfaction with
these services typically leads to increased company morale and engagement.
An audit of these services should seek to ensure that they are meeting the
needs of employees.

2. Legal Compliance: Employers must adhere to employment and labour laws,

which are constantly changing and evolving. Performing an HR audit is
especially important because it mitigates the risk of being liable for what are
deemed “unfair employment practices”. Legal issues and conflicts can be
extremely costly, and HR audits are a proactive way to minimize the costs
associated with such compliance issues. The audit should assess the
recruitment and selection process for employees to ensure fairness. It should
also assess the procedures for layoffs and terminations, and the effectiveness
of measures taken to maintain workplace safety.

3. Performance Management: HR audits usually involve reviewing employee

files to ensure that supervisors and managers are continuously providing
feedback and properly documenting it. An audit can help to pinpoint lapses in
leadership and management and identify opportunities for training or
performance management improvement.