OMBC201_HRM, ASSIGNMENT 2, QUESTION NO.

Personnel auditing means an examination and evaluation of policies, procedure and practice to analyze
the effectiveness of personnel management. In other words, personnel audit or periodical reviews of the
effectiveness of a management are related with:

 The measurement of the effectiveness of personnel programs and activities

 The determination of what should or what should not be done in the future because of such
measurement.

Objectives of Personnel Audit

The objectives of a personnel audit are:

 To review the total system of management programs in which a management develops, allocates,
and supervises human resources in an organization with a view to analyze the effectiveness of these
programs
 To get explanations and information, that is, to get answer to questions like:. “Why did it happen?”
and “What happened?”
 To evaluate the extent to which line managers have established the policies which have already
been in process
 To evaluate the personnel staff and employees.

Importance of Personnel Audit

The importance of a personnel audit has increased in recent years due to the following reasons:

 The rising role played by trade unions and their strength, because of which they often question
managerial capability in industrial relations.
 The growing wages, changes in skills of technical and professional workers, and the increasing
expenditure incurred on the industrial relations department – these are the factors which have
influenced and encouraged the trends in favor of a personnel audit.
 A swap in managerial philosophy and theory, as a result of which a management now feels that the
employees' participation in the activities of an organization, and their identification with it, has a
tremendous influence on the working of that organization.
 The switching role of government, which involves itself more often and more considerably now, to
control manpower management by an organization with a view to protecting the interests of the
employees, providing them with better working environments and ensuring their economic security.
 OMBC201_HRM, ASSIGNMENT 2, QUESTION NO. 2

The sector of personnel audit includes:

1. Labor relations
2. Morale development
3. Employee benefits and services
4. Employee communication
5. Promotions and transfers
6. Rating
7. Wage and salary administration
8. Collective bargaining and
9. Personnel management, industrial relation and research.
10. Employee counseling
11. Selection
12. Training
13. Management development
14. Job analysis
15. Recruitment
16. Testing

Scope of Personnel Audit

The scope of a personnel audit is very wide. It represents a “whole man” approach, which is, it presumes
that the management of human resources involves much more than the practice of recruiting, hiring,
retaining and firing employees. It analyzes the concept of “People management” by supervisors at all
levels. In the words of the National Industrial Conference Board of the United States, “the top
management is interested in auditing all the programs relating to employees, regardless of where they
originate, or the channels through which they are administered”.

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