Human Resource Audits

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 Human Resource Audit?
A human resource audit evaluates the personnel
activities used in an organization. The audit may
include one division or entire company. It gives
feedback about :
1. The function of operating managers.
2. The human resource specialists.
3. How well managers are meeting their human
resource duties.
In short, the audit is an overall quality control check
on human resource activities in a division or
company and how those activities support the
organization’s strategy
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 Benefits of A Human Resource
Audit
 Identifies the contribution of the personnel
departments to the organization
 Improves professional image of the personnel
department
 Encourages greater responsibility and
professionalism among members of the personnel
department
 Clarifies the personnel department’s duties and
responsibilities
 Finds critical personnel problems

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 The Scope of Human Resource
Audits
 Audit of Corporate Strategy
Corporate Strategy concerns how the organization is going to gain competitive
advantage.

 Audit of the Human Resource Function

Audit touches on Human Resource Information System, Staffing and Develop-
ment, and Organization Control and Evaluation.

 Audit of Managerial Compliance

Reviews how well managers comply with human resource policies and
procedures.

 Audit of Employee Satisfaction

To learn how well employee needs are met.

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 Audit of Corporate Strategy
 Human resource professionals do not set corporate
strategy, but they strongly determine its success.
 By assessing the firm’s internal strengths and
weaknesses and its external opportunities and
threats, senior management devises ways of
gaining an advantage, such as :
 stresses superior marketing channels,
 low-cost production, etc.
 Understanding the strategy has strong implications
for human resource planning, staffing,
compensation, employee relations, and other
human resource activities
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Audit of the Human Resource
Function
1. Human Resource Information System
- Human Resource Plans : Supply and demand
estimates; skill inventories; replacement charts
and summaries
- Job Analysis Information : Job standards, Job
descriptions, Job specifications
- Compensation Management : Wage, salary, and
incentive levels; Fringe benefit package;
Employer-provided services

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 2. Staffing and Development

 Recruiting : sources of recruits, availability of

recruits, employment applications
 Selection : selection ratios, selection procedures,
equal opportunity.
 Training and development : orientation program,
training objectives and procedures, learning rates
 Career development : internal placement, career
planning program, human resource development
efforts

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3. Organization Control and Evaluation
 Performance appraisals : standards and measures
of performance, performance appraisal techniques,
evaluation interview.

 Labor-Management Relations : Legal compliance,

management rights, dispute resolution problems.

Human Resource Controls : employee

communications, discipline procedures, change
and development procedures,

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 Tasks of Auditors
 Identify who is responsible for each activity.
 Determine the objectives sought by each activity.
 Review the policies and procedures used to
achieve these activities.
 Prepare a report commending proper objectives,
policies, and procedures.
 Develop an action plan to correct errors in each
activity.
 Follow up the action plan to see if it solved the
problems found through the audit.

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 Audit of Managerial
Compliance
 Compliance with laws is especially
important. When safety, compensation, or
labor laws are violated, the government
holds the company responsible.
 If managers ignore policies or violate
employee relations laws, the audit should
uncover these errors so that corrective
action can be started.

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 Report for the HR Specialist
 The specialists who handle employment
training, compensation, and other activities also
need feedback. Such feedbacks are :
1. Unqualified workers that need for training
2. Qualified workers that need for development
3. What others company are doing
4. Attitude operating managers toward personnel
policies
5. Workers pay dissatisfaction

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 Report for HR Manager
 It is contains all the information given to both
operating managers and staff specialists. In
addition, HR Mangers gets feedback about :
 Attitude operating managers and employees about
services given by HRD
 A review of HRD plans
 Human resource problems and their implication
 Recommendations for needed changes and
priorities for their implementation

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