{"id":116,"date":"2018-10-11T07:59:49","date_gmt":"2018-10-11T07:59:49","guid":{"rendered":"http:\/\/mgmtp01.epgpbooks.inflibnet.ac.in\/?post_type=chapter&p=116"},"modified":"2019-01-03T09:17:52","modified_gmt":"2019-01-03T09:17:52","slug":"hr-audit-nature-benefits-scope-and-approachesto-hr-audit","status":"publish","type":"chapter","link":"https:\/\/ebooks.inflibnet.ac.in\/mgmtp01\/chapter\/hr-audit-nature-benefits-scope-and-approachesto-hr-audit\/","title":{"rendered":"HR Audit: Nature, benefits, scope and approachesto HR Audit"},"content":{"raw":"
\"epgp<\/a>\r\n<\/span><\/div>\r\n
\r\n\r\n \r\n\r\n \r\n\r\n \r\n\r\nLearning Outcome:\u00a0 The Main purposes of human resource audit is :\r\n\r\n \r\n

(i)\u00a0\u00a0\u00a0 To review the system of acquiring, developing, allocating & utilizing human resource in the organisation.<\/p>\r\n \r\n

(ii)\u00a0\u00a0\u00a0 To evaluate the extent to which line managers have implemented the policies & programmes initiated by top management\/ human resource departments.<\/p>\r\n \r\n

(iii)\u00a0 To identity shortcomings in the management of human resources.<\/p>\r\n \r\n

(iv)\u00a0 To evaluate the human resource staff.<\/p>\r\n \r\n

\u201cAn Human Resource Audit is like an annual health check-up, it plays a vital role in instilling sense of confidence in the management & the Human Resource function of an organisation\u201d .<\/em><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n\r\n36.1.\u00a0 Introduction: -<\/strong>\r\n\r\n \r\n

The word \u2018audit\u2019 comes from the Latin verb \u2018audire \u2019 , which means to listen. Listening implies an attempt to know the state of the affairs as they exist and as they are expected \/ promised to exist. Auditing as a format process is rooted in this feature of listening. Consequently, it is a diagnostic tool to gauge not only the current status of things but also the gaps between the current status and the desired status in the area that is being audited.<\/p>\r\n\"\"\r\n\r\n \r\n

http:\/\/www.morismu.com\/audit-and-assurance.html<\/a><\/p>\r\n \r\n

Auditing has been a routine exercise in the area of finance, especially because it is a statutory obligation. However, in case of Human Resource there is no legal binding to adopt auditing. Some of the companies nevertheless prefer to have Human Resources Audits.<\/p>\r\n \r\n

The human resource audits is based on the premise that human resource are dynamic & must continually be redirected & revitalized to remain responsive to the ever changing needs. Human Resources Audits are not routine practices aimed at problem solving. Instead of directly solving problems, Human Resource audits like financial audits, help in providing insights into possible causes for current & future problems.<\/p>\r\n \r\n

A well run and managed Human Resource department can increase morale, reduce employee turnover and help a business run smoothly and is many cases remain competitive. Employees should be seen as the most valued asset of a company & treated accordingly. Because of this, to make sure a Human Resource department is operating to its best capacity, it is important to run a periodic Human Resource Audit.<\/p>\r\n \r\n\r\n36.2. Meaning & Definition:<\/strong>\r\n\r\n \r\n

Human Resources are the people in an organisation, so a human resources audit is a look at those people and the processes that put them in place to make sure the system is working efficiently. An HR audit also goes beyond looking at the hiring process into areas like employee retention, budgeting, training, employee compensation, management \/ employee relation & virtually any process or practice, within the company that affects its people.<\/p>\r\n \r\n

A periodic Human Resources audit can qualify its effectiveness within an organisation. Human Resources audits may accomplish a variety of objectives , such as ensuring legal compliance ; helping maintain or improve a competitive advantage ; establishing efficient documentation & technology practices & identifying strengths & weaknesses in training, communication & other employment practices.<\/p>\r\n \r\n\r\n \r\n\r\n36.2.1. Definition:<\/em><\/strong>\r\n\r\n \r\n

\u201cHuman Resources Audit is a comprehensive method of objective & systematic verification of current practices, documentation, policies & procedures prevalent in the HR system of the organisation\u201c. An effective Human Resource Audit helps in identifying the need for improvement & enhancement of the\u00a0HR function. It also guides the organization in maintaining compliance with <\/span>ever \u2013 changing rules & regulations. Human Resource Audit, thus helps in analyzing the gap between \u2018what is the current HR function \u2018 and \u2018 what should be \/ could be the best possible HR function \u2018 in the <\/span>organisation.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n

\u201cHuman Resources Audit means the systematic verification of job analysis & design, recruitment and selection orientation & placement, training & development, performance appraisal & job evaluation, employee & executive remuneration, motivation &\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 morale,\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 participative\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 management, communication, welfare & social security, safety & health, industrial relations, trade\u00a0unionism & disputes & their resolution\u201d. HR audit is very useful to achieve the organisational goal & also is a vital tool which helps to assess the effectiveness of HR functions of an organisation.<\/p>\r\n\r\n<\/div>\r\n\"\"\r\n

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www.slideshare.net\/wicaksana\/hr-audit-30973881<\/a><\/p>\r\n \r\n\r\n \r\n

\u201cHuman Resources audit implies critical examination & evaluation of policies, programmes & procedures in the area of human resources management. It is a periodic review to measure the effectiveness of human resource management and to determine the steps required for more effective use of human resources\u201d. Human resource audit involves a formal, systematic & indepth analysis , investigation & comparision.<\/p>\r\n \r\n\r\n36.3. Need for Human Resource Audit:<\/strong>\r\n\r\n<\/div>\r\n

To make the show successful and increase the effectiveness of the <\/span>organisation, management found the solution <\/span>in competent man\u00a0<\/span>power. Human resource development functions should <\/span>be performs as per the planning & expected results. To ensure & not to take <\/span>chance the <\/span>organisation undertake HR audit due to <\/span>following reasons:<\/span><\/p>\r\n \r\n

\"\"<\/div>\r\n
<\/div>\r\n
36.3.1. <\/em><\/strong>A change has taken place\u00a0<\/span>in managerial philosophy management now feel that\u00a0<\/span>employees participation in the activities of the <\/span>organisation & their identification with its essential for <\/span>successful making of the <\/span>organisation.<\/span><\/div>\r\n
\r\n\r\n \r\n

36.3.2. <\/em><\/strong>As an organisation grows, continuous feedback is required to improve the performance of its personnel. Human resources audit provides the required feedback; it is all the more necessary in a diversified & decentralized organisation.<\/p>\r\n\r\n<\/div>\r\n

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36.3.3. <\/em><\/strong>Trade unions have become more powerful & are playing more active role in human resource management. They often question management\u2019s competence in industrial relations. Management can meet this challenge through human resource audit.<\/p>\r\n \r\n

36.3.4. <\/em><\/strong>Human Resource audit is becoming necessary due to rising labour costs & increasing opportunities for competitive advantage in human resource management.<\/p>\r\n \r\n

36.3.5. <\/em><\/strong>In order to protect employee interest, central & state governments intervene more often & more extensively. Human resource audits can be helpful in avoiding such intervention.<\/p>\r\n \r\n

36.3.6. <\/em><\/strong>Growing proportion of technical, professional & women employees creates more difficult problems in human resource management. Human resource audit is required to tackle problems.<\/p>\r\n \r\n\r\n36.4. Benefits of Human Resource Audit:<\/strong>\r\n\r\n \r\n

The Human Resource Audit can be carried out by a suitably qualified person of the organisation. The Human Resource Audit is a tool for evaluating the personnel activities of an organisation. It gives feedback about how well the Human Resource specialist and the line managers who practice Human Resource applications are doing. It acts an overall quality control check on Human Resource function & the evaluation reveals how these activities support the overall strategy of the organisation. The benefits that results from such an audit are:<\/p>\r\n \r\n

36.4.1. <\/em><\/strong>To identity the contribution of Human Resource dependent on the organisation.<\/p>\r\n \r\n

36.4.2. <\/em><\/strong>To identity & take corrective actions on the shortcomings \/ and or weaknesses that were noticed as a result of the audit.<\/p>\r\n \r\n

36.4.3. <\/em><\/strong>To improve the performance of personnel department & the performance of line managers who practice Human Resource management in day to day discharge of their duties.<\/p>\r\n \r\n

36.4.4. <\/em><\/strong>It clarifies Human Resource department\u2019s duties & responsibilities.<\/p>\r\n \r\n\r\n36.4.5. <\/em><\/strong>To locate critical personnel problems & take necessary action to resolve them.\r\n\r\n \r\n\r\n36.4.6. <\/em><\/strong>To find out how Human Resource department can become more effective.\r\n\r\n<\/div>\r\n\"\"\r\n

\r\n\r\n \r\n\r\n36.5. Limitations of Human Resource Audit:<\/strong>\r\n\r\n \r\n

Human Resource audit is the examination & verification of Human Resource aspects. It is a very useful process. There are many advantages of Human Resource Audit but its limitations are following:<\/p>\r\n \r\n

36.5.1.<\/em><\/strong>\u00a0<\/span>Lack<\/em><\/strong>\u00a0<\/span>of<\/em><\/strong>\u00a0<\/span>Proper Response<\/em><\/strong>\u00a0<\/span>from\u00a0<\/em><\/strong>Employees:<\/em><\/strong><\/p>\r\n \r\n

During audit process, the employee thinks that this is unnecessary activity & it may go against them so they hesitate to share information with auditors. Some give <\/span>half response or sometimes avoid giving information. As a <\/span>result there is no output from the audit.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n\r\n36.5.2. Special care is needed to conduct Human Resource Audit:<\/em><\/strong>\r\n\r\n \r\n

When conducting Human Resource Audit, Special care should be taken regarding selection of\u00a0auditors, activities for audit selection & timing for audit. The trained auditor should be selected on the basis of their experience & proven past records. The activities & timing for audits are to be decided so that it should not affect the audit as well as routine work of the <\/span>organisation.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n\"\"\r\n\r\n \r\n\r\n36.5.3.<\/em><\/strong>\u00a0\u00a0 Shortage of Time:<\/em><\/strong>\r\n\r\n \r\n

When audit is conducted, the auditors are given very less time to audit a lot of human resource related activities. The auditors do not find sufficient time to study all activities & collect data. They carry out the work hurriedly & they are likely to given half or wrong report sometime.<\/p>\r\n \r\n\r\n36.5.4. High Cost of Conducting Audit:<\/em><\/strong>\r\n\r\n \r\n

During audit process a lot of arrangements are to be made for the auditors. For them lodging, boarding, transportation, entertainment & fee arrangement are to be made. The total cost for conduct audit for a fortnight period, a large amount is involved. It adds to the costs of the organization & profitability goes down.<\/p>\r\n \r\n\r\n36.5.5. Evaluation of Units & Systems not for Individuals:<\/em><\/strong>\r\n\r\n \r\n

In Human Resource Audit the activities or subsystem involved are evaluated. The efforts are put to find out the gap between planning & actual work carried. The comparison of these two finds the deviation in activities. But efforts are not put to evaluate the caliber required & possessed by the individual employee.<\/p>\r\n \r\n

Despite its limitations, Human Resource Audit is very useful. It provides information to assess all aspects of Human Resource and helps to improve the overall effectiveness of the organisation.<\/p>\r\n \r\n\r\n36.6. Scope of Human Resource Audit:<\/strong>\r\n\r\n \r\n

The scope of human resource audit is very wide. It covers the management of people at all levels. It is not limited to a review of the performance of human resource department. Human Resource audit can be conducted to evaluate the policies, procedures and programmes of human resource management. It can also be directed at the results (both achievements and failures) in the area of human resources.<\/p>\r\n \r\n

36.6.1. Auditing Human Resource Policies:<\/em><\/strong><\/p>\r\n \r\n

Human resource policies are broad statements of what should be done in the area of human resource management. The policy audit attempts to judge the coverage of human resource policies. It analyses the policy formulation, policy communication <\/span>and policy change.<\/span><\/p>\r\n\r\n<\/div>\r\n

\r\n\r\n \r\n\r\n36.6.1.1. Policy Formulation:<\/em>\r\n\r\n \r\n\r\nThe auditor should seek answers to these questions i.e.<\/span>\r\n\r\n<\/div>\r\n
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