MU0013- HR AUDIT Question 1- Q1. Define Human Resource (HR) Audit. What is the need for HR Audit?

What are the various approaches to HR Audit? Answer : A Human Resources Audit is a comprehensive method (or means) to review current human resources policies, procedures, documentation and systems to identify needs for improvement and enhancement of the HR function as well as to ensure compliance with ever-changing rules and regulations. Need for HR audit- 1. Behavioral Indicators: Behavioral indicators describe the behaviors, thought patterns, abilities and traits that contribute to superior performance.2. Evaluative Competency Levels: Exceptional competencies of high performers are set as standards for evaluating competency levels of employee. Explanation of HR audit approach by Walker Walker [1998] differentiates between two approaches relative to HR auditing i.e. those centered in the functions internal aspect, and those centered on the external aspect. Internal perspective: From an internal perspective, as in any staff function, there is a trend of valuing its actions as a result of the activities undertaken and its costs. External perspective: From an external perspective, if it is understood that the ultimate appraisal of the effectiveness of HR is based on their impact on the companys results, then the measurements. There are five common approaches for the purpose of evaluation of HR in any organization: Comparative approach: In this approach, another division or company that has better practices or results is chosen as the model. The audit team audits and compares the audited firms results with the best practices of the model organization. It helps detect areas where improvement is needed. It also makes sense to compare where a procedure is being used for the first time. Outside authority: In this approach, standards set by a consultant or taken from published research findings serve as the benchmark for the audit team. This approach reviews past practices, to determine if actions taken followed legal requirements and company policies and procedures. Management by Objectives (MBO): In this management by objectives approach, managers and specialists set objectives in their area of responsibility. Then they create specific goals against which this performance can be measured. The audit team researches actual performance and compares it with the previously set objectives. Common approach to HR audit- Common approaches to HR Audit include comparative approach, outside authority, compliance approach and statistical approach.HR Audit measures the extent to which values and cultures of the organization are practiced and followed. HR audit can measure competencies in terms of business knowledge, strategic thinking, functional excellence, leadership and change management, execution skills and personal credibility.There is a management competency framework and a generic competency framework. HR Audit vastly improves competency.

Question 2 - Write a brief note on staffing. How does employee orientation programs help employees? What are the characteristics of good employee orientation programs? Answer : Staffing can be described as the process of acquiring, deploying, and retaining a workforce of sufficient quantity and quality to create positive impacts on the organisation's effectiveness. Staffing includes various aspects to ensure the best practices in an organisation. Workforce planning: Workforce planning starts with analysis of the strategic position of the business. The results of this analysis are then feed into a forecast of the required demand for labour by the business and how this is likely to be supplied. Specifying jobs and roles: Clearly defining employee roles in the company is vital to work efficiency. When employees understand what their roles include or comprises of, they will be more productive. Recruiting: It involves the process of identifying and hiring the best-qualified candidate (from within or outside an organisation) for a job vacancy, in a most timely and costeffective manner. Outsourcing: Employee outsourcing can be a cost-effective alternative to the monetary and administrative burden of a traditional employer-employee relationship. Employee orientation programmes are given to new employees at a place of business or work. It helps employees to speed up and learn the ground rules of the company. This often reduces start-up time, training, and other indirect costs associated with having new employees who are unfamiliar with the company culture. The employee orientation programme offers the business its best chance in shaping an employee's skills / work practices and imbibing its corporate philosophy onto the mind of the new employee. The process of new employee orientation strengthens the new employees relationship with the organisation. It fuels their enthusiasm and guides their steps into a long term positive relationship with the organisation. Effective orientation programmes are the key to sparking early productivity and improving employee retention. Good employee orientation programmes: Make a good first impression. Make new employees feel welcome and valued as key players on the team. Explain the mission/ purpose of the company and the job so that employees can see the big picture. Assure them they will be carefully and patiently trained not thrown in to "sink or swim. Familiarise employees with rules, policies and procedures. Help employees adapt to their new surroundings, as well as learn who all the players are and how they work together. Establish friendly relationships among co-workers and managers. Ensure new employees have all the information and tools they need to do their jobs.

Question 3 What is HR Scorecard? Explain the reason for implementing HR Scorecard. Answer: HR scorecard which is an important tool for conducting a successful HR audit. It is used for measuring the contribution of human resource management practices for achieving organisational objectives. It helps to verify the level to which the HR policies of the company are aligned with the strategic goals of the company. The HR scorecard framework was specifically designed for the following reasons: It reinforces the distinction between HR do-ables and deliverables: Policy implementation is not a deliverable until it has a positive effect on the HR architecture and creates the right employee behaviours that drive strategy implementation. An appropriate HR measurement system will encourage HR professionals to think both strategically as well as operationally. It helps in controlling cost control and value creation: It is the responsibility of HR to minimise the cost of the firm but at the same time, HR has to fulfill its strategic goal, which is to create value. The HR scorecard helps HR professionals balance the two and find the optimal solution. It allows HR professionals to drive out costs where appropriate, but at the same time it helps to create value for the firm by retaining good human resources. It measures leading indicators: There are drivers and outcomes in the HR value chain along with leading and lagging indicators in the overall balanced performance measurement system. It assesses HRs contribution to strategy implementation: The cumulative effect of the HR scorecards deliverable measures provides the answe r to the question regarding HRs contribution to a firms performance. All measures have a credible and strategic rationale. Managers can use these measures as solutions to business problems. It lets HR managers to manage their strategic responsibilities: The scorecard motivates the HR managers to focus on exactly how their decisions shape the successful implementation of the firms strategy. This is due to the systemic nature of the scorecard that covers all the aspects. Therefore it provides a clear framework. It encourages flexibility and change: The basic nature of the scorecard with its causal emphasis and feedback loops helps fight against measurement systems getting too standardised. Every decision needs to be taken based on past and future scenarios. The HR scorecard provides the flexibility and change because it focuses on the firms strategy implementation, which constantly demands change.

Q 4: Define competency management. Explain the two frameworks of competency management. Answer: Competency management can be understood as a strategy and approach to work structurally on the development of employee competencies in order to improve the performance of an organisation. Competency management can help you direct the changes in line with t he organisations vision, mission as well as strategic objectives - whether the organisation wants to exclusively enhance its performance or completely transform its way of doing business. It works as a framework to provide unbiased, fair, honest and reliable feedback to the employee on both his/her performance and the way in which he/ she is demonstrating the required competencies. Competency management may also contribute to the improvement of the organisations overall performance, and can build an environment where employees are motivated. It assists in providing management with impartial information on which human resources decisions can be taken. There are two general frameworks that an organisation can use and the auditor can check: Management Competency Framework Generic Competency Framework Management competency framework is generally applied if your job involves supervising or managing other people, or you are in a technical or professional role in which you regularly operate at this level. This framework splits into three levels. The particular level that applies to you depends on the level of your management responsibilities. Generic Competency Framework applies if your job does not include supervisory or management responsibilities. There are a number of competencies in each framework. Under each is a general description of the competency, followed by a list of attitudes/ behaviours that would indicate competence in the relevant area. There is also a negative statement at the end of each competency to indicate the sort of behaviour that is actively discouraged, as it works against the principle of continual improvement that an organisation may be striving for. The competency framework serves several purposes that enable an organisation to improve and develop its staff and services. The framework: 1. Informs prospective employees about what is expected of them 2. Informs staff of the attitudes and behaviours sought and rewarded by the organisation 3. Informs staff of what they can expect from their managers 4. Shapes and defines a culture based on strong principles such as partnership, continuous improvement, constructive challenge and being employee centred 5. Supports staff at all levels in their development in order to maximise their potential.

Q 5: Write a brief note on workplace policies and practices. Answer: Workplace communication is one of the important aspects of organisational development. When communication flows through a company, knowledge is shared, achievements are celebrated and issues are addressed. When a company does not communicate well, information silos develop, with individual departments unaware of the happenings in the rest of the organisation. The result is often poor customer service, low morale and reduced productivity. Safeguarding employee information Separate files should be maintained for personal information as contrasted with employment related information to safeguard employees personal information. The employment decision needs to be made on work/performance-related information, not the personalinformation. Relevant materials in the work file include information on the employe es education,related work experience, and performance evaluations in other positions within the company. An audit can clarify what information must be segregated and the laws that govern employees access to and copying of their files. Employee performance management An audit can review companys job descriptions for compliance (i.e., to determine whethe r thedescriptions list the essential functions of the job). Various legal issues can arise due to performance related problems of employees. Safe work environment Audit practices may also help the companies to know about factors that contribute to a safe work environment. A company may choose to develop an audit sheet tailored to a particular issue, such as the companys zero-tolerance policy for harassment. Auditing workplace behaviors that support legal compliance A safe, dignified, and respectful work environment is not only mandated by the law, but also increases motivation and productivity of the employees. An example of review of business practices used to deal with allegations of harassment safe working environments should be considered especially for the females in the offices so as to make them feel confident and concentrate on work is shown as under: Method of Review Area of Review Walk-through referring to the HR audit report: Are there posters visible throughout the company specifically prohibiting such behaviors? Review of new employee : Does each employee receive a copy of the policy upon package hire? Review of policy manual: Does the company have a clearly published and posted employee handbook (both) non-retaliation policy? Review of HR files: Are reports of harassment or other inappropriate interviews behaviors investigated promptly by HR and handled discreetly? Review of files/interviews: Are managers trained on how to handle reports of harassment? Are employees advised of their rights and informed on how and where to make a report of inappropriate behaviors?
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Question 6: What are the areas to be concentrated on for HR Audit? Prepare a questionnaire for conducting an audit for manpower planning. Answer: HR audit should concentrate on all the aspects related to human resource management in the organisation.
Topic 1. INFORMATION Related areas to be covered Coverage Source Adequacy Gaps Methodology Reliability Testability Budgeting Time orientation Technology perspective Need assessment Selection criteria Levels covered and frequency Internal vs. external training Quality consciousness Changing needs Climate for self-development Validity of appraisal process Fitness Benefits and/or drawbacks/problems Know-how of appraising Clear objectives Uniformity in process Underlying benchmarks Consistency in ratings Linkages with pay Feedback to employees Changing needs Policy formulation Identifying key positions Availability of successors Matching future needs Responsibility for grooming and developing Handling non/poor performers Appropriateness of policies Company philosophy Internal, external equity Adequacy of rewards Nature of job descriptions Nature of job specification Flexibility in job evaluation systems Control over costs Rationale of reward system Opportunities for improvement

2.

FORECASTING

3.

TRAINING AND DEVELOPMENT

4.

PERFORMANCE APPRAISAL

5.

MANAGEMENT SUCCESSION PLANNING

6.

COMPENSATION

7. 8.

AFFIRMATIVE ACTION SPECIAL ASSIGNMENT (other human resource functions) NEED INTERRELATIONSHIPS

Efficiency of action programmemers Lessons for future Clarity Comments Activities jurisdiction Uniqueness Distinctiveness Presence and awareness about companys human resource policy Clarity of objectives of human resource audit Future outlook on philosophy Capabilities of implementation Expectation from human resource staff Degree of satisfaction Adequacy Attitude and approach Capability and potential Suggestion for change

9.

10.

THE STAFF FUNCTION (the human resource staff)

Questionnaire for conducting an audit for manpower planning.

Does your workforce formation fit the companys business objectives? Does the company have a manpower plan? How do you create a manpower plan? Do you develop a competency-based approach to staffing? Does every position have competency/requirement? Does every employee understand competency/requirement needed to perform a job/position? Does the company have a clear job description for each job/position? And does each have clear competency map? What is the total number of all employees (head count) at the business unit? managerial level : supervisory level : staff/operator level : total : What are the total number of employees (head count) for the human resources department? numbers managerial .................................................. supervisory .................................................. staff .................................................. total