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Learn HR Audit process from HR REMEDY INDIA.

HR Remedy India Provides HR Audit Training Program for working HR Professionlas

The purpose of an HR Audit is to recognize strengths and identify any needs for improvement in the human resources function Third party audit for HR process is always recommended to growth of Organisation. A properly executed Audit will reveal problem areas and provide recommendations and suggestions for the remedy of these problems. Some of the reasons to conduct such a review include:

Ensuring the effective utilization of the organization’s human resources
Reviewing compliance in relation to administration of the organization
Instilling a sense of confidence in management and the human resources function
Maintaining or enhancing the organization and the department’s reputation in the community
Performing “due diligence” review for shareholders or potential investors/owners
Establishing a baseline for future improvement for the function

An HR Audit is like an annual health check-up, it plays a vital role in instilling a sense of confidence in the Management and the HR functions of an organisation.

It is necessary to take a look at these and other questions..

  • Does the organisation regularly forecast the supply of and demand for employees in various categories?
  • Do job analyses exist for all positions in the organization?
  • Are all potential sources of recruitment identified and evaluated?
  • Are measurable selection criteria developed and used while filling up jobs?
  • Do effective training and development programmes exist?
  • Is there a performance evaluation system that helps assess past and potential performance?
  • Is the remuneration programme designed to motivate employees?
  • Is the plant unionised?
  • Does a grievance procedure exist?
  • Does the organisation have high quality of work life?
  • Does the HRM practice contribute to organisational effectiveness?
  • Does the management underestimate the capacity of HRM to contribute to organizational effectiveness?

Approaches of HR Audit

Audit is a tool to judge organizations performance and effectiveness of HR management. Personnel Audit refers to an examination and evaluation of policies, procedures and practices to determine the effectiveness of personnel management.” It is an analytical, investigative and comparative process.

The following approaches are adopted for purpose of evaluation:
1.Comparative approach
2.Outside authority approach
3.Statistical approach
4.Compliance approach
5.Management by objectives (MBO) approach.

1. Comparative Approach: Under this approach auditors identify one model company and the results obtained of the organisation under audit are compared with it.
2. Outside Authority Approach: In outside authority approach a benchmark is set to compare own results. A standard for audit set by outside consultant is used as benchmark.
3. Statistical Approach: Under statistical approach the statistical information maintained by the company in respect of absenteeism, employee turnover etc. is used as the measures for evaluating performance.
4. Compliance Approach: Under compliance approach the auditors make a review of past actions to determine to see whether those activities are in compliance with the legal provisions and in accordance with the policies and procedures of the company.
5. Management By Objectives ( MBO) Approach: Under MBO approach specific targets are fixed. The perform¬ance is measured against these targets. The auditors conduct the survey of actual performance and compare with the goals set.

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