HR Audit - Definition - Components - Approaches - Methodology

1. Submitted By :
Shubhra Dewangan

2. HRD Audit
An HRD 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.

3. Difference:
HR Audit & HRD Audit
is
evaluation of only few
activities
• Structure,
• Strategies,
• Systems,
• Styles,
• Skills /
Competencies
• Culture
is a
comprehensive evaluation
of the entire gamut of HR
activities
• HR Cost
• HRD activities
• Health, Env. &
Safety
• Legal Compliance
• Quality
• Compensation &
Benefits

4. Purpose of an HR Audit
The reason for conducting an HR audit is to find
out –
o How effective and efficient the organization's HR
activities are
o To determine areas for improvement
o Identify changes

5. Components of HR Audit
(HR AUDIT MODEL)
2.
BEHAVIO
R
4.
INTERNAL
CONTROL
S
1.
ACTIVITIE
S

6. Scope of HRD Audit
HRD Audit encompasses all the areas like as…
 Manpower planning
 Goals, policies and objective
 Promotion and transfer polices
 Performance appraisal systems
 Training and development functions

7. Objectives of HRD Audit
To determine the effectiveness of management
programmes
Develop a statement of findings with
recommendations for correcting deviations
To study the current manpower inventory

8. Frequency of HRD audit
It is best to have a HR audit once in a year. The HR audit,
if conducted continuously and regularly, then it becomes a
fairly managed process.
The chances of drastic corrections become lower if it is
conducted regularly.
Usually, the frequency of the audit being conducted
depends on the company.
An ideal audit can be conducted for every 18 months but
the management must see to it that a well efficient audit is
done on yearly basis.

9. Approaches to HR Audit
• Auditors may adopt any of the five
practices for the purpose of evaluation:
Comparative
approach
Outside
authority
approach
Statistical
approach
Compliance
approach
and
Managemen
t By
Objectives

10. HRD Methodologies
Interviews
Group Discussion
Observation
Questionnaire
Focus groups
Process mapping
Review of documentation

11. Challenges in HRD Audit
 Build and improve quality consciousness
 Strive to recruit and retain competent , creative
employees
 Align biz processes with technology infrastructure
 Nurture creative and supportive work culture
 Train and develop the employee through 360 degree,
feedback, appraisals.
 Promote learning orientation-informal networks

12. HRD Score Card…
Name of the Organisation ABC
HRD
System
Maturity
Grade
HRD
Competenc
e Score
HRD
Culture
Grade
These four indices consist of the four pillars of HRD effectiveness. All the four
dimensions are assessed using following ten point rating system.
A* Highest Score and Highest Maturity Level
A Very High Maturity level
B* High Maturity Level
B Moderately High Maturity Level
C* Moderate Maturity Level
C Moderately low Maturity level
D* Low Maturity Level
D Very low Maturity level
F Not at all present
U Ungraded
Business
Linkage
Grade
Overall
HRD
Maturity
rating
B* C B* B B*CB*B

13. Steps In Writing HRD Audit
REPORT
Monitor employee record keeping process
Review organization's recruitment and
selection process
Examine workplace safety measures and
T&D opportunities
Review employee relations processes
Compile compensation and benefits
information

14. Role of HRD Audit in
Business Improvements
• HRD audit is cost effective
• It could get the top management to think in terms of
strategic and long term business plans.
• Changes in the styles of top management
• Role clarity of HRD Department in HRD Improvements
in HRD systems
• Increased focus on human resources and human
competencies
• Improvements in HRD systems
• Better recruitment policies and more professional staff
• More planning and more cost effective training
• TQM Interventions

15. Organisations that
have done HRD Audit
• Aditya Birla Group (8 years)
• L&T
• Gujarat Gas
• Gujarat Guardian
• Apollo Tyres
• Alexandria Carbon Black
• Godrej Soaps
• GVFL
• BPL
• Tyco International
• Wokhardt Hospitals Bangalore
• Bharat Electronics
• NTPC