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Human Resource Auditing
15 . C H A P T E R F I F T E E N Human Resource Auditing
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Human Resource Audit An examination of the human resource policies, practices, and systems of a firm (or division) to eliminate deficiencies and improve ways to achieve goals.
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Importance and Benefits of a HR Audit
Helps align HR goals Reduces human resource costs Finds better ways for HR to contribute Provides specific, verifiable data Ensures timely compliance Stimulates uniformity Discloses how well managers are doing Reviews and improves information system Uncovers critical problems & solutions Enhances professional image
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Importance of HR Research
Legal implications People costs are significant Department’s activities help shape productivity and quality of work life Critical resource is human resources Growing complexity of human resource work
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Steps in Conducting HR Audits
Defining the scope of the audit Analyzing data, evaluating, and preparing report Choosing the research approach Selecting research design and data collection method
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Managerial Compliance Employee Satisfaction
The Scope of HR Audits Alignment with Corporate Strategy HR strategy must be consistent with corporate strategy and continually examined Managerial Compliance Managers must comply (obey) with HR policies, procedures and legal requirements Employee Satisfaction Human resource departments should attempt to meet employee objectives where feasible
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Research Approaches to Audits
Comparative Simplest form of research Uses another division or company as a model or may use benchmarks as indices (Index) Compliance Reviews past practices Reviews documentation to ensure managers are complying with policies and laws Management-by-objectives Creates specific objectives to assess performance dimensions Balanced scorecard looks at multiple perspectives
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Research Design & Data Collection
Interviews Surveys Records analysis Human resource experiments
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Interviews Interviews with employees and managers Exit interviews
Interviews with departing employees to gauge their impressions of a firm’s strengths and weaknesses, especially relating to HR systems and policies
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Surveys Surveys May be used to supplement interviews Attitude surveys
Systematic assessment of employees’ opinions about various work-related factors
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Attitude Surveys Areas of Concern Employee attitudes about supervisors
Perceived effectiveness of HR department Employee attitudes about their jobs
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Records Commonly Reviewed
Human Rights Compliance Records Human rights law, number and pattern of sexual harassment Safety and Health Records Number of safety violation observed Productivity Records Absenteeism and employee turnover HR Implementation Records Number of employee complaints on various HR related matters Grievance Records Employee Files and Records Turnover and absenteeism records classified by age, gender, departments Compensation Records Special Programming Reports Planned vs actual of special programs Job Placement/ Selection Records Percentage of jobs filled internally
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Human Resource Experiments
Field experiment HR compares results of an experimental and a control group e.g. implement safety training program with experimental group and compare subsequent safety records with those that did not receive training (control group)
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The Audit Report A comprehensive description of HR activities, containing commendation (approval) for effective practices and recommendations for improving ineffective practices.
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Preparing for the Future
Audits are necessary, but they are backward looking Human resource departments require a proactive approach and a future orientation
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Challenges Facing HR Managers
Productivity improvement Integrating immigrants into the organization Preparing for an aging workforce Changing values Innovation Portable pensions more
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Challenges Facing HR Managers (cont’d)
Technological changes Constitutional changes Employee rewards Women and minority workers Dual-career families Protecting employee privacy
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Human Resource Auditing
15 . C H A P T E R F I F T E E N Human Resource Auditing
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