Sunday, May 15, 2011

Discuss the concept of Human Resource Audit, its benefit and scope.

Discuss the concept of Human Resource Audit, its benefit and scope. Collect few HR Audit Reports of your organisation or an organisation where HR Audit is carried out and write down your comments regarding their relevance. Briefly describe the organisation you are referring to.

Ans:- HRD audit is a comprehensive evaluation of the current HRD strategies structure, systems styles and skills in the context of the short and long-term business pans of a company. It provides inputs required to assess all aspects of HRD and assign the HRD score for the company on a number of dimensions. Its main objective is to align the HR function (structure, systems and processes) with business goals or to create a business-driven HR function. Since it incomprehensive, it uses a variety of methods including interviews, observation, secondary data workshops. It has to be business-driven and comprehensive.
BENEFIT:- To can get the top management to think in term of strategic and long-term business plans
The audit, therefore, has forced the top management to share their plans across the organisation resulting in increased involvement and commitment of employees. In a few cases a new system of annual planning and sharing of the business plans with management staff, to enable them to plan their own activities and competency development programmes, have been initiated.
Changes in the styles of the top management.
Any successful HRD company has an excellent learning environment. Thus one of the objective of HRD is to create a learning organisation. A learning culture can be created only if the managers of the company exhibit an HRD orientation, ability to convert and use mistakes, conflicts and problems as learning opportunities and so on.
Role clarity of HRD department and the role of line managers in HRD
Role clarity of HRD department and the role of line managers in HRD
In almost all cases, the HRD audit has been found to draw the attention of employees at various levels to the important role of the HRD department: current as well as the future, better role clarity of the HRD department and the HRD function, resulting in increased understanding of line managers about their HRD role and the uniform results of HRD audit. While the degree may very from organisation to organisation depending on various factors, this exercise has favorable impact on employee productivity.
Improvements in HRD systems
HRD audit has helped most organisations in measuring the effectiveness of their HRD systems, and in designing or redesigning HRD systems, the most frequently changed or renewed system include performance appraisal, induction training, job rotation, career planning and promotion policies, monitoring communication and training. A number of organisations have changed or strengthened one or more of their HRD subsystem as a result of HRD audit.
Increased focus on human resources and human competencies
One of the results of HRD audit is to focus on new knowledge, attitudes and skills required by the employees. Comments are made about the technical, managerial, human and conceptual competencies of staff at various levels. This differentiation has been found to help organisations in identifying and focusing sharply on the competency requirement and gaps. The audit establishes a system of role clarity and fixing of accountability.
Better recruitment policies and more professional staff
HRD audit proposes the competence base required by the organisation. It gives direction for competency requirements of employees at various level, thus providing base for recruitment policies and procedures. As a results, in some companies, new recruitment and retention strategies have been worked out. In other companies, the audit has led to strengthening recruitment policies and procedures.
More planning and more cost-effective training
HRD audit has been found to assist in assessing the returns on training. One of the aspects emphasised in the HRD audit is to calculate the investments made in training and ask questions about the returns. The process of identifying training needs, and utilization of training and learning for organisation growth development are assessed. As direct investments are made training, any cost benefit analysis draws the attention of the management and HRD managers to review the training function with relative ease.
Strengthening accountability through appraisal system and other mechanisms
HRD audit can give significant inputs about existing state of accountability of employees. This can be assessed through performance appraisal as well as through the work culture and other cultural dimensions. A number of organisations have introduced systems of performance planning, sharing, of exceptions and documenting the accountability of staff. HRD audit has led to the chaining of appraisal systems.
Streamlining of other management practices
Most often HRD audit points out the strengths and weakness in some of the management systems existing in the organisations. It also indicates the absence of system which enhance both human productivity and utilization of the existing competency base, e.g., MIS, rules and procedures, etc., which may have an effect on the functioning of employees. In a few cases HRD audit has helped the management to look at some subsystems and work procedures. Preparation of a manual for delegation of powers, clarification of roles and responsibilities, developing or strengthening the manuals of financial and accounting procedures and systems, strengthening the information systems ad sharing of information are some of the resultant activities.

TQM interventions
Quality improvements and establishing TQM systems require a high degree of involvement of employees. In a number of of cases HRD audit has pointed out to the linkages between TQM and other quality programmes, and helped in strengthening the same.
Due to improvements in the training systems, enhancement of the quality of group work and strengthening of the appraisals system, TQM programmes also get improved. In few organisations performance appraisals have been changed to integrate quality aspects and internal customer satisfactions into the appraisals systems. Thus HRD audit leads to the strengthening of quality systems.

It can enhance the ROI (Return on Investment) of the HR function
In addition to all the above points, HRD audit aligns the HR function and activities with business goals. In the process it eliminates non-value adding HR systems, activities and processes and enhances the value-adding activities and processes. It reduces nonproductive assets of the HR department.
HRD audit requires the use of number of methods for HRD audit. The methods are presented below. These methods are used in combination and a good audit requires the use of all the methods.
Individual Interviews
The auditors normally make it a point to interview the top level management and senior managers individually. Such individual interviews are a must capturing their thinking about the future plans and opportunities available for the company. Also, by virtue of occupying strategic positions, the top management has the required perspective for good HRD audit. Thus a good HRD audit begins with individual interviews of the top management.
Group Interviews
Normally, in an audit of companies having thousands of employees, it is not feasible to meet everyone individually. It is my experience the group discussions and interviews serve as a good mechanism for collecting information about the effectiveness of existing system. Group interviews are conducted normally for groups of four to eight individuals. It is preferable to have employees drawn for same or similar levels.
In workshops a large number of participants ranging from 30-300 can be gathered in a room and asked to do the HRD audit. Normally the participants work in small groups either around various subsystems or around different dimensions of HRD, do a SWOT analysis and make presentation. The Workshops also can be used to focus so specifically on individual HRD systems like performance appraisal. The workshop outcomes have been found to be very good.

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