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HR
1. Introduction
Human resource management emerged from traditional personnel Management in the
1980s. Traditional personnel management was viewed largely as involving the
performance of basic staffing functions, often conducted without regard to other
organizational activities and without alignment to organizational objectives. Human
resource management as a profession evolved as an extension of the traditional
personnel role into a more effective organizational activity. Within the field of human
resource management a human resource audit is one method of evaluating or assessing
activities.
The word audit comes from the Latin, audire (to listen). Auditing has existed for
centuries and can be traced to ancient Egypt, Babylon and Rome. The auditors role was
to listen to the records and the notion of an independent outsider looking in is central
to auditing (Higgins, H. N, 1997). It is not the function of an auditor to take the role of
management; the audit role is one of examination and of critiquing management
systems and procedures (Clardy 2004). In this study the term human resource audit
describes the professional practice of auditing applied to human resources management
activities.
Human resource auditing is located both within and between each of the fields of
human resource management and auditing. This case has two parent disciplines:
auditing and human resource management. Auditing is described as an investigative
and information processing activity, which evolved in response to the need for
independently verified stewardship reports (McBrayne, I 1990). Within the discipline
of auditing a human resource audit is a functional or activity audit conducted within or
across a range of defined auditing types.
This paper focuses on the uses of HR auditing to evaluate the contribution of human
resource management activities, as defined in the audit scope, to a corporations current
and future objectives. It will demonstrate that a human resource management audit can
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identify areas where additional value can be obtained from a valued, well regarded
human resource department.
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3. Definition of HR auditing
The word audit comes from the Latin verb audire to listen; the auditors role was to
listen to the records (Higgins, H. N, 1997). Auditing has been defined as:
the
The audit is a diagnostic tool, not a prescriptive instrument. It will help the managers to
identify what is missing or need to improve in the organization, but it cant tell what else
is necessary to do to address these issues. It is most useful when an organization is ready
to act on the findings, and to evolve its HR function to a level where its full potential to
support the organizations mission and objectives can be realized.
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
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Human resource audit also provides an opportunity to assess the financial advantages
and disadvantages of human resource functions, benchmark the function, evaluate the
effectiveness of the function, ensure compliance, establish standards, promote change
and creativity, bring human resources closer to line managers, focus staff on critical
human resources issues and to improve the quality, image and contributions of the
human resource function (Walker, J. W, 1998).
Several benefits that result from an HR audit are:
Identification of the contributions of the HR department to the organization,
Improvement of the professional image of the HR department,
Encouragement of greater responsibility and professionalism among members of
the HR department
Clarification of the HR departments duties and responsibilities,
Stimulation of uniformity of HR policies and practices,
Finding critical personnel problems,
Ensuring timely compliance with legal requirements,
Reduction of HR costs through more effective personnel procedures,
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levels. It helps detect areas where improvement is needed. It also makes sense to
compare where a procedure is being used for the first time.
3.3.3. Statistical: This approach relies on performance measures drawn from the
companys existing information system. From existing records, the audit team generates
statistical standards against which activities and programs are evaluated. With the
mathematical standards as a base, the team may uncover errors while they are still
minor. Often this approach is supplemented with comparative data from external
sources such as other firms, or industry association surveys. The information is usually
expressed in ratios or formulas that are easy to compute and use.
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HR AUDIT QUESTIONNAIRE/CHECKLIST
HR Audits help to determine effectiveness of an HR department and/or HR
systems. They are a systematic, objective tool to assess regulatory or policy
compliance in the workplace.
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ly Strong
eeDisagr
lNeutra
HR AUDIT question/CHECKLIST
Agree
ly Strong
Please put a tick () mark inside the box that indicate your level of agreement for
each question
Staf Socialization
The HR department fulfill their responsibilities by guiding and giving a full
information for the selected employees to socialize shortly with the environment
The company has practiced and allocated budget for welcoming program for
new selected employees
Employee/Labor-Management Relations
The organization has clearly state its philosophy on labor relations and
implement guiding procedures for managers
Top management is informed and supportive of labor management strategies
and goals
There is an atmosphere of management respect for union representation
Company encourage employees to play a proactive role in improving the
labor-management relationship
The management has assess the employees motivation and job satisfaction
towards employees benefit and company's productivity
Human Resource Audit
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ly Strong
eeDisagr
lNeutra
Agree
HR AUDIT QUESTION/CHECKLIST
ly Strong
Employee Communication
Company creates an environment of open communication between
employees and management
The corporate capture the creative insight of employees by soliciting their
ideas for improvement?
Company create environment to delegate decision making to the lowest level
possible
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ly Strong
eeDisagr
lNeutra
HR AUDIT QUESTION/CHECKLIST
Agree
ly Strong