Steps In HR Auditing

Most of the work performed by a company is done by hired employees.  The company’s Human Resources (HR) Department contributes to the company by effectively managing its human resources.  It is incumbent upon human resources personnel to ensure that the human resource function is effectively and efficiently carried out.  One way of ensuring this is the case is to conduct HR audits.  An HR audit is an objective review of the company’s HR policies, practices, and procedures. The objective is to identify strengths and weaknesses so that performance can be improved.  It is suggested that the HR Department itself conduct regular audits, and that a capable outside consulting firm be hired to perform periodic audits.  Often, an external HR audit reveals something that an internal audit might miss

Whatever approach you use, we recommending the following steps in HR auditing:

1) Briefing and orientation
This is a preparatory meeting of key staff members to:

  • discuss particular issues considered to be significant,
  • chart out audit procedures, and
  • develop plans and program of audit.

2) Scanning material information
This step involves scrutiny of all available information pertaining to the personnel, HR Manuals, appraisal forms, material on recruitment, previous HR audit reports, and all such other information considered to be material.

3) Surveying employees
Surveying employees involves interview with key managers, functional executives, top functionaries in the organization, and even employees’ representatives, if necessary. The purpose is to pinpoint issues of concern, present strengths, anticipated needs and managerial philosophies on human resources.

4) Conducting interviews:
What questions to ask? The direction which audit must follow is based on issues developed through the scanning of information gathered for the purpose. However, the audit efforts will get impetus if clarity is obtained as to the key factors of human resource management selected for audit and the related questions that need to be examined.

The questions to be asked on these topics need to be framed very carefully. These questions may be developed by the interviewer/audit team.

The process of the interview and the sequence of questions is often as important as their content. Another effective method is the ‘focus interview’. A focus interview involves meetings between a trained interviewer and selected members of the organisation. Here the interviewer asks a variety of questions planned and prepared in the same fashion as the interview questionnaire.

5) Synthesizing:
The data thus gathered is synthesized to present the

  • current situation
  • priorities
  • staff pattern, and
  • issues identified

Similarly, future needs are identified and appropriate criteria developed for spotlighting the human resource priorities and specific recommendations made.

6) Reporting:
Just as the planning meetings of briefing and orientation, the results of the audit are discussed within several rounds with the managers and staff specialists. In the process, the issues that get crystallized are brought to the notice of the management in a formal report. Follow-ups are necessary after an audit to see if the action plan used to solve problems found in the audit worked or not.

In conclusion, human resource audit is an important aspect to human resource planning. It is practical because if correctly conducted, it should increase the effectiveness of the design and implementation of human resource policies, planning and programs. A periodic and systematic audit helps human resource planners develop and update employment and program plans.

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