HRD Audit….

A basic introduction
 What ?...

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.
What is HRD ?
• HRD is any process or activity that, either initially
or over the longer-term, has the potential to
develop adults work-based knowledge, expertise,
productivity, & satisfaction, whether for personal
or group/team gains or for the benefit of an
organization, community nation or ultimately the
whole human beings.

• Competence Building

• Commitment /Motivation Building

• Culture Building
- Mclean & Mclean
What is HRD Audit?...
HRD Audit is a comprehensive evaluation of
the existing HRD
 Structure,
 Strategies,
 Systems,
 Styles,
 Skills / Competencies &
 Culture

and their appropriateness to achieve the

short-term and long-term goals of the
organisation.
What is involved in Good HRD?
• Top Management Philosophy and
Understanding
• Competent HR Staff and Department
• Line Manager Attitudes
• Union and Employee Support
• Use of appropriate Systems
• Periodic Renewal Exercises
• Business relevance of HRD systems and
Practices
Why ?...

Organisations undertake HR audits for many reasons :

• To make the HR function business-driven.
• Change of leadership.
• To take stock of things & to improve HRD for expanding, diversifying, & entering into a
fast growth phase.
• For growth & diversification.
• For promoting professionalism among employees & to switch over to professional
Management.
• To find out the reasons for low productivity & improve HRD strategies.
• Dissatisfaction with a particular component.
• To become employer of choice. For expanding, diversifying and entering into a fast growth
phase.
• For promoting more professionalism and professional management.
• Bench-marking for improving HRD practices.
• Growth and diversification
• Dissatisfaction with any component
• Change of leadership
Concept…….
• HRD Audit is comprehensive.

Where does the company wants to be 10 years from now, 3yrs from now and 1
year from now?(HRD business linkage score)
What is the current skill base of employees in the company in relation to the
various roles and role requirements?(competency score)
What are the HRD sub systems available today to help the organisation build
its competency base for the present immediate ,future and long term goals?
(HRD systems maturity score)
What is the current level of effectiveness of these systems in developing
peopleand ensuring that human competencies are available in adequate
level in the company?(HRD systems maturity score)
Is the HRD structure existing in the company adequate enough to manage the
HRD in the company?(HRD competencies score)
Are the top management and senior managers styles of managing people in
tune with the learning culture?(HRD culture score)
Concept cond….
• HRD Audit examines linkages with other
systems.

 Total quality management.

 Personnel policies
 Strategic planning.

• HRD audit is business driven.

Methodology of HRD Audit
• Examines long term and short term plans and
vision to assess Competency Requirements
• Identifies broad Competency requirements for
future Business Goals
• Examines the existing HRD strategies, systems
and practices and assess their appropriateness to
have the required competencies
Methodology of HRD Audit
• Examines the adequacies and inadequacies of
HRD structure, staff and their competencies,
line managers and their attitudes, top
management and their support, unions and their
role in competence building for future
• Suggests mechanisms for improving all these in
the business context
Methodology Adopted
• Interviews
▫ Individual and group
▫ Top Management
▫ Line Managers
▫ HRD Staff
▫ Workmen and others
• Questionnaires
• Observation
• Analysis of records and secondary data
Methodology
• Workshops could be used
• Task forces and internal teams could also be
used
• External Auditors have a significant role
• Benchmarking of questionnaire data may be of
use
What does a full HR Audit entail ?
• Legal compliance • Employee Relations
• Compensation/Salary • Files/Record Maintenance/Technolo
Administration • Policies and procedures (including
• Employment/Recruiting employee handbook)
• Orientation
• Terminations
• Training and Development
Pillars of HRD audit,measuring
effectiveness……
• HRD systems maturity.
• HRD competencies.
• HRD culture.
• Business linkages of HRD.
HRD Score Card…
This model is based on the assumption
that:
Competent and committed employees are
needed to provide quality products &
services at competitive rates & ways that
enhance customer satisfaction.
HRD Score Card…
Name of the Organisation

HRD HRD HRD Business Overall

System Competence Competence Linkage HRD
Maturity Score Score Grade Maturity
Grade rating

B* C B* B B*CB*B
Assesment ratings….
• 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.
Parameters to be audited…
1. HRD Systems Maturity…
The HRD systems maturity assesses the extent
to which various HRD subsystems and tools
are well designed & are being implemented.
The systems should be appropriate and
relevant to business goals.
It should focus on current and future needs
of the corporation.
The HRD strategies and systems should flow
from the corporate strategies.
 The systems should be well designed and should have a
structural maturity.
 They should be implemented well.
 The employees should be taking them seriously implemented well.
 The employees should be taking them seriously and follow meticulously
what has been envisaged in each system.
 The overheads of implementation should be low.
 The subsystems should be well integrated and should have
internal synergy.
 They should be adequate and should take care of the HRD
requirements of the organisation.
HRD Systems Maturity…
• The following subsystems are assessed and
depending upon the extent to which they meet the
requirements a score is assigned.
Manpower planning and recruitment
Performance Management Systems
Feedback and Coaching Mechanisms
Training
Career development and Succession planning
HRD Systems Maturity…
Job-rotation
OD Interventions
HR Information systems
Worker Development methods and systems
HR Information Systems
Potential Appraisal and Development
Other subsystems if any
HRD Competencies in the Organization…
This dimension indicates the extent to which HRD
competencies are well developed in the organisation.

The HRD Staff

 The Top Management

 Line managers and Supervisory Staff

 Union and Association leaders

 Workmen, Operators and Grass root level employees

HRD Competencies in the Organization…
• Each of the groups is assessed on :

The level of HRD skills they possess

Their attitudes and support to learning and their own

development

Extent to which they facilitate learning among others in

the corporation and those who work with them.

Their attitudes and support to HRD function and systems

Internal efficiency of the HRD function (HRD Department)

HRD Staff…
 How professionally qualified are they?

 Do they seem to demonstrate adequate knowledge base?

 Are adequately trained in the appropriate HRD systems?

 Are they sensitive to internal customer requirements?


 How good is their skill base in implementing various
systems?
 Do they demonstrate OCTAPACE values?

 Are they quality conscious?

HRD Staff…
Are they familiar with the business goals of
the corporation?
Are they cost conscious?
Are they empathetic?
Do they spend adequate time trying to
understand the requirements of all
categories of employees?
Top Management…
Do they understand HRD and its significance in achieving
business goals?
· How supportive are they of HRD interventions and values?
· Are their leadership styles facilitative of a learning culture?
· Are they willing to give the time needed for HRD?
· How well do they subscribe to the HRD values like the
OCTAPACE values?
· How well do they practice HRD values.
· How committed are they to create a learning culture in the
organisation?
· Do they invest their time, effort and energies in employee
development?
Line Managers and Supervisory Staff…
· How much do they understand the significance of
HRD?

· Are they interested and motivated to develop

themselves?

· Are they willing to spend their time and effort in

developing their subordinates?

· How supportive are they of HRD efforts?

• Do they have listening and other skills required

facilitating development of their juniors?
HRD Styles, Culture and Values…
• The extent to which the leadership and managerial styles
are empowering and competence building is assessed by
studying the leadership and supervisory styles.

• The extent to which the HRD culture and values are

practised and stabilised in the corporation are measured.

▫ The HRD culture is culture that promotes Human potential

development.
▫ It is also a culture that promotes a learning organisation.
Business linkages of HRD…
• This score indicates the extent to which HRD efforts (tools,
processes, culture etc.) are driven to achieve business goals.
• The business goals includes:
· Business Excellence including profitability and other outcomes
the organization is expected to achieve;
· Internal operational efficiencies;
· Internal Customer satisfaction;
· External Customer satisfaction;
· Employee motivation and commitment;
· Cost effectiveness and cost consciousness among employees;
 Quality orientation;
Role of HRD Audit in Business Improvements

• HRD audit is cost effective

• It can give many insights into a company's
affairs.
• 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 and the role of
line managers in HRD
Role of HRD Audit in Business Improvements
• Improvements in HRD systems
• Increased focus on human resources and human
competencies
• Better recruitment policies and more professional staff
• More planning and more cost effective training
• Strengthening accountabilities through appraisal
systems and other mechanisms
• Streamlining of other management practices
• TQM Interventions
Organisations that Have done HRD Audit
• Aditya Birla Group has been doing it for the last 8
years
▫ Rajashree Cement, Vikram Cement, Hindalco, Indo-
Gulf Fertilisers, Gwalior Grasim, Harihar Fibres
etc.
• L&T, Crompton Greaves
• Gujarat Guardian
• Gujarat Gas
• Apollo Tyres
• Alexandria Carbon Black
Some Organisations using HRD Audit
• Godrej Soaps
• GVFL
• BPL
• Tyco International
• Gati Cargo Management Services
• Wokhardt Hospitals
• For detailed client list visit: www.hrdaudit.com
 Thank you….
"The unexamined work life is
not worth living."

Socrates’ (469-399 BC)

“The things that get measured gets managed”

Kaplan (2000)