Question 1: Define Human Resource (HR) Audit. What is the need for HR Audit?

What are the various approaches to HR Audit?

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 ever-changing rules and regulations. An Audit involves systematically reviewing all aspects of human resources, usually in a checklist fashion

Need for HR Audit

The human resources audit measures the level to which the management adheres to laws and regulations that govern employee-employer relations. It also measures the motivation levels of the employees and their satisfaction with their job and employer. As a manager, use the results of the audit to plan, attract and select staff. This audit can also provide the groundwork for conducting the orientation and training of new employees to ensure they are comfortable with their respective job positions purpose. The human resources audit also ensures that workers are being utilized effectively. It assesses whether organizational policies and procedures are being complied with. It improves the goodwill of the human resource department in the eyes of the workers. It also evaluates the performance of human resource function in terms of its contribution to the overall achievement of the company's objectives. As a manager, use the comparative approach of human resources audit if your company benchmarks itself against its competitors. You can outsource this function to an external human resources consultant. You can also carry out in-house surveys and research on issues related to human resources. It basically involves carrying out surveys within the company and setting up a compliance model that sets out the company's human resource policy. As a manager, use the comparative approach of human resources audit if your company benchmarks itself against its competitors. You can outsource this function to an external human resources consultant. You can also carry out in-house surveys and research on issues related to human resources. It basically involves carrying out surveys within the company and setting up a compliance model that sets out the company's human resource policy.

Approaches to Human Resource Audit by Walker

Walker [1998] differentiates between two approaches relative to HR auditing i.e. those centered in the functions internal aspect, and those centered on the external aspect. Internal perspective: From an internal perspective, as in any staff function, there is a trend of valuing its actions as a result of the activities undertaken and its costs. The way of judging departments capability would be on its ability to supply certain services to the organization at the lowest possible cost. According to this approach, the operational measurements traditionally used are those which refer to quantity, quality and reliability, or cost and speed, therefore placing the focus on activities, costs, or productivity ratios. External perspective: From an external perspective, if it is understood that the ultimate appraisal of the effectiveness of HR is based on their impact on the companys results, then the measurements. Should include results obtained outside the function.

Common approaches to Human Resource Audit

There are five common approaches for the purpose of evaluation of HR in any organization: Comparative approach: In this approach, another division or company that has better practices or results is chosen as the model. The audit team audits and compares the audited firms results with the best practices of the model organization. This approach is commonly used to compare the results of specific activities or programs. The approach is often used with turnover, absence, salary data and staffing 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.

Outside authority: In this approach, standards set by a consultant or taken from published research findings serve as the benchmark for the audit team. The consultant or research findings may help diagnose the cause of problems. 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. Compliance approach: This approach reviews past practices, to determine if actions taken followed legal requirements and company policies and procedures. The audit team here often examines a sample of employment, compensation, discipline and employee appraisal forms. The purpose of the review is to ensure that the field offices and the operating managers have complied with internal rules and legal regulations, such as minimum wages and equal employment opportunity laws. By sampling elements of the human resources information system, the audit team looks for deviations from laws and company policies and procedures. The team can then determine the degree of compliance achieved. This concept of HR auditing is based on a legal outlook. According to Antona [1993] the audit of performance or conformity consists of making an inventory of the social situation of the company, considering the labor law norms and regularly verifying the companys compliance with the applicable regulations. Thus, this concept is centered on the verification that the current labor laws are being fulfilled. The audit should verify if the companys policies, practices, and documents regarding employee hiring, retention, discipline, termination, and post-employment are both fair and legal [Higgins, 1997]. These practices and policies must: prohibit discrimination by offering equal employment opportunities; protect the employment seeker from being discriminated against on the basis of age; carry out minimum wages; and contain provisions regarding mental disabilities and reasonable accommodations for disabled workers.

Question 2: Write a brief note on staffing. How does an employee orientation program help employees? What are the characteristics of good employee orientation programs?
Staffing is the process of acquiring, deploying, and retaining a workforce of sufficient quantity and quality to create positive impacts on the organization's effectiveness.

Figure: Staffing Process

Various steps in the staffing process which are explained below:

1. Planning work force requirements Planning work force requirements is the first step in staffing process which involves forecasting and determining the future manpower needs of the organization and thus planning about the number of employees required in any organization. 2. Recruitment In recruitment organizations invites and solicits applications made to the desirable candidates. 3. Selection In selection, screening of applications is done and suitable candidates are appointed as per the requirements. 4. Orientation and Placement Orientation involves induction of employees so that they come to know the working culture of the organization. 5. Training and Development Employees recruited may have many skills but which is required out of them in the concerned organization is important. 6. Remuneration It is a kind of compensation provided monetarily to the employees for the job they performed. This is given according to the nature of job-skilled or unskilled, physical or mental, etc. Remuneration forms an important monetary incentive for the employees. 7. Performance Evaluation In this expected results are compared with actual results 8. Promotion and Transfer Based on the previous step, the decision of promotion and evaluation of the employee is taken up.

Employee Orientation Programmes

Employee orientation programmes are given to new employees at a place of business or work. It helps employees to speed up and learn the ground rules of the company. This often reduces start-up time, training, and other indirect costs associated with having new employees who are unfamiliar with the company culture. Orientation programmes are aimed at reducing the new employee stress factor. The employee orientation programme offers the business its best chance in shaping an employee's skills / work practices and imbibing its corporate philosophy onto the mind of the new employee, because a new hire comes with an open mind to learn and create a good impression. The programmes can last from several hours to several days. The process of new employee orientation str engthens the new employees relationship with the organization. It fuels their enthusiasm and guides their steps into a long term positive relationship with the organization. Effective orientation programmes where new employees are introduced to the company's mission, vision and goals begin to feel they are a vital part of the team are key to sparking early productivity and improving employee retention. "In today's labor market, new employees know they can quit and start somewhere else tomorrow," says Mel Kleiman, author of Hire Tough, Manage Easy How to Find and Hire the Best Hourly Employees. Done poorly, the new employee orientation will leave the new employees wondering why on earth they walked through your door. "Orientation should be geared toward reinforcing new employees' 'buying decisions. The focus must be on convincing them that they made the right choice when they signed on."

Characteristics of Good employee orientation programmes:

Make a good first impression. Make new employees feel welcome and valued as key players on the team. Explain the mission/ purpose of the company and the job so that employees can see the big picture. Assure them they will be carefully and patiently trained not thrown in to "sink or swim. Familiarize employees with rules, policies and procedures. Help employees adapt to their new surroundings, as well as learn who all the players are and how they work together. Establish friendly relationships among co-workers and managers.

Ensure new employees have all the information and tools they need to do their jobs. Motivate employees to succeed as an integral part of the team. Develop the long-term commitment you want from every member of your workforce. Tell them what's in it for them in sum, reinforce their "buying decision. Reduces the stress factor and helps in establishing a positive, can-do attitude at the beginning of a new employment situation.

Question 3: What is HR Scorecard? Explain the reason for implementing HR Scorecard

An HR scorecard is a visual representation of key measures of human resource department achievements, productivity and other factors important to the organization. Factors measured include costs, hiring, turnover, training, performance management and alignment with corporate goals. Most HR scorecards are tied to corporate goals or strategic plans and are designed to track and measure the efficacy of human resource activities and enable managers to make targeted investments in HR and organizational structures. Scorecards include current data and comparisons to previous time periods, such as the previous quarter or year, and historical data to show improvements toward goals.

Reason for implementing HR scorecard

In this era of tough competition it is very important for the firms to have more effective HR management systems. It is a challenge for managers to make HR a strategic asset. The HR scorecard is an instrument that enables them to improve the HR function in the organization. It helps to periodically assess effectiveness of HR functions in a wide range of areas, from recruiting to terminations, and including training and development, communications, and legislative compliance. But implementing effective audit systems for human resource is a difficult task and demands the existence of a unified framework to guide the HR managers. Sometimes firms under-invest in their people and at times invest in the wrong ways. Another difficulty is, managers cannot prepare the projected cash flows for considering the future productivity of present inputs as in case of financial assets but at the same time they are not willing to take the risk. So the best way is to prepare the Balanced Scorecard with sound measurement strategies which are able to link HR functions, activity and investment with the overall business strategy. The HR Scorecard framework was specifically designed for following reasons: It reinforces the distinction between HR do-ables and deliverables: The good audit system must clearly differentiate between the deliverables that influence strategy implementation and doables that do not. Policy implementation is not a deliverable until it has a positive effect on the HR architecture and creates the right employee behaviors that drive strategy implementation. An appropriate HR measurement system will encourage HR professionals to think both strategically as well as operationally. It helps in controlling cost control and value creation: it is the responsibility of HR to minimize the cost of the firm but at the same time, HR has to fulfill its strategic goal, which is to create value. The HR scorecard helps HR professionals balance the two and find the optimal solution. It allows HR professional to drive out costs where appropriate, but at the same time it helps to create value for the firm by retaining good human resources. It measures leading indicators: There are drivers and outcomes in the HR value chain along with leading and lagging indicators in overall balanced performance measurement system. It is thus important to monitor the alignment of the HR decisions and systems that drive the HR deliverables. Assessing this alignment provides feedback on HRs progress towards these deliverables and lays the foundation for effective HR strategies. It assesses HRs contribution to strategy implement ation: The cumulative effect of the HR scorecards deliverable measures provides the answer to the question regarding HRs contribution to the firm performance. All measures have a credible and strategic rationale. Managers can use these measures as solutions to business problems. It lets HR managers to manage their strategic responsibilities: The scorecard motivates the HR managers to focus on exactly how their decisions affect the successful implementation of the firms strategy. This is due to the system ic nature of the scorecard that is it works on all the respects.

It encourages flexibility and change: In this era of ever changing business environment, standardized patterns in any aspects do not work well. The changes are required even in the HR policies with the change in business environment. The basic nature of the scorecard with its causal emphasis and feedback loops helps fight against measurement systems getting too standardized. Every decision needs to be taken based on the past and future scenarios. One of the common problems of measurement systems is that managers tend to get skilled to obtain the right numbers once they get used to a particular measurement system. The HR scorecard provides the flexibility and changes because it focuses on the fi rms strategy implementation, which constantly demands change.

Question 4: Define Competency management. Explain two frame work of Competency management?
Competency management can be defined as a strategy and approach to work structurally on the development of employee competencies in order to improve the performance of an organization Competency management can help you direct the changes in line with the organizations vision, mission as well as strategic objectives - whether the organization wants to exclusively enhance its performance or completely transform its way of doing business. It works as a framework to provide unbiased, fair, honest and reliable feedback to the employee on both his/her performance and the way in which he/ she is demonstrating the required competencies. Competency management may also contribute to the improvement of the organizations overall performance, and can build an environment where employees are motivated. It assists in providing management with impartial information on which human resources decisions can be taken.

Frame work of Competency management

Competency framework is a method of describing the underpinning values that shape and define the culture of an organization. It provides clear focus to support the development of staff in order to deliver the best possible services. There are two general frameworks that an organization can use and the auditor can check: Management Competency Framework Generic Competency Framework

Management competency framework: is generally applied if your job involves supervising or managing
other people, or you are in a technical or professional role in which you regularly operate at this level. This framework splits into three levels. The particular level that applies to you depends on the level of your management responsibilities. Generic Competency Framework: applies if your job does not include supervisory or management responsibilities. There are a number of competencies in each framework. Under each is a general description of the competency, followed by a list of attitudes/ behaviors that would indicate competence in the relevant area. There is also a negative statement at the

Question 5: Write a brief note on workplace policies and practices. Workplace Policies and Practices
Many smaller companies do not like writing down certain aspects of its ways of conducting business. For such companies, it is a mere formality and they do not appreciate people-oriented culture. However, this should be avoided as it is blatantly illegal since laws require that companies should state very clearly the policies and guidelines laid down for the employees 1. Safeguarding employee information Employees personal information should be safeguarded. Separate files should be maintained for personal information as contrasted with employment related information.

Main objective behind it to ensure that while deciding the employees career with the company, his personal information should not be considered. The employment decision needs to be made on the basis of work/ performance related information, not the personal information. For example, while deciding whether to promote an employee or not, instead of his religion, medical history, ethnicity, demography or employees performance at work, job experience and capabilities should be considered. Relevant documents in the work file include information on the employees education, related work experience, and performance evaluations in various positions within the company. An audit can clarify what information must be segregated and the laws that govern employees access to and copying of their files. Other employee information that must be safeguarded includes any materials that contain medical information. 2. Employee performance management An audit can review the companys job descriptions for legal compliance (i.e., to determine whether the descriptions list the essential functions of the job). Various legal issues can arise from performance related problems of employees. An audit will check whether the following systems are in place or not and then recommend improvements and reviews: A 90-day written standard performance evaluation form An annual written standard performance evaluation form A performance management/ performance improvement plan A description of the companys policy for both voluntary resignation and company-initiated termination Wage and salary administration programme, Bonus/ stock option criteria. 3. Safe work environment Audit practices may also help the companies to know about factors that contribute to a safe work environment. A company may choose to develop an audit sheet tailored to a particular issue, such as the companys zero tolerance policy for harassment. For example, a company may wish to review and evaluate its practices of dealing with inappropriate behavior at its workplace. 4. Auditing workplace behaviors that support legal compliance A safe, dignified, and respectful work environment is not only mandated by the law, but also increases motivation and productivity of the employees. An example of review of business practices used to deal with allegations of harassment safe working environments should be considered especially for the females in the offices so as to make them feel confident and concentrate on work is shown as under: Tailored Reviews can be added to the General Audit Review of Business Practices dealing with Allegations of Harassment Method of Review/ Area of Review Walk-through referring to the HR audit report: Are there posters visible throughout the company specifically prohibiting such behaviors? Review of new employee: Does each employee receive a copy of the policy on being hired? Review of HR files: Does the company redistribute a copy of the policy with a cover memo from a senior manager clearly stating the companys expectation of appropriate and respectful behaviors? Does the memo contain information regarding to whom/ where to report violations of the policy? Review of policy manual: Does the company have a clearly published and posted employee handbook (both) non-retaliation policy? Review of HR files: Are reports of harassment or other inappropriate interviews/behaviors investigated promptly by HR and handled discreetly? Review of HR files: Is there documentation representing such investigations with the results? Review of HR files: Is there documentation indicating various forms of sanction up to and including termination if an investigation indicates that inappropriate behavior occurred? Review of files/interviews: Are managers trained on how to handle reports of harassment?

Review of files/interviews: Are employees advised of their rights and informed on how and where to make a report of inappropriate behaviors? Review of files/interviews: Do employees indicate a thorough understanding of the companys beliefs regarding safe and respectful workplace behaviors? The following example at the end show how in practical world organizations pursue safe working environment for their employees. 1. Ethical trading initiative: promoting conflict resolution in union negotiations Cambodia In November 2005 the Ethical Trading Initiative (ETI) was alerted to allegations of serious interference in union rights in a Cambodian factory. In response, the organization brought member companies sourcing from the Fortune Garments factory to meet with workers, intermediary suppliers, factory management and International Textile, Garment and Leather Workers Federation (ITGLWF) representatives, in order to seek a solution to the conflict. After negotiations, in May 2006 an agreement was reached by all parties resulting in: payment of compensation to unfairly dismissed workers; entry of the Coalition of Cambodian Democratic Apparel Workers Union into the factory; and acceptance of trade union demands over pay and conditions. 2. Nike, Adidas, Umbro and more: working group with trade unions to promote trade unionism Global The International Trade Union Confederation reported in the lead up to the 2008 Beijing Olympics that sporting apparel companies including Nike, Adidas, New Balance, Umbro and Speedo had formed a joint working group with trade unions and NGOs to explore, amongst other issues, how to promote trade unionism and collective bargaining across the sector. 3. Agreement with UNI property services to ensure rights of workers Global In 2008, G4S, one of the worlds largest international security firms, signed a global agreement with UNI Property Services, a global union, to ensure that all of G4Ss 570,000 employees (spread across more than 110 countries) have the right to organize in a free and fair atmosphere. This is in addition to complying with international standards and national law in its relations with workers. 4. Training internal monitors on freedom of association Global In 2006 Gap Inc. partnered with the International Textile, Garment and Leather Workers Federation (ITGLWF), the global union federation for the apparel and textiles sector, to train its internal monitoring team on freedom of association and collective bargaining issues. In the same year, the ITGLWF provided Gap Inc. with a detailed briefing. Gap Inc. supplemented this training by holding workshops on the Indian subcontinent and in south East Asia with the ITGLWF and local trade union representatives. These workshops aimed to strengthen engagement between Gap Inc.s Vendor Compliance Officers (responsible for inspecting factories and documenting violations) and key worker rights representatives at regional and local levels. 5. General Electric: expanding supplier due diligence to include freedom of association Global In 2008, General Electric (GE) expanded its supplier due diligence program to cover freedom of association, discrimination and harassment/retaliation. To do this it is engaged in benchmarking activities with other companies to determine how they monitored and audited their suppliers in relation to the ILO principles. In addition, it reviewed its on-site assessment tools and guidance materials and developed new training materials. As a result, over 150 suppliers were asked to change their policies with respect to freedom of association. In addition, around 400 suppliers were asked to adopt an employee dispute resolution process. 6. Mod-Style: offering worker empowerment and training to suppliers China Mod-Style, a business sourcing optical frames from Asia, has the majority of its factories in China, where the only government-affiliated All-China Federation of Trade Unions is recognized and trade union rights are severely restricted. In 2000, Mod-Style joined with the Brotherhood of St. Laurence (BSL), an Australian based charity, to implement business standards based on the conventions of the ILO and the OECD Guidelines for Multinational Enterprises. In the absence of independent trade unions, BSL and Mod-Style have offered worker empowerment training and capacity building in supplier factories to ensure that workers rights can still be adequately voiced and heard. Nonetheless, to date no factories have agreed to this training, with BSL and Mod-Style instead focusing on developing long-term, direct and stable relationships with factory owners and managers. Thus we see that the main aim of the company is to generate sales so Company should not waste its time in building up right work place policies and practices.

Question 6: What are the areas to be concentrated on for HR Audit? Prepare a questionnaire for conducting an audit for manpower planning. Areas to Concentrate On HR Audit HR audit should concentrate on all the aspects related to human resource management in the organization. The areas need to be audited, and verified minutely so as to minimize the chances of error. The various topics and related areas to be covered under HR audit are shown in Table below but you should note that whenever an audit is conducted, it is not mandatory to cover all aspects all the time. The areas to be covered depend on the purpose of the audit. For example, say you are the HR manager of XYZ Ltd.; your CEO warns you that there appears to be something wrong in the recruitment process of the company. Then you may need to conduct an HR audit. If the purpose of your audit is just to find faults in the recruitment process, in that situation you need to simply concentrate on the areas of recruitment and not on all the HR functions. But if you feel that certain faults in some functions are responsible for deficiencies in the recruitment process, you may verify that too.
Topic 1. INFORMATION Related area to be covered Coverage Source Adequacy Gaps Methodology Reliability Testability Budgeting Time orientation Technology perspective Need assessment Selection criteria Levels covered and frequency Internal vs. external training Quality consciousness Changing needs Climate for self-development Validity of appraisal process Fitness Benefits and/or drawbacks/problems Know-how of appraising Clear objectives Uniformity in process Underlying benchmarks Consistency in ratings

2. FORECASTING

3. TRAINING AND DEVELOPMENT

4. PERFORMANCE APPRAISAL

Questionnaire for conducting an audit for manpower planning

Questionnaire for conducting an audit for manpower planning are given below 1. Does your workforce formation fit the companys business objectives? 2. Does the company have a manpower plan? 3. How do you create a manpower plan? 4. Do you develop a competency-based approach to staffing? 5. Does every position have competency/requirement? 6. Does every employee understand competency/requirement needed to perform a job/position? 7. Does the company have a clear job description for each job/position? And does each have clear competency map? 8. What is the total number of all employees (head count) at the business unit?
managerial level : supervisory level : staff/operator level : total : Numbers .................................................. .................................................. .................................................. ..................................................

9. What are the total number of employees (head count) for the human resources department?
Managerial Supervisory Staff Total