HRM Effectiveness Audit

The HRM Effectiveness Audit: A Tool for Managing Accountability in HRM

Definition:

HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization.

Scope of Audit:

Generally, no one can measure the attitude of human being and also their problems are not confined to the HR department alone. So it is very much broad in nature. It covers the following HR areas:

. Audit of all the HR function.
. Audit of managerial compliance of personnel policies, procedures and legal provisions.
. Audit of corporate strategy regarding HR planning, staffing, IRs, remuneration and other HR activities.
. Audit of the HR climate on employee motivation, morale and job satisfaction.

Benefits of HR Audit:

It provides the various benefits to the organization. These are:

. It helps to find out the proper contribution of the HR department towards the organization.
. Development of the professional image of the HR department of the organization.
. Reduce the HR cost.
. Motivation of the HR personnel.
. Find out the problems and solve them smoothly.
. Provides timely legal requirement.
. Sound Performance Appraisal Systems.
. Systematic job analysis.
. Smooth adoption of the changing mindset.

Approaches to HR Audit:

There are five approaches for the purpose of evaluation of HR in any organization:

. Comparative approach
. Outside authority
. Statistical
. Compliance approach and
. Management By Objectives(MBO)

Conclusion:

The auditors always prepare and submit an audit report to authority of the organization, which may be clean or qualified. The clean report indicates the appreciative of the department's function, but the latter one represents the gaps in performance and therefore contains remarks and remedial measures. HR Audit is very much helpful to face the challenges and to increase the potentiality of the HR personnel in the organization.

References:
William.B.Werther and Keith Davis, Human Resource Management and Personnel Management, 5th edition, McGraw-hill, 1996.
K. Aswathappa, Human Resource Management and Personnel Management, 4th edition, McGraw-hill, 2006.