Importance of Human Resources: Auditing the Human Resources Function

Importance of Human Resources: Auditing the Human Resources Function: "Effectiveness of the Human Resources Function The purpose of a Human Resources audit is to assess the effectiveness of the Human Resources ..."

Auditing the Human Resources Function

Effectiveness of the Human Resources Function

The purpose of a Human Resources audit is to assess the effectiveness of the Human Resources function and to ensure regulatory compliance. The audit can be conducted by anyone with sufficient Human Resources experience. Having experience working in more than one company is a plus, as it provides the auditor with a broader perspective. There's an advantage to having the audit conducted by an external consultant. Because the external consultant has fewer biases about the organization and has less personal interest in the outcome than an employee of the company, the external consultant may be more objective.

Collect Data

Assess the mission, vision, strategy, and culture of the organization, from whatever written material there is in the company (check with the department or person who handles public, customer, or shareholder relations). Collect existing data such as:

1. Hiring statistics (acceptance rate, hiring rate, hiring projections)

2. Turnover

3. Compensation and benefits philosophy and practice

4. Exit interview summaries

5. Employee complaints (discrimination, harassment, safety, other)

6. Promotion and advancement practices and trends

7. Human Resources budget and expenditures

Where possible, compare the data you collected with market data. This information will provide you with a point of view for the next phase of the audit: the interviews. If, during the interview, discrepancies arise between the data and the interviewee's answer, you can explore the reasons for the discrepancy(s).

Conduct Interviews

The purpose of the interview is to collect input from the internal customer on their Human Resources needs and how those needs are being met. Begin the interview with top management. Next conduct interviews with a sample of subordinate managers including first line management. The topics to discuss during the interview include:

1. Perceptions of the company and its goals
2. Strengths and weaknesses of top management
3. Employee perceptions of the company and top management
4. Relations with subordinates
5. Support of career goals for self and employees
6. Major Human Resources issues
7. Which Human Resources functions work well
8. Which Human Resources functions need improvement

Conduct the Regulatory Compliance Audit

The following areas should be audited as part of the regulatory compliance audit:

1. Personnel files and recordkeeping (contain only job related information)
2. Pay equity
3. Job descriptions (ADA compliance)
4. Legal postings
5. Equal Employment Opportunity and Affirmative Action
6. Forms (applications, internal forms, etc.)
7. Workers' Compensation
8. Fair Labor Standards Act
9. Family and Medical Leave Act
10. Legal reporting

Summarize the Results

Consolidate the information you collected. Compare the results with market surveys. Determine which practices are good/popular/effective/competitive. Determine which practices need improvement. Recommend specific improvements referring to the results of both the Effectiveness audit and the Regulatory compliance audit. Justify the recommendations. Determine how to measure whether the improvements are successful.

Obtain Approval from senior Management

Present the preliminary results and recommendations to senior management individually. Point out how these recommendations will support their needs. Obtain their support, then present the final results and recommendations to the senior management staff for final approval.

Implement the Program

Consider implementing the program in part of the organization as a pilot program. Monitor and measure success and seek to continuously improve processes. Be prepared to modify the program if an organizational change requires it.

ROLE OF HUMAN RESOURCES DEPARTMENT IN THE ORGANIZATION

The Human Resources (personnel) department has staff relationship with other department / managers in the total organization. The personnel department is responsible for advising management from Managing Director to the lowest line supervisor on all area relating to the personnel management and industrial relations. Personnel department also performs various functions of employment, training and development. It represents management in many of the relationships that affect the organization as a whole. It is also responsible for representing various workers problems to management.

Personnel department generally acts in an advisory capacity; it provides information, offers suggestions and is not responsible for the end results. The personnel managers must exercise control very tactfully in order to win the confidence and cooperation of all line managers. He has to persuade the line managers to work with staff specialists and not against them. The authority of personnel manager should derive from concrete personnel policies and programs and from the advantage and result of accepted specialized knowledge.

As a Source of Help:

In certain situations (when line managers lack skill or knowledge in dealing with employee problems) experienced personnel managers assume line responsibility for personnel matters. But it may be resented by the very managers who ought to seek staff assistance in meeting their personnel responsibilities. Personnel managers should learn the reputation and confidence of line managers of being a source of help rather than a source of threat to line managers. Staff assistance is likely to be effective when it is wanted rather than imposed.

As a Change Agent:

Personnel Manager should work as an enabler and change agent regarding personnel areas and he should be familiar with different disciplines like management, technology, sociology, psychology and organizational behavior as organizational adaptability, viability and development are dependent on the human resources development. So the personnel managers should work as a consultant of an organizational development by providing necessary information and infrastructure to line managers. Thus, the role of personnel managers is more concerned with providing information and offering advice to the decision makers rather than making decisions.

As a Controller:

Nevertheless it is still true that effective personnel executives advise on policies that help managers in implementing their programs and provide service and exercise the monitoring and control function sparingly.

Responsibilities within Personnel Department:

As other managers the manager-personnel is also a line manager in relation to subordinates within the personnel department. Personnel Manager is responsible for the success or failure of his department in contributing to the organizational goals. In most of the organizations the personnel manager is responsible for supervising the activities of his subordinates, like employment manager, wage and salary manager, manager for training and development, manager-industrial relationsetc. He is also responsible for the operations of personnel manager at divisional and branch levels.

As the Chief of the Personnel Department the Personnel Manager has to get effective results with the co-operation of all the employees working in the department and by showing the validity of the concept of the team work. The success of the personnel department should be measured in terms of its contributions to the personnel programs.

The effectiveness of HR department can be gauged by the fact how smooth they conduct the negotiations with workers union without the workers resorting to strikes and how fast the periodic agreement (once in 3 or 5 years) is signed with them.