Why Human Resource Audit Is Compulsory

Updated: Jan 09, 2019 UTC
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Conducting an HR audit can also help an organization comply with the law as part of an effective overall risk management strategy. Such due diligence helps uncover any potential problems before a government inspector comes calling, or the organization is faced with a human rights claim or wrongful dismissal suit.

Before you conduct any Audit, first decide the objective(s) of the Audit to be conducted in your Organisation/Department/Section/Project/Staff Wise or whatever the classification of groups:

Objectives may be as follows:

  1. Organisation Culture (feels the deviation)
  2. Change in Human Resource Policy (Up-dation at par with Competitive Organizations)
  3. Skill Inventory (To match with Job Description and Future Needs)
  4. Retention of the best
  5. Training Needs
  6. Motivational Factors (including de-motivational already prevalent)
  7. Communication Standards (as set by Organisation)
  8. Job Satisfaction (including Job Dissatisfaction/No Job Satisfaction)
  9. Stress Measurement
  10. Welfare


The above are only sample topics where you can conduct Audit and if required, you can add as per your requirement.

Who Conducts the HR Audit:

A committee should be formed with the approval of the Management.  This committee should comprise of Line Managers and HR Manager.

It is imperative that in all Audit exercises, HR Manager must take initiative and action-plan. Action Plan must be prepared in consultation with Line Managers and with the approval of Management.  Action Plan may be set periodically or project-wise or Objective-wise or staff-wise:

Period and Duration:

There can be 3 types of Audits, i.e.

1)    Formal and Regular

2)    Informal

3)    Random Method

4)    Incident-based/Reports/Results-based

Audit conducted thro Formal and Regular  has its own merits and de-merits. Since everything is planned one and the results cannot  meet your objectives. A sort of well cooked food will be served because of your prior plan.  False Attitude will be presented may be out of fear.  Generally Planned Audit  can be influenced by out-ward show and it is very difficult to measure the inner core to meet your objective.

For that matter, Informal and Random Method can be highly useful in collecting the data to meet your objectives.  Very rarely it can also fail but if you have a matured approach and organization involvement, definitely you can do justice in Random Sampling.

Incident-based/Report/Result-based Audits will help you a lot  in Training Needs.

Formal Audits can be highly useful in Man-power Planning, Job Description, welfare, salary packages, and identifying Motivational Factors.

While setting the Audit Plan you can draw 2 types of Audits:

  1. Regular and formal one.
  2. Regularly Informal and Random

Remember, Audit job is not an occasional and periodic one, it is your daily routine job.  Do Audit regularly both by Formal and Informal.  For that matter, your discussion with any staff on any topic in your organization, it must be focused more on Audit-oriented.


How to Develop Audit Skills?

1)    Be a Facilitator in your approach rather than an Authoritative

2)    Be Un-biased

3)    Be friendly

4)    Accept the Criticism and healthy ideas

5)    Appreciate the strength of a person

6)    In any discussion, co-relate with respective objective or if objective is not there, create the objective and match it.

7)    You must be a Motivational and Communication Model

8)    Develop Listening Skills

9)    Develop Learning Skills

10) You must know to differentiate between “Want” and “Need”. Job-related and organization related are Needs.  Outer peripheral of the need is Want. 


A Good home-work must be done before doing a Regular and Periodic Audit.  Well-contained Check-list must be prepared.  Let it be crisp and cover all points to reach your set objective.  Try to give numerical value to all your questionnaires so that it will facilitate to obtain evidential data. You are conducting the Audit to measure the present level of performance.


Classify Skills under 3 categories such as Attitude, Skills and Knowledge.

Let your check list must include:

Available Skills and Knowledge

Then you match it with Actual Requirement as per Job Details.

Generally Attitude cannot be audited at the time of regular Audit and many times it can be pretended one also.

Attitude Audit can be consulted with Supervisors or HODs.

You must audit in parallel with traits definitely required on Attitude, Skills and Knowledge for the particular job or project. You must know the factor of Weightage.  A special type of  HR Skills are required while deciding on Weightage.

For example, weightage on Punctuality is more for down-line than the higher category. Weightage of Leadership and Motivational Factors is more for higher category than the lower category.  Stress Control is more in higher level than the lower level.

Audit micro-level in down-line category and macro-level audit is for higher level.

Ratio of Audit Questionnaires:

Generally, you can split 50% for Skills, 30% or 40% for Knowledge and 20% for Attitude for higher level.  50% for Skills, 20% for Knowledge and 30% for Attitude for down-line. Instead of selecting traits in general, go mirco-level splits in Traits that are particularly required for the said target.  It is better to consult line Managers before or while setting the Questionnaires.  In Technical Category, give more weightage to Work Methods. All include questionnaires on control of Re-work, Rejection and Continuous Improvement attaining thro ASK. You can allocate the percentage and weightage level of ASK as per the needs of the Job Demand.


Conduct Informal Audits thro personal Discussions, observations, case studies, role play and so on.  But get the evidences.  


During regular Audit, try to do random audit method.  That reveals the exact and true picture of the evidences.  Never influenced by the Auditee.  If you are so, then your very purpose of Audit gets defeated.  Keep in mind the organization and Job Demands and also the employee development.  Instead of checking in chronological order, demand data in random way.


After collecting the data with evidences, consolidate the data as follows:

Available Data

Scope for Improvement

Short-fall and also Excess if found

Reasons for Short-fall

Excess ASK (Can it be utilised for organisation purpose?)


Instructions:  It is again advised that it is the onerous responsibility of the HR Professionals to conduct Human Resource Management Audit.  For each creative ideas and action, do not expect Management’s instructions.  Only you will have to guide the Management and Line Managers in bringing any HR System and its Operation.  Hence for Audit exercise also, be creative and initiative and action-oriented.


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