UNIT-3

HR AUDIT
An HR audit is an objective examination of your business's HR policies, practices,
and procedures. The goal is to look for trouble spots and/or identify ways you can
improve. You can hire an outside company to perform the audit or you can
instruct your HR department to perform an internal audit.
Human Resource audit is a systematic assessment of the strengths, limitations
and developmental needs of its existing human resources in the context of
organizational performance.
-Eric G. Flamholtz.
HR COST:
Human resource costs are costs incurred to acquire or replace people. Like other
costs, they have expense and asset components; they may be composed of outlay
and opportunity costs; and they may have both direct and indirect cost elements.
There are four main reasons why you’d want to measure Human Resource costs:
Monitor departmental costs
Measure impact and overall success
Predict future costs
Calculate a return of investment (ROI)

HR VALUE:
The HR values are the guiding principles that the department will adhere to in all
its activities. These values should align with the organization's overall values and
be specific, measurable, and achievable. The most common metrics used by HR
include headcount, turnover, diversity, compensation, the total cost of workforce
spans and layers, employee engagement, talent acquisition, learning, workforce
planning, productivity, and manager effectiveness.
ORGANISATIONAL DIAGNOSIS:
Organizational diagnosis is a systematic process of collecting and analyzing data to
identify the strengths and weaknesses of an organization. It helps you understand
the current state of your organization, the gaps between your desired and actual
performance, and the root causes of your problems. Weisbord's Six-Box Model,
six categories are used to perform an organizational diagnosis: purposes,
structure, relationships, rewards, leadership and helpful mechanisms. To perform
an organizational diagnosis, it is essential to have a basic understanding of what
“diagnosis” means and why it must be done.
CREATIVITY:
Robert E. Franken: Creativity is defined as the tendency to generate or recognize
ideas, alternatives, or possibilities that may be useful in solving problems,
communicating with others, and entertaining ourselves and others. Creativity is
the ability to generate a thought or an idea that is completely new, appealing, and
useful. Creative managers and employees ask questions and identify new ways to
perform tasks. It is expected that increasing your creativity will help you, your
organization and your customers become happier through improvements in your
quality and quantity of output.

CREATIVE THINKING:
Creative thinking is a skill that enables you to come up with original and
unconventional ideas. Creative thinking is the process which we use when we
come up with a new idea. It is the merging of ideas which have not been merged
before. Brainstorming is one form of creative thinking: it works by merging
someone else's ideas with your own to create a new one. You are using the ideas
of others as a stimulus for your own. This creative thinking process can be
accidental or deliberate.

CHANGE:
Aristotle says that change is the actualizing of a potentiality of the subject.
Change is basically a variation in the common way of doing things. Whenever
people perform a task in a certain way, they get accustomed to them. They
develop methods which they can implement routinely to achieve these tasks. Any
variation in these methods is nothing but change.

How quality of work-life of an employee can be improved?

Quality work is work that meets all deadline requirements, meets completion
expectations and presents accurate information. Additionally, quality work often
has the following characteristics: Free of errors or grammatical mistakes. Meets
deliverable requirements set by the client or company. Here are some ways to
improve the quality of work-life of the employees:
Offer flexible and remote working
Encourage managers to focus on productivity rather than hours
Encourage breaks
Regularly review workloads
Lead by example
Give employees time to volunteer
Reconsider time off
Increase support for parents
Acknowledge every employee is different
Ask your employees for views

STANDARDIZE QUESTIONNAIRE:
A standardized questionnaire is a questionnaire that is written and administered
so all participants are asked precisely the same questions in an identical format
and responses recorded and scored in a specific, consistent manner (Boynton et
al., 2004). Standardizing a questionnaire takes effort; it requires repeated testing
with a big sample and extensive data analysis.

UNFREEZING:
This is the first stage of transition and one of the most critical stages in the entire
process of change management. It involves improving the readiness as well as the
willingness of people to change by fostering a realization for moving from the
existing comfort zone to a transformed situation. This first stage of change
involves preparing the organization to accept that change is necessary, which
involves breaking down the existing status quo before you can build up a new way
of operating.
BALANCED SCORE CARD:
The balanced scorecard involves measuring four main aspects of a business:
Learning and growth, business processes, customers, and finance. BSCs allow
companies to pool information in a single report, to provide information into
service and quality in addition to financial performance, and to help improve
efficiencies.

BENCHMARKING A METHOD FOR IMPROVEMENT:

Benchmarking is a process that involves measuring the performance of your
business against a competitor in the same market. Consistent benchmarking can
help you: Improve processes and procedures. Gauge the effectiveness of past
performance. Give you a better idea of how the competition operates, which will
help you to identify best practices to increase performance.

TECHNIQUES FOR DEVELOPMENT OF INDIVIDUALS:

Employee development is key to your company's success.
.Offer continuous professional development opportunities
.Create individualized development plans
.Help your team improve soft skills (time management, networking, creative
thinking abilities, teamwork and conflict resolution)
.Remove barriers (review outdated processes and rigid structures to remove any
potential barriers)
.Regularly communicate with your team
. Provide clear expectations (lack of interest among individuals should be removed
by creating awareness to them)
HRA:
Human Resource Accounting (HRA) is the process of identifying and reporting
investments made in the human resources of an organisation that are presently
unaccounted for in the conventional accounting practice.
Phases in designing & implementation of HRA system:
1.Identifying HRA objectives: The objectives of HRA system stem form the
management requirements from HR information system. After detailed study and
analysis, each org. unit responsible for HRM should define its functions, kinds of
decisions made, their relative frequency and information needed to make, such
decisions. These information needs must be analysed with present and future
information flow. Once this is done the basis of HRA system in terms of scope and
objectives can be defined.
2.Developing HRA measurements: There are two main ways to take the
accounting for human resources. a) The management may choose a specific or a
range of measurement methods and implement the Human Resource Accounting
System; choice between single measurement or set of measurements. b)
Methods that are non-monetary or monetary are also utilized to evaluate the
value or cost of human resources c) measurement of cost or value or both. Before
using any of these strategies, The validity and consistency of these methods
should be verified.
3.Developing HRA database: These include cost data, time sheets, psychological
measurements, etc. It will become necessary to restructure the organisational
accounting classification to ensure all personnel related costs are classified
separately. The data base must also include non-financial information such as
employee attitude, survey feedback, probabilistic estimates of employee mobility
for measuring HR value.
4.Pilot testing the system: After objectives, measurements, and necessary data
base, next step is to pilot test the system. Care should be taken that the test is not
influenced by extraneous problems and that the management support and
cooperation is available. From the feedback from pilot, system should be
reviewed for its utility, efficiency, cost, etc. and suitably modified.
5.Implementing the HRA system: involves standardising the input output
documents, forms, etc. and familiarising the personnel with the new system. Staff
orientation is a key activity to operationalise the system. A continuing review
would make the system more responsive to changing needs.

HR AUDIT:
The word “audit” comes from the Latin verb audire, which means to listen. The
HR Audit is the process of evaluating the performance of Human Resource
Department and its activities undertaken, and the policies followed towards the
accomplishment of organizational goals. The HR Audit is conducted to identify the
lapses, shortcomings, gaps in the implementation of HR functions and suggesting
the remedial actions, if any.

Objectives:
1.To review the performance of the Human Resource Department and its relative
activities in order to assess the effectiveness on the implementation of the
various policies to realize the Organizational goals.
2.To identify the gaps, lapses, irregularities, short-comings, in the implementation
of the Policies, procedures, practices, directives, of the Human Resource
Department and to suggest remedial actions.
3.To know the factors which are detrimental to the non-implementation or wrong
implementation of the planned programmes and activities.
4.To suggest measures and corrective steps to rectify the mistakes, shortcomings
if any, for future guidance, and advise for effective performance of the work of
the Human Resource Department.
5.To evaluate the Personnel staff and employees with reference to the
Performance Appraisal Reports and suggest suitable recommendations for
improving the efficiency of the employees.
6.To evaluate the job chart of the Human Resource Managers, Executives,
Administrative Officers, Executive Officers, Recruitment Officers, whether they
have implemented the directives and guidelines for effective Management of the
Human resources in their respective Departments.
Steps involved in HR Audit:
1.Determine the scope: The first step of conducting an HR audit is to determine
the scope of the audit. If an HR audit has never been conducted, a comprehensive
review of all policies and procedures is recommended. Going forward, businesses
may choose to conduct audits that focus on specific HR functions, such as payroll
or record keeping.
2.Develop a plan: The next step is to develop a plan for conducting the audit.
Identify the goals of the audit, assemble the audit team and create a timeline for
completing the audit.
3.Gather and analyze the data: Once the audit begins, the audit team should
gather all the applicable documents and forms under the scope of the audit. The
audit team should also review current and potential legal actions.
4.Produce a report: After all of the necessary information has been analyzed, the
next step is to create a report with the findings of the audit. This report should
identify any strengths and weaknesses found during the audit, as well as offer
recommendations to correct any instances of noncompliance.
5.Create an action plan: Once the audit is complete, company executives should
meet with the audit team to discuss the findings and formulate a plan to address
each problem or area of concern identified in the report. Action items may
include changes to policy, procedures and/or training practices. Organizations
should also consider their available resources when setting a timeline for
correcting noncompliance issues, and ensure any corrective actions are realistic
and achievable. In addition, organizations should take measures to ensure the
audit information is kept confidential and protected from unintentional
disclosure.
6.Evaluate the progress: Once corrective measures have been implemented,
organizations should continuously monitor and periodically review the new
processes or procedures to ensure the organization stays compliant.