HUMAN

RESOURCE AUDIT
 Human Resource Management

A strategic and coherent approach to the

management of an organization’s most valued
assets – the people working there, who
individually and collectively contribute to the
achievement of its objectives (Armstrong, 2008).

General Model for HRM

 ORGANIZATIONAL STRATEGY AND
STRUCTURE

HUMAN RESOURCE STRATEGY

RECRUITING AND SELECTION

PERFORMANCE APPRAISAL

Identifying and solving human resource

problems

TRAINING

DESIRED RESULT:
The right number of appropriately
skilled people in the right jobs at the
right time.
Human Resource Planning and Forecasting

• The process of assessing the organization’s human

resources needs in the light of the organization’s
goals and changing conditions and making plans to
ensure that a competent , motivated work force is
employed.
Human Resource Planning and Forecasting

• It includes assessing the climate, leadership style in

the organization and analyzing skill levels among
employees, assessing availability of skills in the
external labor market, determining the need for
expanding or reducing the size of various units – all
these related to the staffing process.
• Also include job & work design which determines the
tasks to be performed through job analysis as well as
coming up with job descriptions and specifications.
Human Resource Planning and Forecasting

• Answers the question: “What has been & is

happening to our human resources?”
• Encompasses collection & analysis of such
factors as:
– Labor turnover rates
– Recruiting effectiveness
– Training levels
• Also considers technological & economic
changes
Human Resource Planning and Forecasting

• Analyzes ratios & trends for explanations

• May make forecasts
• 2-factor analysis could be made
• Example:
• Inc. business volume: Inc. manpower thru:
• Recruitment
• Subcontracting
• Inc. total costs ( relate to various
production levels)

• Valuable in knowing termination costs (e.g.,

in downsizing)
 Labor Turnover

• Significance: if manager familiar with

employee turnover
a. he can better control staffing, on-the-job
training
b. he may know employee permanency
• Employee Attitudes
 Recruitment

• The process that requires continuous assignment of workers to all

positions in the organization
a) attract qualified people to the organization
b) select from among candidates and hiring the most qualified
c) assigning them and orienting them to their jobs
d) reassigning employees through transfer, promotion and demotion
or manage employee separation through resignation, discharge or
retirement
• Systems in these area include- school and college recruitment,
advertising in newspapers, webs or professional journals,
psychological, skills, physical tests, group interview, policies on
transfers, promotions and lay-off.
 Recruitment

Ways of evaluating prospective employees:

• For large org.: goals assigned to recruiters
- results may be compared to objectives
- 2 or more recruiters compared (results)
• Statistics: How long new hires stay with org. and how well
they perform.
• Quantitative & qualitative info may be used to evaluate
• Recruitment sources can be evaluated:
- cost/campus visit
- no. of successful hires/college
• Performance appraisal info may be used
 Maintenance and Development of
Human Resources
• Orientation
• Physical Working Conditions
• Motivation
• Performance Appraisal/Evaluation
• Compensation Policy and Administration
• Management-Labor Relations
• Campaigns and Movements
 Performance Appraisal

• The ongoing evaluation of individual and group

contributions to the organization and the
communication of the evaluation to the person
involved
• Made to provide feedback about performance
• Determine the need for training
• Make decisions about pay increases
• Select people for promotion and make judgment on
the need for discipline.
 Performance Appraisal

The process of evaluating individual job performance as

a basis for making objective personnel decisions.

Note: Performance evaluations can take many different

forms, but they almost always involve the manager
observing the employee, recording these observations
and perhaps other relevant data, and then sharing this
feedback with the employee.
Elements of a Good Performance Appraisal

• Objectives set by the employee and manager at the

last appraisal.
• List of specific competencies or skills being
measured, with examples of successful behaviors.
• Ratings scale appropriate to the organization.
Elements of a Good Performance Appraisal

• Space for employee’s self-appraisal.

• Space for supervisor’s appraisal.
• Space for specific comments from the supervisor
about the employee’s performance.
• Suggestions for employee development.
• Objectives to be met by the next appraisal date.
 Appraisal Techniques

• Goal setting
• Written essays
• Critical incidents
• Graphic rating scales
• Weighted checklists
• Rankings/comparisons
• Multirater appraisals
 Training

• A mixture of activities intended to improve the performance

of individuals and groups within the organization
• Organizations that carry out specialized operations and
confronted with rapid change in technology are heavily
committed to training and development
• Systems in these area: skills development programs, coaching,
mentoring general management courses, training and
seminars, sending to postgraduate studies
 Training

• Evaluation:
- Know trainees’ learning & satisfaction
- Areas for evaluation:
1. Need/objective met & criteria satisfied
2. Effective teaching method
3. Effective instructor

• Area 1: key question is:

Does training = increased job effectiveness?
- Supervisor can be asked
 Training

• Area 2: result of considering:

– Trainee’s test scores
– Supervisor’s rating of job effectiveness of trainee
– Trainee’s evaluation of instructor
• Area 3: student test scores & evaluation of instructor
reviewed for any –
– Course weakness
– Curriculum deficiencies

*Evaluations serve as bases for knowing appropriate changes to

increase effectiveness of trainings.
 Mentoring

Mentoring is the process of forming

and maintaining intensive and
lasting developmental relationships
between a variety of developers
and a junior person.
 Functions of Mentoring

• Career Functions • Psychological Functions

Sponsorship Role Modeling
Exposure-and-Visibility Acceptance-and-Confirmation
Coaching Counseling
Protection Friendship
Challenging Assignments
 Compensation and Reward

• The flow of events that determines what wages,

salaries and incentives are paid and what
supplemental benefits and non financial rewards are
provided
• The presence or absence of rewards and recognition
is important to employee morale and performance
• Systems in this area- job evaluation, plant wide
productivity plans, suggestions schemes, wage and
benefit surveys
 Grievances and Disciplines

• Discern trends to prevent labor problems

• No. of grievances per month/ per employee
• No. of disciplinary actions per month/per
employee
 Absenteeism

- May reflect brewing trouble

- 3 concerns:
1. No. of labor days lost per month
2. Absenteeism cost: cost of labor days lost
total labor costs
3. Reasons for labor days lost: sickness,
death in family, other explanations,
unexplained absences
- Must accompany 1st 2 ratios
 Accident Frequency

• If series of accidents:
1. Conduct a safety investigation of all recent accidents
2. Review adherence to safety rules
• Must be done periodically
2 basic monitoring methods:
1. Accident frequency:
No. of lost-time due to accident/Total
labor hrs. worked
2. Track workers’ compensation costs
 Security and Safety

• Includes activities and events that serve to protect

organizational members from illness and physical
dangers in the workplace and assist them in their
physical and emotional health
Systems: Meetings and training with employees about
safety, availability of first-aid stations or clinics. Use
of security personnel, stress management programs
Further readings/reference:
The Operational Auditing Handbook
by Andrew Chambers and Graham Rand