Types of HR Audit. and Process of HR Audit

TYPES OF HR AUDIT

 

 

   There are various of audit  which  can be classified on the basis  of following  factor

1.     TIME PPERIOD

            Most of the  organization follow an irregular   audit  I.e  the  time period  is not fixed for auditing it can  take place  once in a  year  or may  be  once  in three year .but  as per  the  changing  time ,audits  should  take place  on fixed time period  are regularly so  that  constant  check  can be  kept  on the  function   of employee 

2.      CONTACT

            In this  type  of auditing , assessment  can be  carried  out by any of the following 

         Internal audit

                      This type  of audit  takes place  within the  organization  and is  performed  by internal  management  in order to asses and control  the working of the  HR department  

        External audit

                   The external  audit  may  take  place  within  the organization  premises or even  outside  it  is carried out  by  external  professional  who  are  special  hires for this  purpose . unlike  internal  audit  the outcome  of evaluation   from the external  audit  is always  unbiased

3.      PURPOSE AUDIT

               As  per  the  purpose  required  audits can  be divided   onto the following 

 Compliance audit

                     A compliance  audit   check  whether   all  the department are  following   the  rules  and  regulation  of the  organization  or not

Best practices  organization audit;

                          In the  audit the task  executed by HR department  are  compared  with the  best practices of the  other organization   effort  should be  made their  practices  to be the best practices among all other similar  organizations

        Strategic  audit

           Strategic audit  evaluate  the contribution of HR  practices in achieving strategic goals  of the  organization  it also  checks  the improvement   made in the  performance  of the   employees by  providing  them proper working  condition

       Job specific Audit

        This audit  focuses  on specific  function  performed  by the HR  department  these  function  include  recruitment ,training, salary, promotion ,etc  

Process of HR Audit                                       

  The steps that are followed by HR audit for appropriate assessment are shown in figure 

 1) Identifying the Objectives of HR Audit:                    Setting up of definite objectives is the first task carried - out in an organisation . But before setting up the objectives , HR audit assesses the functions and activities to be carried - out under the HR department , compliances of law and order undertaken to guide their principles and actions and ensuring that these HR strategies are in line with the corporate strategies . For the proper evaluation , it is necessary that the organisation's aim , schedule and the planning made by HR audit should move on the same track . 

2 ) Developing a Rough Audit Plan : 

                  An auditor before implementing auditing process should have an idea about the following things : what he has to do , which policies should be preferred , which areas are to be focussed more , what are the best means by which relevant information can be gathered , etc. Thus , an assessor prepares framework of his audit plan so that he can have a rough idea about the manpower required , expected cost incurred and the tools and equipment required for the entire audit procedure . 

3 ) Collecting Background Data :

                 An auditor must have appropriate information about the internal as well as the external factors that may influence the HR auditing process .This information is known as background data . External factors include the competency level of the particular organisation , the legal environment and the entire summary of the organisation . Internal factors include the set objectives , the policies followed by the organisation for achievement of these objectives and the performance of the human resource in different divisions of the organisation . 

4 ) Determining the Technique of Data Compilation :

                   In this step , information is gathered by HR auditors from various sources using different techniques . Some of the techniques used for data collection are interview method , questionnaire method , task force method , observation method , etc. Auditor can opt for one or more than one technique at a time . Besides this , time required and cost of assessment is also decided in advance so that auditing process can take place effortlessly and effectively . 

5 ) Finalising the Audit Plan :

                 In case there is a requirement of any improvement in the rough audit plan prepared by the auditor , changes can be made at this stage before finalising it . Background data and knowledge gained can also be useful in upgrading the pre - planned auditing plan . It is the sole responsibility of the assessor to have a clear cut understanding about the goals to be achieved , techniques to be used , areas to be covered and time and cost required for entire auditing process and then finalising the audit plan . 

6 ) Collecting Complete Audit Data :

      

                 In this process , the assessor gathers all the significant information from various sources and combines them together to analyse the virtues as well as the shortcomings of the HR department . Once HR auditor receives all the data regarding the working of the human resource management , this data is then compared with the final audit plan . The assessor should keep in his mind that till this stage , he should have to collect complete data in order to perform auditing function smoothly . 

7 ) Developing an Audit Report : 

               After gathering entire data regarding the HR functioning , an assessment programme is conducted within different areas of HR department . These areas cover the recruitment , training , advancement , rewards , retention , transfers and retirement functions of the HR department . Alongwith this , working atmosphere , functioning of employees , the objectives of the HR unit , policies and strategies undertaken by HR audit and HRIS are also included during the evaluation . After this , a detailed audit report is prepared by the auditor after covering the entire valuation procedure . 

  8 ) Decision Based on the Audit Report :

                 This is the concluding stage in which the organisation makes appropriate decisions after seeing the final audit report . Management even asks for auditors recommendations so that decision making process becomes easier for them . In case , some changes are required in setting the objectives of HR department or in the strategies or in the performance of the employees , HR auditor's suggestions can prove to be very constructive for the authority .