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International Public Management Association for Human
Resources

Conducting an HR Audit:
How HR Can Better Measure the
Effectiveness of its Functions and
Programs?
By Judith Brown, Director of Research

International Public Management Association
for Human Resources
1617 Duke Street

Alexandria, VA 22314
(703)-549-7100

http://www.ipma-hr.org

Introduction
Conducting an HR Audit---How HR Can Better Measure the Effectiveness of its Functions and Programs
By Judith Brown, Director of Research
Redefining the role of HR
The historical role of Human Resources has changed dramatically since its inception in the early 1900s. What began as a primarily clerical function is now a strategic partner in planning and attaining organizational policies and goals. Today’s business climate puts the onus on the HR department to accept the challenge of doing more with less, while contributing value toward business objectives. Human resources also has to address the rapidly changing conditions affecting the type of employees required and their changing needs, so the function requires flexible and knowledgeable practitioners. HR strategic planning has become an integral part of doing business and it is important that human resource professionals be both professionals in the field and competent business persons. In order to walk the talk of being a “business partner,” HR managers have to provide real evidence that they are having a strategic business impact. Management is often asking, “How are we doing?” However, this is not always an easy question to answer. This is especially so, when it is difficult to obtain some type of objective measuring tool to determine how well a certain HR function is performing.

To legitimize the claim of being “business partners”, HR managers must clearly demonstrate how HR services can accomplish the business objectives set forth by the organization. The HR function is often overlooked for audits/measurement tools, to assess its effectiveness and legal regulatory compliance. However, the HR Audit is a process that sets the stage for a true transformation in HR strategy and services. It links HR systems and services to organizational objectives while focusing on the business needs of internal customers.

Purpose of HR Auditing
The purpose of the HR Audit is to conduct a more in depth analysis of the HR function to identify areas of strength and weakness and where improvements may be needed. Conducting an audit involves a review of current practices, policies, and procedures, and may include benchmarking against organizations of similar size and/or industry. Areas that should be audited include, but are not limited to:

Legal compliance (EEO, AA, ADA, FMLA, IRCA, etc.)
Record-keeping (personnel files, I-9s, applications, etc.)
Compensation/pay equity
Employee relations
Performance appraisal systems

2

Policies and procedures/employee handbook
Terminations
Health, safety and security (OSHA compliance, Drug-Free Workplace, AIDS in the workplace, etc.)
Legislation affecting all aspects of Human Resources is constantly evolving and the legal ramifications of noncompliance impact the HR department, the organization, and its employees. An HR Audit can help to ensure legal compliance while measuring the effectiveness of HR programs. There are many reasons why an HR Audit should be conducted, and the results can be used for multiple purposes. At a minimum, the results of an audit help you to determine what needs to be done, how these changes will impact the bottom line of your organization, and how to prioritize problem areas in terms of significance.

It is hoped that this manual will demonstrate how to position your HR plans to support and enhance your organization’s goals. Step confidently into your role as a strategic business partner. Good luck in your journey.

________________________________________________________________________ The Auditing Process
(Reproduced with permission...
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