Human resource management (HRM) has experienced a strong evolution. In order to provide useful information to managers, it is necessary to evaluate the results generated by the design and implementation of personnel policies. This is the goal of the HR audit that includes two different analyses and valuations: the HR policies and their level of fit with the strategy of the firm, and the characteristics of human capital. Several criteria have been used to assess different HR policies. Nevertheless, the measurement of the value that human capital brings to the firm is a very complex topic. Consequently, different models are being presented that aim to properly solve this challenge. This paper will analyse the HR function from two perspectives: the evaluation of the implemented policies and the quality of human capital in relation to real competencies, and the capability to learn and develop new skills.
1.1 INTRODUCTION TO THE STUDY
HRD AUDIT is a comprehensive evaluation of the current human resource development strategies, structure, systems, styles and skills in the context of the short and long-term business plans of a company. HRD audit attempts to find out the future HRD needs of the company after assessing the current HRD activities and inputs available. It uses the same techniques and methodology as HRD Audit with the main difference in perspective. It plays down what is lacking, builds on what is available. It treats what is not there as an opportunity and builds new strengths to utilize the opportunities. HR Audit means the systematic verification of job analysis and design, recruitment and selection, orientation and placement, training and development, performance appraisal and job evaluation, employee and executive remuneration, motivation and morale, participative management, communication, welfare and social security, safety and health, industrial relations, trade unionism, and disputes and their resolution. HR audit is very much useful to achieve the organizational goal and also is a vital tool which helps to assess the effectiveness of HR functions of an organization.
Why HRD Audit?
In the last 25 years a large number of corporations have established Human Resources Development Departments, introduced new systems of HRD, and made structural changes in terms of differentiating the HRD function and integrating it with HR function. A good number of CEOs saw a hope in HRD for most of their problems, issues and challenges. HR systems are people intensive and require a lot of managerial time. There are examples of corporations where HRD has taken a driver’s seat and has given a lot of benefits. In to-days competitive world, “people” or employees can give a good degree of competitive advantage to the company. To get the best out of HR, there should be a good alignment of the function, its strategies, structure, systems, and styles with business and its goals (financial, customer etc. parameters). It should be aligned both with the short-term goals and long term strategies. If it is not aligned, HR could become a big liability to corporations. Besides this alignment, the skills and styles of HR staff, the line managers and the top management should synergise with the HR goals and strategies. HRD audit is an attempt to assess these alignments and ensure the same.
Methodology of HRD Audit:
HRD audit is a tool to measure the Maturity level of human resources development system of an organisation and starts with an evaluation of human resource development strategies. This is based on four metrics such as HRD competencies of the employees, human resources development system maturity, HRD culture and linkage of human resources development to business strategy of the organization. HRD audit starts with a close examination of the...
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