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HR Audit

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HR Audit
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   HUMAN RESOURCE AUDIT   Like any other audit of the accounts of firm or organization, there was also a distinct audit called Human Resource Audit. Human Resource Audit includes the Audit of anorganization when it was taken up comprehensively. Generally the purpose of Audit ismeant for verification of Accounts, Financial tatements, !udget, rofit and Loss Account, #uarterly, Half yearly, yearly !alance heets, tatements of Receipts and   ayments , Ledger !ooks, $nvoices, %ills, &ouchers, $ncome ' ()penditure statementsetc. which are commonly relates to fiscal discipline. However, it is pertinent to note that the *omprehensive Audit, %esides the a%ove aspects, must necessarily o%serve, verify,analyze, identify, the aims and o%+ectives, goals, the policies, rogrammes, lans of anorganization, the way in which the firm spent money on Human Resources, Recruitment,election, erformance, elfare of the employees etc. in order to realize its goals, aimsand o%+ectives. -his item of work can %e termed as Human Resource Audit. trictly speaking, it can %e regarded as an $nspection on Administrative aspects. $t aims at looking the following items of audit$nspection/0.Regularities and $rregularities1.Lapses and 2missions3.Appropriations and 4is5appropriations6.Advantages and 7is5advantages of the olicies and rogrammes8.Responsi%ilities and $rresponsi%ilities9.2rganization and dis5organization.:.4anagement and 4is5management.;.Gradation and de5gradation.<.Rationalization and irrationalization. 0=. 7isciplinary *ontrol  Human Resource Audit can also %e termed as ersonnel 4anagement Audit. $n $ndia,the *omptroller and Auditor General of $ndia, will take up the Audit of the Accounts of the &arious 7epartments, organizations, Government (nterprises, >ndertakings. His Audit includes the Human Resource Audit. -he *AG will analyze critically the policies of the schemes, its aims and o%+ectives, realities, how far the realization of the aims and o%+ectives derived with special reference to the funds allotted, spent and e)penditure%ooked on the Human Resources.  Human Resource Audit actually reflects on the e)amination and evaluation of the lans,  olicies, ractices, rocedures, rogrammes, in order to determine the effectiveness and efficiency and practica%ility of the Human Resource 4anagement and to have a check onthe work done %y the 4anagement whether the 4ission, &ision, 2%+ectives, goals,  olicies, rocedures and rogrammes, have %een fully implemented to yield desired results and achievement of the targets fi)ed. -his audit also makes suggestions for futureimprovement on the 4anagerial olicies and rogrammes, on the strength of the findingsoutcomes derived from the previous Audit.  Objectives of the Human Resource Audit  -o review the performance of the Human Resource 7epartment and its relativeactivities in order to assess the effectiveness on the implementation of the various policies to realize the 2rganizational goals.  -o identify the gaps, lapses, irregularities, short5comings, in the implementationof the olicies, procedures, practices, directives, of the Human Resource 7epartment and to suggest remedial actions.  -o know the factors which are detrimental to the non5implementation or wrong implementation of the planned rogrammes and activities.  -o 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 7epartment.  -o evaluate the ersonnel staff and employees with reference to the erformance Appraisal Reports and suggest suita%le recommendations for improving theefficiency of the employees.  -o evaluate the +o% chart of the Human Resource 4anagers, ()ecutives, Administrative 2fficers, ()ecutive 2fficers, Recruitment 2fficers, whether theyhave implemented the directives and guidelines for effective 4anagement of the Human resources in their respective 7epartments.  Areas of Human Resource Audit  2%+ectives of the 7epartment in procuring ?ualified and suita%le employees,training and developing them.   Formulation of suita%le compensation plans and reward system   $mplementation of effective *ommunication.    erformance Appraisal    4aintenance of *ordial Relations   Resolve of *onflicts   Redressal of Grievances  >p5keeping 4orale -he performances of the Human Resource 4anagement may have to %e evaluated withreference to the aims and o%+ectives, olicies framed %y the 4anagement of the firm. (ach and every activity of the Human Resource 4anagement has to %e assessed %ymeans of collecting information from the Human Resource personnel involved in theaspect and after assessing the performance of the Human Resources 7epartment  personnel, an ela%orative Audit Report on Human Resource 4anagement and oliciesmay have to %e prepared and furnished. -he following are the aspects on which theassessment has to %e done to prepare the Human Resource Audit Report.0. ersonal olicy1.Human Resource lanning   3.Recruitment, election and lacement 6.Human Resource -raining 7evelopment 8.-ransfers and romotions9. erformance Appraisal Reports:.(mployee Relations ;.*ommunications, uggestion schemes, Areas of participation<.*ompensation, Rewards, !enefits and ervices 0=.elfare Activities undertaking %y the 4anagement.  Advantaes for Human Resource Audit  0.Assessment of the contri%ution of the Human Resource 7epartment to the2rganization.1.$mprovement o the rofessional image of the Human Resource 7epartment 3.(ncourages greater responsi%ility and professionalism among mem%ers of the Human Resource 7epartment and follow up action to check on its activities.6.2rganization of the ersonnel olicies, rogrammes, ractices systematicallyand to derive uniformity. 8.$dentification of the critical personal pro%lems.9.Reduces the costs of Human Resource 4anagement %y implementation of themore effective policies and rogrammes.:.@ecessity of the Human Resource 7epartments e)istence.;.$mprovement of the performance of the Human Resource personnel %yo%servation of the findings on the Human Resource Audit. <.4anagements will e)plore possi%ilities to review their HR olicies %ased on therecommendations of the Human Resource Audit and feasi%ility to modify theenvironmental factors affecting Human Resource 4anagement for effectiverealization of the 2rganizational goals and o%+ectives.0=.-he Human Resource Audit supports the Human Resource staff co5operation and co5ordination. OTHER AS!ECTS -he Human Resource Audit also covers the following aspects and suggests suita%lerecommendations/0.Rate of a%senteeism of the staff mem%ers 1.Rate of turn over 3.Ratios relating to costs6.4an5days Bworking daysC loss due to various reasons8.Grievances Handling 9.(mployee Relations:.Grievance, 7isputes, unishments, afety and Accidents;.Retirement !enefits of the staff mem%ers<.Accuracy and regularity of the staff mem%ers0=.(m%ezzlement of money and Rectification.   !ERIOD O AUDIT  @aturally any audit will %e done annually. -hough it is preferred to conduct  Human Resource Audit annually, %ut it is advisa%le to conduct audit once in three yearsor five years, keeping in view the fact that the realization of the 2rganizational goalsmay not %e identified within a year.

Case Study - A

Jul 23, 2017
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