Lecture- 12

HRD IE Audit
SZABIST- ISLAMABAD
By: Muhammad Ahmed Khan

Contents

Three Cs of HRD
HR audit An overview
HRD audit as a diagnostic tool
Components of HRD audit

Three Cs
Three Cs of HRD
Competence,
Commitment
Culture
A continuous process to ensure Organizational or
institutional growth.

HRD audit - An overview

Many small and medium size businesses
face carry out their HR function with few or
no dedicated trained resources at all.
Often, these duties are spread among
several people within the organization who
have little hands on experience.
HRD effectiveness audit amongst other
address such issues as a diagnostic tool.
HRD audit helps evaluate past
performance, assess present
circumstances and determine future
remedial action to keep the people
mission on target.

What is HRD Audit?

A Comprehensive Evaluation of
Human Resource Development
Strategies, Systems and Practices,
Structures and Competencies
Styles and Culture
And their appropriateness to achieve the
short and long term business goals of the
organization

A diagnostic tool to find out 1/2

1. The extent to which the 3 Cs are shaping up in work place.
2. How various HR systems and processes are contributing or
hindering continuous competence, commitment and
culture building.
3. The actual competence levels of the HR staff.
4. The learning orientation of all employees
5. Facilitating or hindering effect of top management styles on
the three Cs of employees

A diagnostic tool to find out 2/2

6. Credibility of HR and alternative mechanisms of
achieving HR goals (the 3 Cs),
7. The level of HR culture
8. How well various HR systems, processes and
HR professionals are contributing to the
institutional effectiveness.
9. How effectively intellectual capital investment is
being carried out in terms of achieving the short
and long term goals.

Reasons for HRD audit 1/2

a. For expanding, diversifying and entering
into a fast growth phase.
b. For promoting professionalism and
professional management.
c. Bench-marking for improving HRD
practices.
d. Growth and diversification
e. Dissatisfaction with any component
f. Change of leadership

Reasons for HRD audit 2/2

HRD audit starts with an understanding of the
vision and future business plans and corporate
strategies.
HRD audit can be carried out even in
organizations that do not have well-thought-out
future plans and strategies.
It is much more effective as a tool when the
organization already has such long-term plans.

Components of HRD audit 1/6

HRD Audit seeks answers to questions like:

1. Where does the firm want to be ten years, three
years and one year from now?
2. What is current skill level of the employees in relation
to various roles and role requirements?
3. Which HRD sub-systems are available to help the
organization build a competency base for the present,
immediate future as well as for achieving' long-term
goals?
4. What is current effectiveness level of these systems
in developing employees and ensuring that human
competencies are adequately available in the
company?
5. Is companys present HRD structure suitable for its

needs?

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Components of HRD audit 2/6

1. Where does the company want to be ten years from
now, three years from now and one year from now?

Answers to be provided by top-level management.

Based on the answers and by reviewing long-term plan
documents, the auditors finalize the subsequent audit
strategies and methodology.

HR Audit identifies:

Nature of core competencies the organization need to develop to

achieve its long-term five- to ten-year plans.
Skills required to be developed by the company at various levels. i.e.
workmen, supervisory, junior, middle and top-management levels, in
respect of functions like (finance, production, marketing, etc.

Listing these competencies help to assess the existing skills and the
gap in order to achieve the long-term business goals and short-term
results of the company.
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Components of HRD audit 3/6

2 . What is the current skill base of employees in the
company in relation to various roles & requirements?
Skill assessment is carried out through examination of:
Qualifications of employees,
Job descriptions,
Training programmes attended,

Random staff interview are conducted to identify the

skill gaps in the organization.
Training needs and performance appraisal forms
provide further insight.

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Components of HRD audit 4/6

3. Which HRD sub-systems are available to help the
organization build a competency base for the present,
immediate future as well as for achieving' long-term
goals?
Here the auditor attempts to identify various HRD sub-systems
that are available.

Desired objectives to ensure:

1.
2.
3.
4.

Availability,
Utilization
Development of direct skills
And other competencies.

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Components of HRD audit 6a/6

5. Is companys present HRD structure suitable for its needs?
Here, the auditors examine whether the HRD structure can handle
the pressing and future HRD needs of the company.
This examination assesses companys HRD staff in terms of:

Their professional preparation,

Attitudes,
Their perceptions by the line managers,
Their values,
Developmental needs,

In addition to examining the full-time staff, the HRD structure is

also assessed in terms of use of special task forces and other
mechanisms.

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Components of HRD audit 5a/6

4. What is current effectiveness level of these sub- systems
in developing employees and ensuring that human
competencies are adequately available?
This is achieved by assessing effectiveness of each system.
For example, the effectiveness of performance appraisal
system is assessed by discussing with the employees individually and in groups about the efficacy of the system.
Auditor go through the appraisal form and linkages between
appraisal and training,
Questionnaire surveys are conducted to assess how the
components of training, leaning on job and other appraisals are
being utilized.

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Components of HRD audit 5b/6contd

4. What is current effectiveness level of these sub- systems in developing
employees and ensuring that human competencies are adequately
available?

If deemed necessary; special interactive sessions are conducted

to assess the effectiveness of these sub-systems.

To ascertain views to on induction, training methodology:

Auditor will ensure to meet those who have been through the
induction training programme recently :
And /or those who are in process of being inducted into the
company.

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Components of HRD audit 6b/6

5. Is companys present HRD structure suitable for its needs?
..Contd

HRD audit also examines the linkages between HRD and other
systems i.e.:
Total quality management,
Personnel policies,
Strategic planning, etc.
Based on the above evaluation , suggestions are given about:
Future HRD strategies .
Structure required for developing new competencies and the
systems that need to be strengthened.
Compatibility of management style and culture with HRD
processes in the company.

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To be continued

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