Master of Business Administration- MBA Semester 3 MU0013 HR Audit (Book ID: B1231) Assignment Set- 1

Q1. What are the main objectives of Human Resource Planning? Answer:
Human resource planning is the term used to describe how companies ensure that their staff comprise of Right person for doing the job. It includes planning for staff retention, planning for candidate search, training and skills analysis and much more. It is process of acquiring and utilizing Human Resource in the organization. The main objective is to ensure that organization has right number of employees in the right place at the right time. The main objectives of Human Resource Planning are as follows: 1. To determine the number of employees to be employed: If organization has more number of employees than actually required, then the workforce will consist of underutilized staff. In contrast, if the opposite management is made, staff may be overstretched, making it hard or impossible to meet production or service deadlines at the quality level expected. You should ask following questions for planning right number of employees: (a) How can output be improved through your understanding about the interrelation between productivity, work organization and technological development? What does this mean for staff numbers? (b) What techniques can be used to establish workforce requirements? (c) Have more flexible work arrangements been considered? (d) How is the staff you need to be acquired? The principles can be applied to any exercise to define workforce requirements, whether it be a business start-up, a relocation, or the opening of new factory or office. 2. To retain highly skilled staff: In this competitive world it is very important for the organization to retain its skilled staff. Thus organizations should do following: (a) Monitor the extent of resignation (b) Discover the reasons for it (c) Establish what it is costing the organization (d) Compare loss rates with other similar organizations. Without understanding of above points, management may be unaware of how many good quality workers are being lost. This will cost the organization directly through the bill for separation, recruitment and induction, but also through a loss of long-term capability. 3. To manage an effective downsizing programme: This is a very common issue for managers but yet the most difficult one. A downsizing strategy reduces the workforce for improving profitability or reducing costs. For this you need to answer following question: How is the workforce to be cut painlessly, while at the same time protecting the long-term interests of the organization? This is difficult for every manager because of business necessities and at the same time employee anxieties. Such an analysis can be presented to senior managers so that the cost benefit of various methods of reduction can be assessed, and the time taken to meet targets established. Read Box 1.1 for understanding reasons behind downsizing programme adopted by organizations

But before downsizing effects of it should also be taken into consideration. It has mixed effects on firm performance that is there may be some short-term costs savings, but long-term profitability and valuation not strongly affected. Firms reputation as a good employer suffers. For example, Apple Computers reputation as good employer declined after several layoffs in 1990s. Downsizing forces re-thinking of Employment Strategy i.e. Lifelong employment policies may not be credible after a downsizing. For example, IBM abandoned lifelong policy after several layoffs in early 1990s. 4. To find out the procedure for recruiting the upcoming managers: Many senior managers are troubled by this issue. They have seen traditional career paths disappear. They have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a short-term skills shortage, it has not solved the longer term question of managerial supply: what sort, how many, and where will they come from? To address these questions you need to understand: (a) The present career system (including patterns of promotion and movement, of recruitment and wastage)

(b) The characteristics of those who currently occupy senior positions (c) The organizations future supply of talent. Now see the below mentioned figure which summarizes the various objectives of Human Resource Planning (HRP).

Q2. Write a short note on focus groups. Answer:

Focus groups are a qualitative data collection method effective in helping researchers learn the social norms of a community or subgroup, as well as the range of perspectives that exist within that community or subgroup. Focus groups are often used to determine what service or product a particular population wants or would like to have, such as in marketing studies. Because focus groups seek to illuminate group opinion, the method is especially well suited for socio behavioural research that will be used to develop and measure services that meet the needs of a given population. This module presents the fundamentals of using focus groups in applied qualitative research. It includes: Overview of Focus Groups Ethical Guidelines Logistics of Focus Groups How to Be an Effective Moderator How to Be an Effective Note taker Suggested Readings Case Study Samples Steps in Moderating a Focus Group Steps in Note taking for a Focus Group Focus Group Checklist Overview of Focus Groups What is a focus group? A focus group is a qualitative data collection method in which one or two researchers and several participants meet as a group to discuss a given research topic. These sessions are usually tape recorded and sometimes videotaped. One researcher (the moderator) leads the discussion by asking participants to respond to open-ended questions that is, questions that require an in depth response rather than a single phrase or simple yes or no answer. A second researcher (the note-taker) takes detailed notes on the discussion. A principal advantage of focus groups is that they yield a large amount of information over a relatively short period of time. They are also effective for accessing a broad range of views on a specific topic, as opposed to achieving group consensus. Focus groups are not the best method for acquiring information on highly personal or socially sensitive topics; one-on-one interviews are better-suited for such topics

Q3. Explain the audit of human resource function. Answer:

Audit of Human Resource Function Good starting point of audit process is to take some time and reflect on HR functions which need to be audited. Simply listing them is a good first step. For achieving organizational goals, it is very important to carry out various HR functions smoothly. In this step of audit process, we define the various functions which need to be audited.

Look at the following figure for various human resource functions.

In this step consider your areas of responsibility and traditional HR practices covered by the functions, you need to audit. In starting out, it is better to make more general statements and improve from year to year in those areas that you choose to raise the level of performance. For example as an audit manager, you may decide to audit any of following:

s, The main purpose is to study and analyze each one of the specific areas of HRM. The analysis should focus on the planned measures, the method of implementation, and the results obtained. In order to carry this out, the areas that need to be audited must be identified. A list of the indicators corresponding to the different areas of the HR function could contain some of the following: Description of the staff of the company The complete staff can be described by:

Job analysis The various indicators of Job analysis are as follows: of described posts

HR planning HR planning, as you have studied in unit 7, is an important area of preplanning includes the methods employed to plan personnel needs, the measures adopted to cover future personnel needs, and the temporary planning horizon. Recruiting and personnel selection Main indicators of this are as follows:

per job post

Training and development The training indicators are as follows:

the percentage of the HR budget dedicated to training

Development of professional careers These indicators focus on the vacancies covered internally. These indicators include: e a promotion.

Q4. What are the components of human resource development audit? Answer:
Components of Human Resource Development Audit For understanding the HRD Audit as conducted in different organizations, you should know well the different components of HRD Audit. The HRD audit is divided into three components: ent through Documentation

Organisation and administration of human resource In this you should consider following points: operating standards and internal controls followed in the business unit. tices. th the HR field.

Information management through documentation You must be aware that information is managed in the business unit through documentation of various records of the employees and factors concerned to them. So following are some important considerations in this:

ng in your organization : Hiring: Application, interviewing, and reference checks

on.

which various notices are posted.

Computerized Human Resource Information System In this you need to check the System requirements, features and capabilities. Consider the following:

s to access the HR information through the system.

t data

individuals who are able to update and change information controlled to enhance accuracy.

andard 10-field employee roster listing, including age, annual salary, and years of service, for 500 employee records.

Q5. What are the reasons for implementing the human resource scorecard? Answer:
Understanding the Reason for Implementing the Human Resource Scorecard In this era of tough competition it is very important for the firms to have more effective HR management systems. It is a challenge for managers to make HR a strategic asset. The HR scorecard is an instrument that enables them to improve the HR function in the organization. It helps to periodically assess effectiveness of HR functions in a wide range of areas, from recruiting to terminations, and including training and development, communications, and legislative compliance. But implementing effective audit systems for human resource is a difficult task and demands the existence of a unified framework to guide the HR managers. Sometimes firms under-invest in their people and at times invest in the wrong ways. Another difficulty is, managers cannot prepare the projected cash flows for considering the future productivity of present inputs as in case of financial assets but at the same time they are not willing to take the risk. So the best way is to prepare the Balanced Scorecard with sound measurement strategies which are able to link HR functions, activity and investment with the overall business strategy. The HR scorecard framework was specifically designed for following reasons:

It reinforces the distinction between HR doable and deliverables: The good audit system must clearly differentiate between the deliverables that influence strategy implementation and doable that do not. Policy implementation is not a deliverable until it has a positive effect on the HR architecture and creates the right employee behaviours that drive strategy implementation. An appropriate HR measurement system will encourage HR professionals to think both strategically as well as operationally. It helps in controlling cost control and value creation: It is the responsibility of HR to minimize the cost of the firm but at the same time, HR has to fulfil its strategic goal, which is to create value. The HR scorecard helps HR professionals balance the two and find the optimal solution. It allows HR professionals to drive out costs where appropriate, but at the same time it helps to create value for the firm by retaining good human resources. It measures leading indicators: There are drivers and outcomes in the HR value chain along with leading and lagging indicators in the overall balanced performance measurement system. It is thus important to monitor the alignment of the HR decisions and systems that drive the HR deliverables. Assessing this alignment provides feedback on HRs progress towards these deliverables and lays the foundation for effective HR strategies. It assesses HRs contribution to strategy implementation: The cumulative effect of the HR Scorecards deliverable measures provides the answer to the question regarding HRs contribution to firm performance. All measures have a credible and strategic rationale. Managers can use these measures as solutions to business problems. It lets HR managers to manage their strategic responsibilities: The scorecard motivates the HR managers to focus on exactly how their decisions affect the successful implementation of the firms strategy. This is due to the systemic nature of the scorecard that is it works on all the aspects. Therefore it provides a clear framework. It encourages flexibility and change: In this era of ever changing business environment, standardized patterns in any aspects do not work well. The changes are required even in the HR policies with the change in business environment. The basic nature of the scorecard with its causal emphasis and feedback loops helps fight against measurement systems getting too standardized. Every decision needs to be taken based on the past and future scenarios. One of the common problems of measurement systems is that managers tend to get skilled to obtain the right numbers once they get used to a particular measurement system. The HR scorecard provides the flexibility and change because it focuses on the firms strategy implementation, which constantly demands change.

Q6. Elaborate on the need for Human Resource Audit. Answer:

Need for Human Resource Audit Human Resource Audit is a systematic assessment of the strengths, limitations, and developmental needs of its existing human resources in the context of organizational performance. (Flamholtz,1987). Human Resource Audits give an account of the skills, abilities and limitation of its employees. The audit of non-managers are called skills inventory while the audit of managers are called management inventories. Basically, the audit is an inventory that catalogues each employees skills and abilities which enables the planners to have an understanding of the organisations work force. (William B. Werther, Jr. and Keith Davies). -driven.

diversification.

of choice.

-managed and prepared to meet potential challenges and opportunities.

For example, while many other PSUs stood losing on the profitability grounds, HR auditing at Bharat Heavy Electricals Limited (BHEL) ensured that the company remained a profit making heavy engineering public sector company, and thus maintained its reliability among the stakeholders.