CGM HR

GM (COMM)

GM (MAINT)
GM (TECHN)
GM (TECH)

GM (OPRN)

GM FIN
EXECT
DIR
THAL

EXECT
DIR HR

EXECT
DIR P &
PD

CGM (CF & IT )

EXECT
DIR
TROMBA
GEN MGR

EXECT DIR
FIN

EXECT DIR
(F & SO)

EXEC DIR MKT

CHAIRMAN AND MANAGING DIRECTOR

DIRECTOR
MARKETING

DIRECTOR
TECHNICAL

DIRCETOR
FINANCE

CHIEF
VIGILANCE
OFFR

COMPANY
SECRETARY

CC & CSR

GM (OPRN)

GENERAL MGR NITROGEN

GENERAL MGR COMM

GENERAL MGR R&D

CH GEN MGR TECH TR

CHIEF GEN MGR PROJECT

CHIEF GEN MGR COMPLEX & ACIDS

GEN MGR CO-ORD.

GEN MGR ES,SGP,CM
CHIEF GEN MGR CORP
GEN MGR IT

GEN MGR THAL

GEN MGR HR CORP

EXEC DIR TR
CHIEF GEN MGR THAL
ADVISOR PRJ.

GENERAL MGR FIN

GEN MGR FIN

CHIEF GEN MGR FIN

DIRCETO
R
FINANCE

GEN MGR HR

GEN MGR IPD

GEN MGR FERT,MKT

EXEC DIR MKT

DIRECTOR
MARKETIN
GGG

DIRECTO
R
TECHNIC

EXCT DIR
ECTOR
HR

EXCT DIR
IA

CHIEF OFFR
VIGILANCE

CO
SECRETA
RY

CHAIRMAN AND MANAGING

DIRECTOR

CHAIRMAN AND MANAGING DIRECTOR

DIRECTOR
MARKETING

DIRECTOR
TECHNICAL

DIRCETOR
FINANCE

CHIEF
VIGILANCE
OFFR

COMPANY
SECRETARY

CC & CSR

EXEC DIR MKT

EXECT DIR
FIN

EXECT
DIR
THAL

EXECT
DIR HR

EXECT
DIR P &
PD

CGM (CF & IT )

GEN MGR

GM FIN
CGM HR

GM (OPRN)

EXECT
DIR
TROMBA

EXECT DIR
(F & SO)

GM (OPRN)
GM (TECH)

GM (TECHN)
GM (MAINT)
GM (COMM)

DIRECTOR
MARKETIN
GGG

DEFINITION:
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)
NEED FOR H.R. AUDIT:
Top Management saw solutions to their problems, issues and
challenges in HRD to face business competition and to achieve

organizational goals.
PURPOSE OF H.R. AUDIT:
1. To examine and pinpoint strength and weaknesses related
to H.R. areas and Skills and Competencies to enable an organization to achieve its long-term and
short-term goals.
2. To increase the effectiveness of the design and implementation of human resource policies,
planning and programs.
3. To help human resource planners develop and update employment and program plans.
SCOPE OF HUMAN RESOURCE AUDIT
Whenever the H.R. Audit it taken up, the scope is decided. Audit need not be exhaustive, but should
be focused on particular function of H.R.M. such as Training and Development, Performance
Appraisal, Compensation, etc.. However, the objective and approach of H.R. Audit, more or less,
remains the same, regardless of scope.
APPROACH TO H.R. AUDIT
1. Self directed surveys.
2. Task Forces within the organisation.
3. Out side Consultants.
AUDITING PROCESS: STEPS IN H.R. AUDIT
Auditing process varies from organizations to organizations.
Generally involves following STEPS:
STEP ONE: Briefing and Orientation:
Key Staff Members meet:
i. To discuss particular issues considered to be important.
ii. To chart out audit procedures, and
iii. To develop plans and program of audit.
STEP TWO: Scanning material information:
Scrutiny of all available information pertaining
to personnel, personnel handbooks and manuals,
guides, appraisal forms, computer capabilities and
any other related information.
STEP THREE: Surveying employees:
a. Interview with key managers, functional executives,
Top functionaries in the organisation and employees
Representatives, if necessary.
b. The purpose is to pinpoint issues of concern,
Present strengths, anticipated needs and managerial
views on human resources.

STEP FOUR: Conducting interviews:

I. What questions to be asked, are developed during
scanning of information.
II. It is better for H.R. Audit, if clarity about the key
factors of H.R.M. selected for audit and the related
questions that need to be examined.
STEP FIVE: Synthesising:

The data gathered is synthesized to present the

a. Current Situation.
b. Priorities.
c. Staff pattern, and
d. Issues identified.
STEP SIX; Reporting:
1. The results of the audit are discussed with
Managers and Staff Specialists, in several
rounds.
2. Important issues are identified for
inclusion in the formal Report.
H.R. AUDIT
TOPICS (AREAS) FOR INTERVIEW QUESTIONNAIRES
AND RELATED ASPECTS

1. INFORMATION
COVERAGE
SOURCE
ADEQUACY
GAPS
2. FORECASTING
METHODOLOGY
RELIABILITY
TESTABILITY
BUDGETING
TIME ORIENTATION
TECHNOLOGY PERSPECTIVE
3. TRAINING AND DEVELOPMENT
NEED ASSESSMENT
SELECTION CRITERIA
LEVELS COVERED AND FREQUENCY
INTERNAL VS EXTERNAL TRAINING
QUALITY CONSCIOUSNESS
CHANGING NEEDS
CLIMATE FOR SELF-DEVELOPMENT
4. PERFORMANCE APPRAISAL
VALIDITY OF APPRAISAL PROCESS
FITNESS
BENEFITS AND/OR
DRAW BACKS/PROBLEMS
KNOW-HOW OF APPRAISING
CLEAR OBJECTIVES
UNIFORMITY IN PROCESS

 UNDERLYING BENCHMARKS
CONSISTENCY IN RATINGS
LINKAGES WITH PAY
FEEDBACK TO EMPLOYEES
CHANGING NEEDS
5. MANAGEMENT SUCCESSION PLANNING
POLICY FORMULATION
IDENTIFYING KEY POSITIONS
AVAILABILITY OF SUCCESSORS
MATCHING FUTURE NEEDS
RESPONSIBILITY FOR GROOMING
AND DEVELOPING
HANDLING NON/POOR PERFORMERS
6. COMPENSATION
APPROPRIATENESS OF POLICIES
COMPANY PHILOSOPHY
ADEQUACY OF REWARDS
NATURE OF JOB DESCRIPTIONS
FLEXIBILITY IN JOB EVALUATION SYSTEMS
CONTROL OVER COSTS
RATIONALE OF REWARD SYSTEM
OPPORTUNITIES FOR IMPROVEMENT

7. AFFIRMTIVE ACTION
EFFICIENCY OF ACTION PROGRAMMES
LESSONS FOR FUTURE
8. SPECIAL ASSIGNMEN
(OTHER H. R. FUNCTIONS)

CLARITY
COMMENTS
ACTIVITIES JURISDICTIO

9. NEED INTER-RELATIONSHIPS
UNIQUENESS
DISTINCTIVENESS
PRESENCE AND AWARENESS OF ABOUTCOMPANYS H. R. POLICY
CLARITY ON OBJECTIVES OF
H.R. AUDIT
FUTURE OUTLOOK ON PHILOSOPHY
* CAPABILITIES ON IMPLEMENTATION

10. THE STAFF FUNCTION

(THE H.R. STAFF)
EXPECTATION FROM HUMAN RESOURCE STAFF
DEGREE OF SATISFACTION
ADEQUACY
ATTIDUDE AND APPROACH
CAPABILITY AND POTENTIAL
SUGGESTION FOR CHANGE

*****

attribution http://www.citehr.com/16449-hr-audit-notes-change-management.html#ixzz311ZAsQdR

Regular human resources audits are effective, proactive measures that ensure an
organization's compliance with federal and state regulations as well as organizational
policy concerning employment actions and HR strategic management. An audit can
be performed on a single HR function, such as an examination of compensation
practices, or it can focus on several areas of HR at a time. HR audits also can be
useful in adjusting workplace policies when necessary or modifying HR practices to
be consistent with corporate headquarters' HR processes.
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Step 1

Schedule a meeting with the HR audit team. Team members might include a
representative from every HR discipline, such as compensation and benefits,
recruitment and selection, training and development, employee relations and safety
and risk management. Assign specialists their duties for conducting portions of the
HR audit within their areas of expertise.
Step 2

Establish the time within which to complete the full audit, as well as individual areas
of the audit for each HR area. Identify areas of the audit that are contingent upon the
completion of another area. For example, if the employee relations portion of the
audit needs information from completed portions of the compensation and benefits
portion, establish the order in which specific areas must be completed.
Step 3

Obtain HR process documents and standard operating procedures, if they exist. Any
documentation related to how HR staff process employee requests, applicant
information, medical or health information and payroll matters. If the organization
outsources any of its HR functions, gather information from outsource providers and
determine consistency with in-house functions. In addition, for outsourced functions,

obtain information from the HR staff member who oversees the outsourced functions
and monitors the providers for quality assurance.
Step 4

Review each area's process. For example, look at the way employee relations
specialists manage intake of employee complaints, the investigation process,
interaction with legal counsel, documenting witness statements and sealing
confidential files related to employee complaints. Another example is a review of
compensation practices. Aside from ensuring the company is in compliance with
record-keeping provisions of the Fair Labor Standards Act, determine whether the
company is adhering to its compensation structure. This includes assigning wage
increases according to the terms and conditions of union contracts, performance
appraisal processes or merit increase policies.
Step 5

Examine the workplace for postings required by federal and state law. For example,
look for current minimum wage posters required by the U.S. Department of Labor,
Wage and Hour Division. In addition, ensure there is an adequate number of posters
that inform employees of their workplace rights under Title VII of the Civil Rights Act
of 1964, the Americans with Disabilities Act and the Family Medical Leave Act. If the
organization is a government contractor, it may have additional obligations to post
notices concerning its obligations under Executive Order 11246 for mandatory
affirmative action compliance.
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References

Minnesota Department of Trade and Economic Development: Why and How to

Conduct a Human Resources Audit in Minnesota

U.S. Equal Employment Opportunity Commission: EEOC Poster Request Form

U.S. Department of Labor: Fair Labor Standards Act -- Minimum Wage Poster

U.S. Department of Labor: Compliance Assistance -- Executive Order 11246

Nonprofit HR Solutions: HR Audit -- 101

About the Author

Ruth Mayhew began writing in 1985. Her work appears in "The Multi-Generational
Workforce in the Health Care Industry" and "Human Resources Managers Appraisal
Schemes." Mayhew earned senior professional human resources certification from
the Human Resources Certification Institute and holds a Master of Arts in sociology
from the University of Missouri-Kansas City.
**********************************************************************************
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audit
An audit is a systematic and documented investigation to determine if prescribed processes
are functioning as intended. We audit to find out whether processes are working properly,
where they are not working properly, and how to address identified gaps. No matter how
diligent the staff is in following procedures, there are nearly always revelations indicating
needed corrections and opportunities for improvement. Whether an audit is conducted as part
of a due diligence process, to evaluate management system effectiveness, or to assess routine
EH&S compliance, the audit process allows us to reset the system back to where it should be.

Types of Audit Surprises

Since there is a high likelihood that audits will reveal unexpected problems, it is important to
understand how to handle those surprises. Every situation is different in the specifics,

however, negative findings generally occur in a few primary categories: legal violations,
procedural discrepancies or corporate system violations. Legal violations will, of course,
require immediate attention. In the case of a safety issue, it may be critical to isolate the
problem immediately to reduce the possibility of injury. If there is an environmental
compliance issue, it may be necessary to mitigate the situation. In situations of lesser urgency,
it may be sufficient to simply stop the situation from continuing while an investigation is
conducted to identify the root cause of the problem.
When investigating a potential legal issue, it is important to refrain from jumping to
conclusions. A careful analysis is needed to determine if an actual violation exists. If the
problem is a system or procedural violation, rather than a legal one, it still may be important
to act quickly to prevent a financial loss. No matter which type of issue exists, it is critical
that the situation be investigated thoroughly, the root causes discovered, and appropriate
corrective actions taken. Below are a few real-world situations for illustration.
1. During a regulatory compliance audit at a chemical and components parts
manufacturer, the auditor discovered that the company's wastewater
discharge from a large parts washer associated with their painting
operation was being sent to a municipal water treatment system. The
company believed they were obeying the law because they were
operating within the limits of their state- issued NPDES permit. They had
made an earlier decision to stop discharging to the local creek and route
their discharge directly to the city system instead. In making this change
they failed to consider city sewer ordinances which had tighter limits than
their permit. When the audit revealed the problem, the initial concern was
that a violation of the city ordinance existed. A careful investigation
revealed that although their system would have allowed for a legal
violation, their records revealed that no actual violation had occurred. The
audit found the problem before any violation had occurred and gave them
the opportunity to take appropriate corrective action without any legal
difficulties.
2. In a similar audit, a different company, that has an excellent reputation for
safety, redesigned a room to include explosion proof electrical fixtures for
the storage of highly flammable solvents. The audit revealed an improper
repair of one electrical fixture in the room. The repair compromised the
explosion proof design and created a major fire risk. Immediate action was
needed to assure the safety of all involved. The audit made it possible to
eliminate a serious fire hazard.
3. At a telecommunications company that designed its products and new
facility without asbestos, an auditor was assured that there was no
asbestos onsite. Never-theless, the auditor discovered asbestos in the
hazardous waste shed. The subsequent investigation revealed that the
company's installers were cleaning up the waste they created at their
clients' sites and were returning it to the company shed. This included the
dust created from drilling through floor tile that contained asbestos. The
environmental manager was previously unaware of the practice. The audit
revealed a situation that required correction due to both safety and
environmental concerns.

Identifying the Root Cause

All three of these situations required some form of corrective action but the causes varied
considerably. A root cause analysis is an effective way to determine the true reasons for the
problem, leading to corrective actions that are permanent rather than quick fixes. A simple
technique for performing a root cause analysis is known as the "Five Why" approach. Don't
just ask why a problem occurred but rather ask "Why?" five times consecutively. For
example, consider the scenario above at the chemical company where the city sewer
ordinance was not considered. The "Five Why" approach might look like the following:
Problem Statement- The wastewater was being sent to the POTW without considering the
limits of the city sewer ordinance.
WHY #1 - We thought the State NPDES Permit covered the waste water discharges.
WHY #2 - We were unaware of the City Sewer Ordinance.
WHY #3 - We failed to research the legal implications when we made a change to the plant's
handling of wastewater.
WHY #4 - We did not inform the plant environmental manager of the plant change.
WHY #5 - The plant environmental manager is not routinely copied on plant infrastructure
changes.
If the staff stopped at WHY #1, they would have corrected the potential problem of a
violation of the city ordinance but not addressed the root cause. As a result, there could have
been a reoccurrence of the issue when a different plant infrastructure change occurred. The
root problem was not the legal one but rather that the environmental manager was not being
informed of changes that could affect plant compliance. The "Five Why" process revealed the
root cause that will allow them to address the immediate problem and prevent the problem
from reoccurring in the future.
Of course, simple problems may not always need to have five levels of asking "Why?" and
complex issues may require deeper investigation. The concept, however, is to repetitively ask
"Why?" until the root cause is identified.
The strength of the "Five Why" approach is its simplicity. This encourages its use in a wide
variety of situations. On the other hand, more complicated situations may require a more indepth evaluation. A modified version of the "Five Why" approach is usually needed when
multiple root causes are found. In these cases it is usually best to break down each root cause
separately by dividing them into categories such as:

People - training, human behavior, ergonomics, communications

Equipment - infrastructure, maintenance, capital expenditures

Environment - physical conditions, culture, weather

Materials - industrial hygiene, consistency, handling, transportation

Methods - policies, procedures, systems

Each category may contain a separate root cause to a problem. A Cause and Effect Diagram
(Fishbone diagram) is often an excellent tool for analyzing the various root causes. In the
simple example above there are indications of root causes in the training, communications,
infrastructure and systems categories. The company had failed to train the Facility Engineer

about the compliance consequences of rerouting wastewater discharges. There were

communications issues among the Operations Management, Facilities department and the
EH&S department. The infrastructure may have been in question due to improper labeling of
the facility piping or out-of-date facility drawings. Finally the system of making facility
changes without considering the EH&S implications indicates a weakness in the maintenance
& capital improvements procedures. Each category's root cause could involve a different
aspect of the problem's resolution.

It may be of value to next consider doing an FMEA (Failure Mode Effects Analysis)
to explore all the possible means of the process failing and the methods of
prevention. In complex cases, it may be desirable to use Scatter Diagrams and
Correlation Analysis to determine trends and to find the central reality in the
mass of seemingly inconsistent data. Statistical Process Control techniques may
also be used to analyze and monitor processes when multiple root causes are
having a variable effect on the outcome. In evaluating all of this, it is important
to remember "Occam's Razor" which states that when multiple competing
theories exist it is usually the simplest one that is correct. In other words, we
should start with the simple and work toward the complex to ensure the potential
benefit is greater than the risk.
Although surprises are common during audits, handling them with a thorough
examination of the facts, a careful analysis of the requirements, and a diligent
focus on root causes can lead to appropriate corrective actions. Of course, there
was also an audit of a plastics manufacturer that "unearthed" a four foot snake
living in a storage area. Now that was a surprise of a different nature!