The best practice process, principles and practice of conducting a comprehensive HRM Audit

1. HR AUDIT ROAD-MAP
CROWNE PLAZA HOTEL, ROSEBANK
5-6 SEPTEMBER 2013
CHARLES COTTER

2. 2-DAY TRAINING PROGRAMME
OVERVIEW
• INTRODUCTION
• THE FUNDAMENTALS OF HRM AUDITING
• THE SCOPE OF HRM AUDITING
• THE PROCESS OF HRM AUDITING

3. INTRODUCTION
• “How does a firm know if its human resource practices have
an impact on business results?
• “..most professional service firms and organizations complete
an extensive audit of their financial statements on an annual
basis, but the programmes involving “people”, such as
recruiting, training or pay-for-performance are seldom given
the same scrutiny.”
• “..the starting point for enterprises wishing to manage their
human capital successfully and seeking a labour competitive
advantage is activities of the HR department.”
• COMPLETE THE INTRODUCTORY LEARNING ACTIVITY

4. THE FUNDAMENTALS OF HRM
AUDITING
• DEFINING HRM AUDITING
• THE DRIVING FORCES OF HRM AUDITING
• THE PURPOSE AND OBJECTIVES OF HRM AUDITING
• THE BENEFITS OF HRM AUDITING
• POTENTIAL DRAWBACKS OF HRM AUDITS
• THE CRITICAL SUCCESS FACTORS OF HRM AUDITING
• THE PRINCIPLES OF EFFECTIVE HRM AUDITING

5. PURPOSES OF HRM AUDITING
•VALUE
•COMPLIANCE
•RISK

6. PURPOSES OF HRM AUDITING
•VALUE – STRATEGIC (ROI); OPERATIONAL
(EFFECTIVENESS); ADMINISTRATIVE
(EFFICIENCY) AND RESOURCE
OPTIMIZATION (ECONOMICAL)
•COMPLIANCE – LEGISLATIVE AND
ORGANIZATIONAL POLICY
•RISK – PEOPLE AND RELATED E.G. OHS

7. BENEFITS OF HRM AUDITING

8. THEPRINCIPLESOF EFFECTIVEHRM
AUDITING
• NEED FOR INDEPENDENCE;
• AUDIT ACTIVITIES SHOULD BE BUDGETED FOR PROPERLY;
• ACKNOWLEDGEMENT THAT THERE ARE MANY TYPES OF AUDITS;
• EACH TYPE OF AN HR AUDIT HAS ITS OWN PURPOSE AND OBJECTIVES;
• ESTABLISH TIMEFRAMES FOR EVERY PHASE/STEP OF THE AUDIT;
• TRAINING OF AUDITORS IS A MUST;
• SET STANDARDS FOR THE HR AUDITS;
• AGREE ON REPORTING TEMPLATE;
• AUDITORS SHOULD SIGN A CONFIDENTIALITY AGREEMENT; AND
• AUDITORS SHOULD AGREE BEFOREHAND ON COMMUNICATION STRATEGY.

9. LEARNING ACTIVITY 1
• COMPLETE THIS ACTIVITY (PAGES 21-22) IN SYNDICATE
GROUPS
COST-BENEFIT ANALYSIS OF HRM AUDITING
GAP ANALYSIS OF CURRENT HRM AUDITING PRACTICES
• NOMINATE A SPOKESPERSON TO PROVIDE A
SUMMATION OF YOUR SYNDICATE GROUP DISCUSSION

10. THE SCOPE OF HRM AUDITING
• THE HR ELEMENTS/FOCAL POINTS
WITHIN THE SCOPE OF HRM AUDITS
• TYPES OF AUDITS
• COMMON AREAS FOR HRM AUDITING

11. THE SCOPE OF HRM AUDITING

12. COMMON AREAS OF HRM AUDITING
• HRM AND RELATED
• HRD AND RELATED
• HR INFORMATION SYSTEMS
• THE SERVICE ROLE OF HR
• HR LEGISLATIVE COMPLIANCE
• THE STRATEGIC ROLE OF HR

13. HRM AUDIT MEASURES
• HR PLANNING
• RESOURCING – RECRUITMENT EFFICIENCY AND EFFECTIVENESS
• COMPENSATION AND BENEFITS MEASURES
• ORIENTATION/ON-BOARDING
• EMPLOYEE COUNSELING AND DISCIPLINARY COSTS
• LOST TIME COSTS
• EMPLOYEE TURNOVER RATES
• TRAINING AND DEVELOPMENT COSTS E.G. ROI
• ORGANIZATIONAL DEVELOPMENT AND CHANGE MANAGEMENT

14. SABPP NATIONAL HR STANDARDS
REFER TO ANNEXURE:
• Strategic HR Management
• Talent Management
• HR Risk Management
• Workforce Planning
• Learning & Development
• Performance Management
• Reward
• Employee Wellness
• Employment Relations Management
• Organization Development
• HR Service Delivery
• HR Technology
• HR Measurement

15. LEARNING ACTIVITY 2
• COMPLETE THIS ACTIVITY (PAGE 43) IN SYNDICATE
GROUPS
IDENTIFY THE SCOPE (FOCAL AREAS) OF A HRM AUDIT
DEVELOP HRM AUDIT MEASURES FOR EACH OF THESE
FOCAL AREAS
• NOMINATE A SPOKESPERSON TO PROVIDE A
SUMMATION OF YOUR SYNDICATE GROUP DISCUSSION

16. HRM AUDITING PROCESS
• PHASE 1: FOUNDATIONAL/INITIATION
• PHASE 2: ASSESSMENT
• PHASE 3: CONCLUDING AND REPORTING

17. OVERVIEW OF THE GENERIC HRM
AUDITING PROCESS
• DESIGN AND DEVELOP HR POLICIES, PROCEDURES
AND PRACTICES FOR YOUR ORGANIZATION;
• ASSESS CURRENT HR POLICIES, PROCEDURES AND
PRACTICES AGAINST SET CRITERIA;
• ANALYSE THE RESULTS FROM EVIDENCE; AND
• TAKE ACTION: TO CLOSE
GAPS, MAKE RECOMMENDATIONS/
SET IMPROVEMENT GOALS.

18. HRM AUDITING PROCESS
ILLUSTRATED

19. HRM AUDITING PROCESS
ILLUSTRATED

20. PHASE 1:
FOUNDATIONAL/INITIATION
• AUDIT SET-UP ACTIONS
• AUDIT PLANNING ACTIONS
Determine the purpose and objectives of the audit
Determine the scope of the audit
Determine the organizational components to be audited
Determine the auditing tool to be used
Determine costs and resources needed to perform the audit
Determine audit team governance

21. LEARNING ACTIVITY 3
• COMPLETE THIS ACTIVITY (PAGES 56-57) IN SYNDICATE
GROUPS
APPLY PHASE 1: FOUNDATIONAL/INITIATION OF THE 3-
STEP HRM AUDIT CYCLE
• NOMINATE A SPOKESPERSON TO PROVIDE A
SUMMATION OF YOUR SYNDICATE GROUP DISCUSSION

22. PHASE 2: ASSESSMENT
• GENERAL COMMENTS
• IDENTIFY KEY ORGANIZATIONAL METRICS - DETERMINE
EMPLOYMENT ISSUES ACCOUNTABILITY
• DEVELOPING A CHECKLIST
REFER TO THE ATTACHED ANNEXURE: HUMAN RESOURCES
BEST PRACTICE AUDIT AND NEEDS ASSESSMENT TOOL
• FORMULATING AUDITING METHODOLOGY AND TOOLS

23. LEARNING ACTIVITY 4
• COMPLETE THIS ACTIVITY (PAGES 60-61) IN SYNDICATE
GROUPS
APPLY PHASE 2: ASSESSMENT OF THE 3-STEP HRM
AUDIT CYCLE
• NOMINATE A SPOKESPERSON TO PROVIDE A
SUMMATION OF YOUR SYNDICATE GROUP DISCUSSION

24. PHASE 3: CONCLUDING AND
REPORTING
• REPORT PREPARATION
• REPORT PRESENTATION
QUANTIFY YOUR RESULTS - START WITH OUTCOMES
INCLUDE AN EXECUTIVE SUMMARY
IDENTIFY RISKS
IDENTIFY AND PRIORITIZE SOLUTIONS TO PROBLEMS IDENTIFY.
WHERE POSSIBLE, FRAME YOUR SOLUTIONS FROM A BOTTOM LINE
PERSPECTIVE, I.E., CALCULATE THE BENEFITS AND COSTS OF
PROPOSED SOLUTIONS
EVALUATE AND DISCUSS THE ORGANIZATIONAL, FINANCIAL AND
EMPLOYEE RELATIONS IMPACT OF ACTION OR INACTION
• DEVELOP A HR IMPROVEMENT PLAN

25. LEARNING ACTIVITY 5
• COMPLETE THIS ACTIVITY (PAGE 63) IN SYNDICATE
GROUPS
APPLY PHASE 3: CONCLUDING AND REPORTING OF THE
3-STEP HRM AUDIT CYCLE
• NOMINATE A SPOKESPERSON TO PROVIDE A
SUMMATION OF YOUR SYNDICATE GROUP DISCUSSION

26. CONCLUSION
• SUMMARY OF KEY LEARNING POINTS
• QUESTIONS
• FINALIZATION OF TRAINING ADMINISTRATION
• THANK YOU
• GOOD LUCK WITH YOUR ORGANIZATIONAL HRM AUDIT

27. CONTACTDETAILS
• CHARLES COTTER
• 084 562 9446
• charlescot@polka.co.za
• LINKED IN
• TWITTER: Charles_Cotter