HR AUDIT

Purpose:

To evaluate about the state of HR functions, policies, procedures and legal compliance to
determine the overall effectiveness of people management practices in the organization.

Scope:

1. Identify current procedure and practice along with compliance approach

2. Analyzing cost and effectiveness of cost and resource allocation
3. Reviewing employees satisfaction and expectation

Systems Audit:
Existence of all required forms, records, documents, files
Operations Audit:
The use of the forms, etc. in operations – their completeness, accuracy, timeliness,
punctuality, accessibility, access levels and validation.
Climates Audit:
Study real practice of employees in the process of documents turnover and their attitude
towards functionality of the documentation process against HR
department’s own perceptions.

Areas of Audit:
Strategy

 Is the HR strategy vertical aligned to the business strategy?

 Are HR KPIs relevant to the business strategy?
 Is everyone within the department aware of the HR strategy?
Human Resource Planning
 How many employees are currently on staff?
 How many positions are open?
 How many employees are:
Regular
Temporary
Full Time
Part Time
 What is the minimum number of hours an employee has to work to be considered
full-time? Is their Flexi hour policy?
 Is there a probationary period and if so, how long is the probationary period?
  Are there currently up-to-date job descriptions for all employees? If not, which ones
don’t have descriptions?
 Are independent contractors used? If so, how many are being used? And, for what
functions?
Recruitment

 What are the procedures for hiring in your organization?

 What are some of your organization’s future needs for personnel?
 What recruitment sources are used?
 If your organization has several divisions/locations are employees allowed to transfer? If
so, is relocation is involved, will the company provide assistance?
 Who does the preliminary screening of candidates?
 Who selects candidates for interviews?
 Is training provided for those who conduct interviews?
 Are new employees references checked?
 Are staff turnover rates monitored?
 Are all applicants required to fill out and sign an application form?
 Is the final offer is in writing, who prepares and reviews the letter?
 Vendors management
Training & Development

 Who is responsible for new employee orientation?

 What are the elements of the new employee orientation program?
 Where and to whom do new employees go when they have questions about your
organization or their jobs?
 Is there a formal training program for employees and managers? If so, please describe it.
 What training and development initiatives have occurred in your organization?
 How are managers and supervisors trained and prepared for their roles?
 What is the average length of time an employee stays with your organization? Does this
vary by position type?
 How much does your organization spend annually (in total and per employee) on
employee training and development? Does this vary by position type?
 Budget streamlining
Employee Relations

 Do new employees receive appointment of employment and an employee handbook?

 Do review meetings take place with new employees and are these documented?
 What have the Company’s absence rates been during the audit period?
 Are managers complying with the Company’s absence management system?
 Do exit interviews take place?
  Are employees informed about their benefits?
 Are the employee benefits seen as relevant to employees?
 Is there a system for performance appraisal of all employees?
 Are managers conducting appraisals for their employees?
 Does the system check for effectiveness of the evaluation?
 How many disciplinary hearings have there been in audit period and are there any
patterns developing?
 How many grievances have been raised in audit period and are there any patterns
developing?
Performance Management and Evaluation
 Describe the past and current performance appraisal system in your organization.
 What type of process is used (360o–supervisor only–peer evaluation–outcome)?
 What is the role of the supervisor/manager in performance appraisal?
 What is the focus of performance management in your organization?
 How often and consistently is the process used?
 In the absence of a state policy/procedure, do supervisors communicate the problem to
the employee, coach the employee on the desired change and explain the consequences
if there is not improvement?
 Are current employees given appropriate consideration for promotion or lateral position
changes?
 Are appraisals well documented?
Compensation & Benefits

 Is there a formal compensation program?

 How are wages set? Somewhat against market
 Are formal salary ranges set?
 Are salaries assigned to jobs reflecting the organizational hierarchy as well is industry?
 Are pay levels monitored and reviewed?
 How frequently are jobs re-evaluated or updated?
 Are any salary surveys used? If so, which ones?
 Are pay ranges revised as a result of these surveys? How frequently?
 Are merit increases given, and if so, are they integrated with performance evaluation?
 Is there a bonus system, and if so how is it structured?
 How is the compensation program and total compensation package communicated to
employees?
 Are benefits given as per grades?
Health and Welfare Benefits

 Describe the health insurance program provided by your organization.

  Are dependents covered, and if so, in part or in full?
 What are the eligibility requirements for health insurance and other benefits?
 Which of the following health and wellness benefits are offered, and what are the limits
and requirements for coverage?
o Dental
o Vision
o Disability
o Accidental Insurance
o Life Insurance
o Other wellness benefits
o Flex benefit plan
o Other benefits
Leave of Absence Administration
 Do you offer leaves of absence? Describe conditions for the leave.
 Do you treat maternity leave as you would any other leave?
 Have you been consistent in granting leaves of absence (including paid vs. unpaid time
off, maximum time allowed, opportunity to return to same or like position)?
 Which holidays are paid?
 Are leave records maintained?
Legal Issues / Personnel Policies
 What HR policies are currently being used?
 When was the last time these policies were reviewed and updated?
 Is there disparity between policies and practices?
 Are proper compliances followed?
 Is Sexual harassment training regularly provided?
 How are employee grievances dealt with?
 Are new policies made and on what grounds?
Record keeping

 Are personal files present for each employee?

 Does the department comply with its obligations under the Data Protection Act?
 Are documents regarding employees kept for their required duration?

Safety and Health

 Are employees aware of the procedure for reporting all work-related injuries?
 Are facilities and operations reviewed periodically to assess that a healthy and safe work
environment has been maintained?
  Are hazardous chemicals used or are employees exposed to hazardous chemicals on a
work-site? If so, is there employee training regarding potential exposure and safe
practices?

Company property
 Is company property issued to employees?
 What documentation is utilized when providing equipment?
 Are employees advised of their responsibilities to return property paper / power of
attorney/ equipment and to keep in good use?
Other
 Are there regular employee surveys conducted to obtain employee feedback?
 Are there regular team meetings conducted in each operational department?
 Are there company-wide meetings?
 What employee safety measures are in place for each facility?
 Does each manager have a list of their employee’s home numbers and contact
information?
 Is the emergency contact information for each employee up to date and refreshed each
year?
 What attorneys are used for the company and in what capacity?