HUMAN RESOURCE AUDIT

Presented by:C.P. Praveen Kumar

RangarajSampath Kumar

Satish SShyam Sunder Shiv Sharanu

Contents:

Introduction Objective Importance of HR Audit Company Profile Implementation Plan in HR Audit Scope of HR Audit Conclusion

Introduction

Human Resources (HR) Audit is a process of examining policies, procedures, documentation, systems, and practices with respect to an organization’s HR functions.

Objective

The Objective of the HR audit is to reveal the strengths and weaknesses in the nonprofit’s human resources system, and any issues needing resolution. The audit works best when the focus is on analyzing and improving the HR function in the organization.

Importance

It is most useful when an organization is ready to act on the findings, and to evolve its HR function to a level where its full potential to support the organization’s mission and objectives can be realized.

Company Profile NSLTextile Ltd:

NSL group has diversified into the textile sector over the past 6-7 years. There are two textile companies in the group by name Jayavenkatrama Industries Limited and DPM Textiles Ltd. There is an expansion under implementation with a capital outlay of Rs.1028 crores.

The Expansion project is spanning from Integrated Cotton farming, ginning & Pressing, Spinning, Weaving, Yarn Dyeing & Fabric Processing and Garmenting at Four locations (all within 60 Km radius from Guntur) in Prakasam, Guntur and Krishna districts of Andhra Pradesh. The Project is proposed to be implemented in 3 phases and expected to commence operations of Phase-1 by September 07, phase 2 by April 08 and final phase by mid 2009..

Company Profilecontd…

Upon the completion of the project the total capacities would go up to 2,40,000 spinning mills 60 Tons a day cotton spinning about 600 shuttle less looms, weaving with 1,00,000 mts a day and processing 2,00,000 lakh mts per day too and which could be expanded to 5,00,000 mts per day in the next five years. Garmenting 3,00,000 lakh million pieces per annum with 1000 machines.

The turnover of the textile division is expanded to be around 1,500 crores by the year 2010.The corporate office for the textile business shall be located at Hyderabad. The business proposes to develop garment business with own branding in the future on completion of the proposed manufacturing facilities. There are also plans to take the company public after 2010

Company Profilecontd…

Bombay Rayon Fashions Limited: # 201 ,Royal Manor apartment, Cunningham

Road,Bangalore - 560052 (Karnataka) India.

They are located across Bangalore in Karnataka, Navi Mumbai and Thane in Maharashtra and Silvassa; in Dadra and Nagar Haveli. Bombay Rayon Fashions Ltd was incorporated on May 21, 1992 as Mudra Fabrics Pvt Ltd.In September 30, 2004, the company got their present name, Bombay Rayon Fashions Ltd

Textiles Products - Manufacturer, Export / Import, Public. Ltd. Firm Since 1986

Company Profilecontd…

PRODUCT DEVELOPMENT:

Constantly developing concepts & experimenting with new fabric blends, textures, surface effects, embellishments, prints, embroidery & value addition to create exclusive designer collections.

TECHNOLOGY & INFRASTRUCTRUCTURE:

widest range of sophisticated weaving infrastructire including state-of-art warping & ultra-modern projectile, rapier & Air jet Looms.

Factors considered:

When planning an audit of your Human Resource function, here are a few things to consider:

Timing Scope The Audit Team Follow-up

Stages in Audit Process:

Phase 1: Audit set-up:Day 1: The set-up meeting is a half day meeting to

agree the scope, methods, resources, timing, and communication plan for the audit. Performance measures are agreed by line and HR for assessing the financial aspects of HR’s role.

Day 3: Finalise communication plan with

HR/line/unions.

Day 5: Finalise questionnaires for service

quality audit, and people management practices questionnaire.

Day 7: Finalise balanced scorecard measures to

be used in the audit. Day 10: Implement communication plan and

brief departmental management about their roles/requirements for staff time and

information.

Phase 2: Conduct audit: Day 12: Conduct combined surveys (3 days to complete)   

                    Day 15: Assemble and audit policies, procedure, systems

information   Day 20: Conduct focus

groups                                                  Day 30: Finalise quantitative and qualitative reports           

    Phase 3: Conduct feedback/strategy : Meeting  : Improving the HR system takes some time.

A workplan — with a timeline, accountability, and deliverables — should be created after the team reviews the completed audit and identifies areas where improvement is needed.

Once information is gathered, the audit team reviews each major section and notes disparities between paper (what we think or say we do) and practice (what we actually do, as revealed by the answers to the audit questions).

Comparison:

Parameters NSL Textiles Bombay Rayon Ltd.

Audit period Annually Every 9-12 Months

No Of Employees 2000-3000 >5000

Audit Team Internal/Consultant Auditing Team

Consultant Appointed

Questionnaire:

What is human resource audit all about?

The Human Resources (HR) Audit is a

process of examining policies, procedures, documentation, systems, and practices with respect to an organizations HR functions.

How can HR Audit be helpful to an organisation?

Audits can be limited in scope focusing on specific areas that may need attention such as hiring practices, compensation and/or benefits, or they may be more extensive looking at the HR function as a whole.  

Why HR Audit is conducted? The purpose of conducting a human

resource audit is to support the overall business plan of the organization.  

How and when will the HR audit be conducted?

The Human Resource audits should be done every twelve to eighteen months and should coincide with the organizations business planning cycle.  

Is there legal obligations for HR audit?

No. There are no such legal obligations for HR audit.

Benefits of HR Audit:

Getting the top management to think in terms of strategic and long-term business plans

Clarifying the role of the HRD department and line managers in HRD

Streamlining of other management practices

Better recruitment policies and more professional staff

Improvements in HRD systems

Scope of HR Audit:

Employees have a significant impact on the bottom line, so an audit of the HR function would be favorable. Audits can be limited in scope focusing on specific areas that may need attention such as hiring practices, compensation and/or benefits, or they may be more extensive looking at the HR function as a whole.  

Suggestions:

Audit should be conducted once in every 12-18 months.

Audit team should consist of internal and external auditors.

Priority must be given to all the functions of HR Department accordingly.

HR Audit must focus on major areas like Planning, Staffing & Development, Organizing, Commitment, Administration and Research & Development.

Conclusion:

The purpose of conducting a human resource audit is to support the overall business plan of the organization.  

The process has three parts: 1. To identify and prioritize management

issues relating to human resources; 2. Identify gaps between the current practices

and policies with that of the business objective; and 3. To identify any legal difference and potential

exposure.

Thank

You….