A Business Encyclopedia

HR Audit

Definition: The HR Audit is the process of evaluating the performance of Human Resource Department and its activities undertaken, and the policies followed towards the accomplishment of organizational goals.

The HR Audit is conducted to identify the lapses, shortcomings, gaps in the implementation of HR functions and suggesting the remedial actions, if any.

HR Audit-1

HR audit can be partial or comprehensive. In the former type of Audit, few areas of HR are monitored, whereas in the latter a complete Human Resource check-up is carried out such as admin, employee details, handbook, performance management, training programmes, termination procedures, etc.

Approaches to HR Audit


Following are the approaches that can be adopted by an auditor to evaluate the performance of the HR department:

  1. Comparative: In this approach, the auditor identifies any company usually the competitor’s company as a model. Then the results of the organization are compared with that of the model company.
  2. Outside Authority: The auditor uses the standard set as a benchmark by the outside consultant and then compares the organization’s performance with that.
  3. Statistical: Under this approach, the auditor develops the statistical measures of performance for the existing organization’s information, such as turnover rates, absenteeism.
  4. Compliance: Here the auditor checks the past actions of the company to ensure that those activities comply with the legal requirements and is in line with the company’s policy and procedures.
  5. Management by Objective: under this approach, the auditors check the performance of HR personnel against the goals set by the top management.

It is recommended to have an HR audit once in a year so that, the performance of the HR department in terms of its recruitment and selection process, compensation plan, grading system, layoff schemes and other HR functions can be checked. By doing so, it can be ensured that Human resource practices are carried out at its best and is reducing the organization’s liability as a whole.

Leave a Reply

Your email address will not be published. Required fields are marked *


Related pages

hendry fayoljob instruction training methodoligopoly meansmacro environmental factors in marketingdelphi technique in hrdrawee bank meaningforward exchange rate contractcalculate acid test ratioforego defwhat is the definition of a whistleblowergross profit margin ratio definitionwhat is meant by collective bargainingjo hari windowdefine liquidationstrategy hrmentrepreneurial ventures meaningiso quantpavlo theorymeaning of mncfactors affecting consumption expendituretypes of market structures in economicssocio psychological approachadequate meaning in marathicyclical unemployment definedefine marketing environmenttheories of entrepreneurnet profit margin rationsustitution methodmotivation theory by herzbergprocess of bprmarginal diminishing utilitydefinition of geocentrismsemantic differential scale sampleordinal measurement definitiondiagonal communication in an organizationimportance of oligopolydivestitures meaningrepositioning strategy definitionmarket structure of oligopolywhat is a deontological theoryfive porters forcescausal econometric forecasting methodsautocracy definitionpearson formula correlationmonopolistic definewhat is monopolistic market structuredefine milerpolycentric marketingforced distribution appraisal methodhow to overcome psychological barriers in communicationcobb douglas production function and its propertiesdeontological theories definitionjohariwindowblake mouton managerial gridfixed asset turnover calculatoruncontrollable factors in marketingdefine a pyramid schemegordon growth model formuladefinition of sole proprietorship in economicsdescribe the four types of monopolieswhat is demand pull and cost push inflationdefine treasury billadministrative theory of management by henri fayola widely used technique for collecting primary data isgeocentric meaningfiscal and revenue deficitdefine indifference curve and its propertiespf employer contribution rateminimization linear programmingequity financing advantages and disadvantagesemployees provident fund 1952collecting bargaining definitionstimulus meaning in urduan autocratic leader