Describe HRD audit and discuss its significance in an organizational set up.

Describe HRD audit and discuss its significance in an organizational set up. Describe the methodology of HRD audit being practiced in your organization or an organization you are acquainted with.

HRD audit is a comprehensive evaluation of the current HRD strategies, structure, systems, styles and skills in the context of the short and long-term business plans of a company. It attempts to find out the future HRD needs of the company after assessing the current HRD activities and inputs.

The audit itself is a diagnostic tool, not a prescriptive instrument. It will help you identify what you are missing or need to improve, but it can’t tell you what you need to do to address these issues. 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.

Why Do An HR Management Audit ?
An HR Management Audit can answer important questions for your organization, such as:
• Are you currently legally at risk anywhere in the HR part of our business?
• Is the HR function structured to the company’s best competitive advantage?
• Is Human Resources providing the required services?
• Is Human Resources providing leading-edge, “best practices” services?
• Are the needs of the organization effectively addressed?
• Are we maximizing our resources to get the best level of productivity?
• Are we strategically positioned for the future?

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PROCESS OF HRD AUDIT AT HOOVERS
HRD audit starts with an understanding of the future business plans and corporate strategies. While HRD audit can be done even in organizations that lack well formulated future plans and strategies it is most effective as a tool when the organization already has such long-term plans. The HRD audit starts with the following questions:

1. Where does the company want to be ten years from now, three years from now one year from now? ¬
The top management needs to provide the answer to this question. If there are any long-term plan documents they are also reviewed. On the basis of answers, the consultants finalize the subsequent audit strategies and methodology. They identify the nature of the competencies the organization needs to develop in order to achieve its long term, five to 10 years plans.

2. What is the current skill base-of the employees in the company in relation to the various roles and role requirements.
This is assessed through an examination of the qualifications of employees, job descriptions training programmes attended, and so on. Besides this interviews are conducted to identify the skill gap in the organization. Training needs and performance appraisal forms provide insights into the competency and other skill requirements.

3. What are the HRD subsystems available today to help the organization competency base for the present, immediate future and long-term goals?
The auditors identify various HRD subsystems that are available to ensure the availability utilization and development of skills and other competencies in the company. The framework for evaluating these HRD subsystems have been presented earlier where all the component HRD systems have been presented. These systems and other HRD tools that an organization may be using are studied in details for arriving at the systems maturity score.

4. What is the current level of effectiveness of these systems in developing people and ensuring that human competencies are available in adequate levels in the company?
The consultants assess the effectiveness of each system. For example, the effectiveness of performance appraisal system is assessed by discussing with employees, individually and in groups, about the efficacy of the systems. The auditors look at the appraisal forms, at the.
linkages between appraisal and framing, conduct questionnaire surveys to assess the extent to which coaching and other components on other appraisals are being utilized and also conduct systems.

5. Is the HRD structure existing in the company adequate enough to manage the HRD in the company?
At this stage, the auditors or consultants examine whether the current HRD structure can handle the pressing and future HRD needs of the company. They examine the existing skill base of the HRD staff, their professional preparation, attitudes, values, developmental needs, the line manager’s perception regarding them and so on. In addition to the full-time staff, the consultants also assess the HRD structure in terms of the use of task forces and other mechanisms.

6. Are the top management and senior manager styles of managing people in tune with the learning culture?
Here the consultants examine the leadership styles, human relations skills and so on, of senior managers. The extent to which their styles facilitate the creation of a learning environment are examined.

7. HRD Audit examines Linkages with other Systems:
Attempts Total Quality Management (TQM), personnel policies, strategic planning etc., evaluates HRD strategy, structure, system, staff, skill, style and consultants, make suggestions the basis of evaluation about the future HRD strategies required by the company. The structure the company needs to develop new competencies, the systems that need to be strengthened, and the styles and culture that have compatibility with the HRD process.

8. HRD Audit is Business-driven: HRD audit keeps business goals in focus. At the same time, it attempts to bring in professionalism in HRD. In keeping the business focus at the centre, HRD audit attempts to evaluate HRD strategy, structure, system, staff, skill and style and their appropriateness.