Audit
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The Human Resource Audit as an Improvement Tool
Regardless of the type of company or the size of your HR department, the HR Audit is a simple, yet comprehensive tool to analyze and improve your effectiveness as a function.

The audit is made up of four main steps:
1) Define desired HR practices for your organization
2) Assess current practices against the criterion that you have established
3) Analyze the results
4) Establish improvement goals and take action
This simple four-step approach can be repeated as the annual planning and goal setting process occurs within your company. Progress can be measured against goals and a continuous improvement cycle naturally unfolds.

Purpose(s) of an Audit
The audit can serve any of the following purposes:
To clarify desired practices of HR work and roles within the organization (HR Department, Line Managers).
To establish a baseline for future improvement.
To evaluate current effectiveness.
To standardize practices across multiple sites within a division or company.
To assess current knowledge and skills required of HR practitioners.
To improve performance levels to key customers within the organization.
The Audit Process
Step One–Defining Audit Statements
Definition of desired HR practices can occur through in a variety of ways.
A good starting point is to take some time and reflect on the legal requirements and programs that the department must administer. Simply listing them is a good first step.

Next, consider your areas of responsibility and traditional HR practices covered by your function: They may include HR Planning, Staffing, Performance Management, Employee Relations, Compensation and Benefits, Training and Development, Safety and Wellness,

Employee Surveys, and Communications. Finally, other areas to consider are company initiatives that the HR function may be required to support, i.e. internal customer requirements. Specifics are unique to your company, but examples could include supporting a Total Quality Management initiative, Team Based Work System, etc.

With this list in hand, a statement can be written about each major practice that you want to define. Typically, they are stated in the present tense and in a positive manner. The following examples illustrate these traits:

The staffing process is documented so that the responsibility of each person in the process is clear and understood.
Performance appraisals are completed for each employee in the organization.
There is a train-the-trainer program for each major training program within the company.
New employees complete a new hire orientation program of key company policies and procedures within the first 30 days of work.
There is an issue resolution process that is well understood and used by employees.
As you may notice, definitions can be as complete or detailed, as the developer desires. In starting out, it is better to make more general statements and improve from year to year in those areas that you choose to raise the level of performance.

In summary, you may as many as 60-70 statements depending upon size of your company and the level of detail that you prefer to measure. Regardless of the number, you are developing a description of the level and quality of performance you desire for the Human Resource function.

Step Two–Assessing Current Practices
With the list of statements completed, the assessing current practices requires you to be objective. A good approach is to look for evidence that supports or refutes each statement made. Evidence may take the form of policies and procedures, output from employee surveys, interviews with key customers, data collection from a Human Resource Information System, reports issued to regulatory departments, statistics, etc.

The first time the assessment is made, it may become apparent that the definition in step one needs improvement or modification. These changes should be noted and made a part of the next “improvement cycle.”

As you review the summary of statements and your assessment, there are several analysis that can help.
Step Three–Analyze the Results
It is important to recognize strengths and opportunities for improvement. As results are reviewed, themes will emerge around specific HR areas. For example, one company may be very strong in administration and managing legal requirements. On the other hand, it may need improvement in developing higher-level systems definition. Another company may be very strong in areas Safety, Security, and Training, but need improvement in Communication practices that run across the company.

Reviewing the data in a variety of perspectives is helpful to formulate a picture of overall HR performance against the audit. It can reflect the positive effect of actions taken in previous years as well as provide information for future actions.

It may become

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