RBI Grade B (NRA) Exam: Concept of HR Audit and Purpose

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An audit is a means by which an organization can measure where it currently stands and determine what it has to accomplish to improve its human resources function. It involves systematically reviewing all aspects of human resources, usually in a checklist fashion, ensuring that government regulations and company policies are being adhered to. The key to an audit is to remember it is a learning or discovery tool, not a test. There will always be room for improvement in every organization. An HR audit provides a quick way to take stock of a company՚s human resources and practices with an eye toward improving them. While there are different ways to conduct an HR audit, depending on the company՚s goals, audits usually involve interviewing senior and mid-level management, reviewing the company՚s HR policies and forms, and sometimes even surveying employees. The advantage of HR audits is that they bring a level of expertise to bear on issues that, while important, most companies simply do not have the time or capacity to undertake themselves.

A basic audit will address compliance issues such as, the hiring process or personnel policies. We recommend a fuller assessment to address possible organization design issues and to identify opportunities for making better use of the company՚s human resources. Once the audit is completed, the findings are presented to management. What happens after that depends on management. The company owns the findings and can choose whether, when, and to what degree to act on them. The HR Audit helps by:

  • providing feedback on the value of the contribution of the HR function to the organisation՚s strategic business objectives
  • assessing the quality of HR practices, policies and delivery
  • reporting on extent of statutory HR compliance and remedial action required
  • assessing HR and line management relationships and ways these can be improved
  • setting guidelines for establishing HR performance standards
  • identifying areas for change and improvement with specific recommendations

The HR Audit focuses on the following elements of People Management:

  • Organisational Data
  • Strategic HRM overview
  • Staff Communication and Change Management
  • HRM Operational Delivery
  • Staff Performance and Morale
  • HR Performance Measures

Purpose of HR Audit

  • To insure the effective utilization of an organization՚s human resources.
  • To review compliance with a myriad of administrative regulations.
  • To instill a sense of confidence in management and the human resources function that it is well managed and prepared to meet potential challenges.
  • To maintain or enhance the organization՚s and the department՚s reputation in the community.
  • To perform a “due diligence” review for shareholders or potential investors/owners.

SMART Goal Settings

An effective expression of the important goal setting guidelines is that you should set SMART goals. What the SMART goal setting guidelines actually mean is that your goals should be

  • Specific
  • Measurable
  • Attainable
  • Rewarding
  • timely
  • Specific

Guidelines for SMART Goals

With a specific goal you can clearly see what it is you want to achieve, and you have specific standards for that achievement. In making your goals specific it is important that you actually write them, which is crucial in all goal setting guidelines. The more specific is your goal, the more realistic is your success, and the shorter is path to it.

When you work on making your goal specific, you program your subconscious mind to work for you. Then, your feelings and thoughts will lead you to your goal instead of pointing at the obstacles. To make your goals specific you also need to work out the other components of SMART goal setting guidelines below:

  • Measureable: For a goal to be measurable you need a way to measure the progress and some specific criteria that will tell you when you can stop and the goal is achieved. Feeling the progress is very important for you to stay motivated and enjoy the process of achieving the goal.
  • Attainable: An attainable goal is a goal for which you see a realistic path to achievement, and reasonable odds that you get there. This does not mean that the lower you aim the more likely you reach success. It is well known that goals that work best have a challenge in them. They are chosen as ambitious as possible, but still reachable. Then they will give you more motivation and sense of achievement.
  • Rewarding: A goal is rewarding when you have clear reasons why you want to reach that goal. This is one more place where it is important that the goal is really yours. Have your specific reasons and expected reward in writing. If possible, even with some visual pictures. Imagine how you are going to feel when the goal is finally reached. This will ensure that the goal is really worth achieving. Then, every time you get stuck and don՚t feel motivated enough, read your reasons and look at the pictures. This is a known and very powerful practical technique of how to get through difficult moments and not quit.
  • Timely: The fifth requirement of the SMART goal setting guidelines is that your goal should have a specific time limit. This is also very important for your subconscious mind. Besides, time is the price you pay for the reward from achieving a goal. Setting the deadline will protect you from paying higher price than the goal is worth. This is also your protection from procrastination and perfection.

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