MITSS - Human Resources Audit -

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The PMS is appropriate in the organization:
The audit must verify whether the PMS is suited to the organizational philosophy and culture.
The PMS measures performance in the manner that is desired by the organization:
Does the PMS measure all aspects of performance in a proper manner? Are there weight ages given to different aspects of performance?
It motivates employees as it is expected to:
A good PMS would encourage and motivate employees to produce better results and exhibit better performance.
It meets the objectives for which it was designed.
It is appropriately linked to the compensation and reward system:
Good performance must be rewarded and bad performance must be penalized. The audit must ensure that this happens.
Promotions are based on the PMS:
If this is so, then is it fair and properly carried out?
The right people get the reward or penalty:
The audit must ensure that the right people get the credit for good performance and those responsible for bad performance are the ones who are taken to task. The audit must ensure that good performers are not being penalized for something that they have not done, nor should anyone get credit for work that someone else has done.
It has in-built equity or it supports biases:
This is a very important aspect of the PMS, which must be verified by means of an audit. Similar work by people in the organization should be rewarded or penalized equally. Fairness of the PMS is an essential aspect of the PMS, which must be safeguarded.
It is perceived as fair and just by the employees:
This may be done by means of survey in the organization. The PMS may not be fair, but if the employees perceive it as fair, or are happy with how the PMS is presently, it serves the purpose.
If the PMS is based on goal setting, are the goals set in an appropriate manner:
In some organizations, MBO is practiced. In such cases, an audit of the entire MBO system will be required.
The superiors know how to assess their subordinates:
This is again a very important aspect, since a PMS, if not properly implemented has little meaning. The audit must verify whether adequate training is available to superiors on how to assess their subordinates, what aspects of their performance must be considered and which must be ignored, how to eliminate biases at the time of appraisal, etc. Also, the audit has to verify whether the superiors are competent to assess their subordinates.
Roles are properly defined:
There may be cases where there is ambiguity as to who is the right boss to carry out the appraisal. This is likely to occur in matrix organizations, or where work is carried out on a project basis. The audit must ensure that there are provisions in the PMS to handle such situations, and whether they are being competently handled.
The Key Performance Indicators (KPIs) are clearly defined:
This aspect is complementary to the definition of roles in the organization. Unless organizational roles and responsibilities are clearly defined, KPIs will not be clear for the purpose of assessment. The auditor must ensure that KPIs are clearly defined and correctly understood by the appraisers and the appraises.
There are provisions for appraisal of temporary, contract staff and apprentices or trainees:
The PMS for the above categories will be different from that for regular employees in the organization.
The PMS is properly and adequately communicated to the workforce:
The employees in the organization should be aware of the PMS and must be informed about the appraisal cycle, or about when and where the appraisal forms are to collected or returned. The deadlines for all PMS activities should be communicated to them. The auditor must verify this.
The frequency of performance appraisal is appropriate and is maintained:
The audit must verify whether the present frequency of appraisal is appropriate or not. It must also ascertain that the appraisals are carried out at the time as is decided upon or as is stipulated.
If there is an appraisal form, is the form serving the purported cause:
Forms for self-appraisal, or for appraisal of others may be used in most organizations. The audit must verify whether these forms are properly designed and address all the necessary issues in PMS. Also, the audit must ascertain that the forms are adequately available as and when required by employees in the organization. Also, there will be different forms for different functions, roles and grades. This has to be verified by the auditor.
The forms administered in a timely manner:
The auditor has to ascertain the timeliness of any of the forms for appraisal. They must be so administered that sufficient time is available to the employees to perform the appraisal activities.
Forms are collected in the stipulated time:
It often happens in organizations, especially ones in which international placements are common, that appraisals get delayed. The auditor must not only ensure that forms are distributed for appraisal on time, but also completed forms must be collected in the given time. If this does not happen, then the auditor must find out reasons for not meeting the deadlines.
All the members of the organization cooperate in the performance evaluation exercise:
It is common for members in the organization to give low priority to performance evaluation activities. The auditor must find out whether this is true, what the reasons for such attitude, and what is the possible corrective action that can be taken to eliminate such a problem
The persons on the job correct for the position:
The auditor must verify whether the right person is doing the right job. This holds true for the manager handling the performance management function.
The process of analyzing appraisals carried out properly:
This would depend on the competencies of the manager handling the performance management function.
Adequate resources available to the performance manager:
These include resources such as helping staff, budgets, co-operation from employees and support from the top management, to name a few.
The analysis of appraisals is done in a timely fashion
Records of performance are maintained in the prescribed manner:
The organization must have prescribed that performance records for 'x' years must be maintained. The auditor must verify whether the 'x' years should be 'x' and not 'y', and also verify that the set practice is followed. The auditor must also verify whether the records are maintained in a confidential manner, documented in the proper manner and are easy to retrieve.
The costs involved in managing the PMS are as budgeted:
The auditor has to ascertain that costs assigned for the PMS are as per the budget. It must also be verified whether such cost is justified or not.
A part of it can be outsourced:
The auditor must verify whether the performance management function can be outsourced or not, and if yes, then which parts of the function can be outsourced.
Vendors are well chosen:
If a part or whole of the performance management function is outsourced, then the auditor must verify whether the process of selecting the vendor is right and is being followed, whether there are any clandestine relationships between some employees and the vendors, whether the present vendor is the best that the organization can get, etc.
Policies laid down in the organization for performance management are being complied with
Legal and other mandatory provisions are being met with:
Some clauses of corporate governance require that performance management be done in a particular fashion. Also, there are requirements for audit of the performance management function in India. The auditor must ascertain that such requirements be met with.
New avenues of performance appraisals can be explored:
The auditor can ratify the feasibility of new PMS or it can be recommended as part of the audit.
Benchmarking is properly done:
Proper benchmarking of performance standards within the organizations and with other organizations in the industry is to be verified by the auditor. The auditor must also verify whether benchmarking of the system is done properly. New performance management interventions undertaken in the organizations are fruitful or not:
If the organization has taken up some new interventions in the field of performance management, the audit must verify whether the intervention was justified, whether it has been successful or not, and it must look at the costs involved, the time and other resources eaten up or saved by the intervention, etc.

Introduction to The Human Resources Audit

How should the HR audit be conducted?

HR audit questions for Human Resource Information Systems (HRIS)

System requirements, features and capabilities

Fields:

Tables:

Reporting Capabilities:

Security:

Utilities and Other Features:

Costs:

HRIS evaluation checklist:

Code Definition:

Employment and Staffing

Compensation

Benefits

Training and Development

Safety/Industrial Health

Employee and Labor Relations

How are needed improvements identified?

How is follow-up and correction done?

Basic Compensation Questions

Pension and Retirement

Health and Welfare Benefits

Employer Branding

How To Build a Compelling Employer Brand

HRD Audit & Compensation Systems

How are needed improvements identified?

How is follow-up and correction done?

HR AUDIT AND PERFORMANCE MANAGEMENT SYSTEMS

The audit has to verify whether