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HRD Audit
BK Parmar
Sr. Manager HR
SHRENUJ & CO. LTD
Start to End...
"The unexamined work life is
not worth living."

The things that get measured gets managed






Socrates (469-399 BC)




Kaplan (2000)
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What is HRD?...


HRD is any process or activity that, either initially
or over the longer-term, has the potential to
develop adults work-based knowledge, expertise,
productivity, & satisfaction, whether for personal
or group/team gains or for the benefit of an
organisation, community nation or ultimately the
whole humanity
- Mclean & Mclean

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What is HRD?...

Competence Building

Commitment Building

Culture Building
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What ?...
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An HRD Audit is like an
annual health check-up, it
plays a vital role in instilling a
sense of confidence in the
Management and the HR
functions of an organisation.
What is HRD Audit?...
HRD Audit is a comprehensive
evaluation of the existing HRD
Structure,
Strategies,
Systems,
Styles,
Skills / Competencies &
Culture

and their appropriateness to achieve
the short-term and long-term goals of
the organisation.
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HR Audit v/s HRD Audit...
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HRD Audit is evaluation of
only few activities :-

Strategies,
Structure,
Systems,
Styles
Skills & Competencies
Culture






HR Audit is a comprehensive
evaluation of the entire gamut
of HR activities :-

HR Cost
HRD activities
Health, Env. & Safety
Legal Compliance
Quality
Compensation & Benefits

How ?...
In HRD Audit the skills, styles, systems, strategies,
structure is studied and analysed using a variety of
methodologies like
interviews, (Individual and group, Top Management, Line Managers,
HRD Staff, Workmen and others)
questionnaires,
observations,
available records,
workshops etc.

This evaluation helps the organisation have a clear
understanding of the lacunae and better align the
HR processes with business goals.
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Why ?...
Organisations undertake HR audits for many reasons :


To make the HR function business-driven.
Change of leadership.
To take stock of things & to improve HRD for expanding,
diversifying, & entering into a fast growth phase.
For growth & diversification.
For promoting professionalism among employees & to switch
over to professional Management.
To find out the reasons for low productivity & improve HRD
strategies.
Dissatisfaction with a particular component.
To become employer of choice.

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Role of HRD Audit in Business Improvements

HRD audit is cost effective.

It can give many insights into a company's affairs.

It could get the top management to think in terms
of strategic and long term business plans.

Changes in the styles of top management

Role clarity of HRD Department and the role of line
managers in HRD

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Improvements in HRD systems

Increased focus on human resources and human
competencies

Better recruitment policies and more professional
staff

More planning and more cost effective training

Strengthening accountabilities through appraisal
systems and other mechanisms
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Role of HRD Audit in Business Improvements
HRD Score Card
This model is based on the assumption
that:

Competent and committed employees are
needed to provide quality products &
services at competitive rates & ways that
enhance customer satisfaction.
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HRD Score Card
These four indices consist of the four pillars of HRD effectiveness. All the four
dimensions are assessed using following ten point rating system.
A* Highest Score and Highest Maturity Level
A Very High Maturity level
B* High Maturity Level
B Moderately High Maturity Level
C* Moderate Maturity Level
C Moderately low Maturity level
D* Low Maturity Level
D Very low Maturity level
F Not at all present
U Ungraded

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Name of the Organisation ABC
HRD
System
Maturity
Grade
HRD
Competence
Score
HRD
Culture
Grade
Business
Linkage
Grade
Overall
HRD
Maturity
rating
B* C B* B B*CB*B

Components to be audited
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HRD Systems Maturity
The HRD systems maturity assesses the
extent to which various HRD subsystems
and tools are well designed & are being
implemented.

The systems should be appropriate and relevant to
business goals.

It should focus on current and future needs of the
corporation.

The HRD strategies and systems should flow from
the corporate strategies.

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HRD Systems Maturity
The systems should be well designed and should
have a structural maturity.
+They should be implemented well.
_The employees should be taking them seriously implemented
well.
_The employees should be taking them seriously and follow
meticulously what has been envisaged in each system.
_The overheads of implementation should be low.
The subsystems should be well integrated and
should have internal synergy.
;They should be adequate and should take care of
the HRD requirements of the organisation.

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HRD Systems Maturity
The following subsystems are assessed and
depending upon the extent to which they
meet the requirements a score is assigned.

+Manpower planning and recruitment

+Performance Management Systems

+Feedback and Coaching Mechanisms

+Training

+Career development and Succession planning

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HRD Systems Maturity
+Job-rotation

+OD Interventions

+HR Information systems

+Worker Development methods and systems

+HR Information Systems

+Potential Appraisal and Development

+Other subsystems if any
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HRD Competencies in the Corporation

This dimension indicates the extent to which HRD
competencies are well developed in the organisation.

The HRD Staff

The Top Management

Line managers and Supervisory Staff

Union and Association leaders

Workmen, Operators and Grass root level employees

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HRD Competencies in the Corporation
Each of the groups is assessed on :

The level of HRD skills they possess

Their attitudes and support to learning and their own
development

Extent to which they facilitate learning among others in the
corporation and those who work with them.

Their attitudes and support to HRD function and systems

Internal efficiency of the HRD function (HRD Department)

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HRD Staff
How professionally qualified are they?

Do they seem to demonstrate adequate knowledge base?

Are adequately trained in the appropriate HRD systems?

Are they sensitive to internal customer requirements?

How good is their skill base in implementing various
systems?

Do they demonstrate OCTAPACE values?

Are they quality conscious?

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HRD Staff

Are they familiar with the business goals of the
corporation?

Are they cost conscious?

Are they empathetic?

Do they spend adequate time trying to understand
the requirements of all categories of employees?
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Top Management
Do they understand HRD and its significance in achieving
business goals?
How supportive are they of HRD interventions and values?
Are their leadership styles facilitative of a learning culture?
Are they willing to give the time needed for HRD?
How well do they subscribe to the HRD values like the
OCTAPACE values?
How well do they practice HRD values.
How committed are they to create a learning culture in the
organisation?
Do they invest their time, effort and energies in employee
development?

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Line Managers and Supervisory Staff
How much do they understand the significance of
HRD?

Are they interested and motivated to develop
themselves?

Are they willing to spend their time and effort in
developing their subordinates?

How supportive are they of HRD efforts?

Do they have listening and other skills required
facilitating development of their juniors?

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Union and Association Leaders
How much developmental role are they playing?

Do they see their own role in HRD?

Are they committed to create a learning organisation?

Are they willing to promote employee development?

Are they positive in their approach and perceive their own
roles a supportive of organisation building?

Do they perceive the significance of Employee development
for organisation building?

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HRD Function
_Adequacy of manpower
_Appropriateness of the structure
_Cost consciousness of staff
_Quality consciousness of the HRD staff
_Responsiveness of the HRD department to the needs of
employees, Managers, Staff, Workmen, Union Leaders?
_Level of Internal customer satisfaction
_Internal operational efficiency of the department?
_Level of internal synergy among staff?
_Are they the first to implement HRD systems? Do they
implement them in an exemplary way?

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HRD Competencies in the Corporation
A HRD Competency maturity core is assigned on the basis of
the competency levels of all categories.

A* = All categories of employees have extremely high
competence base in HRD (knowledge, attitudes, values and
skills) and the HRD department has a high internal efficiency
and satisfaction levels.
B = The competence levels of every group is at an acceptable
level and the internal efficiency of the HRD department and
the internal customer satisfaction are acceptable levels.
D = The competencies of more than one group are below
acceptable levels and/or the HRD department is not
internally efficient and does not meet the requirements of the
minimum internal customer satisfaction.
F = Total failure on almost
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HRD Styles, Culture and Values
The extent to which the leadership and managerial
styles are empowering and competence building is
assessed by studying the leadership and
supervisory styles.

The extent to which the HRD culture and values
are practised and stabilised in the corporation are
measured.

The HRD culture is culture that promotes Human
potential development.
It is also a culture that promotes a learning organisation.
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Business Relevance of HRD
This score indicates the extent to which HRD
efforts (tools, processes, culture etc.) are driven to
achieve business goals.
The business goals includes:
Business Excellence including profitability and other
outcomes the organization is expected to achieve;
Internal operational efficiencies;
Internal Customer satisfaction;
External Customer satisfaction;
Employee motivation and commitment;
Cost effectiveness and cost consciousness among
employees;
Quality orientation;
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Thank You
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HRD Audit v/s PCMM System...
HRD Audit PCMM
Focus is on People & HR practices

Aims at evaluating & improving
HRD competencies in any
organisation.
Aims at improving workforce
practices in software industry.

Based on Quality, TQM & process
improvement models.
Based on HRD - HRD strategies,
structure, competencies, styles, &
culture & takes into consideration
Quality concerns & OD

Does not believe that organisation
could be classified into any stage or
level, assumes that any organisation
could be assessed on a 10 - point
maturity scale on any given
dimension.

Conceptualises the organisation
as passing through 5 maturity
levels, one superior to the other &
describes process areas of each
level.

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PCMM Maturity Framework...
Level 4
Predictable
Level 3
Defined
Level 5
Optimizing
Competency
Management
Capability
Management
Empowered &
measured practices
Level 2
Managed
Competency
based practices
Continuously Improving
practices
People
Management
Level 1
Initial
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What is involved in Good HRD?...
Top Management Philosophy and understanding

Competent HR Staff and Department

Line Manager Attitudes

Union and Employee Support

Use of appropriate Systems

Periodic Renewal Exercises

Business relevance of HRD systems and Practices

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Methodology of HRD Audit
_ Examines long term and short term plans and vision to
assess Competency requirements

_ Identifies broad competency requirements for future Business
Goals

_ Examines the existing HRD strategies, systems and practices
and assess their appropriateness to have the required
competencies

Examines the adequacies and inadequacies of HRD
structure, staff and their competencies, line managers and
their attitudes, top management and their support, unions
and their role in competence building for future

_ Suggests mechanisms for improving all these in the business
context

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The HRD Scorecard is a measure of the HRD maturity level of an organization. The scorecard is based on
the following assumptions and takes into consideration the research based understanding gained in the last
few decades regarding HRD. The maturity level of HRD in an organization is indicated by the
following factors:
- HRD Systems Maturity
- HRD Competencies of the Employees including the HR Department
- HRD Culture of the Organization
- HRD Influence on the Business Goals or Business Linkages of HRD.

This model is based on the assumption that:
- Competent and motivated employees are needed to provide quality products and services at
competitive rates and ways that enhance customer satisfaction.

- HRD Systems Maturity Score: Competencies and commitment can be developed through appropriate
HRD mechanisms (tools and systems). In a HRD Mature organization there will be well-developed HRD
systems and HRD systems Maturity can be measured through HRD audit.

- HRD Competence Score: HRD Competencies of the HRD department and the line managers play a
significant role in implementing the systems and processes in ways that could ensure employee
satisfaction, competence building and customer satisfaction linkages. The competencies of the staff and
the other employees can be measured in terms of an index.

- The HRD Culture: values and processes created by the HRD tools, staff and their styles also play a
crucial role in building sustainable competencies in the organization. These need to be measured and
monitored. It is possible in some corporations (for example small corporations) to have very little of HR
systems and yet have a high level of HR competencies and HR culture. In the traditional family owned
organizations in those years where there were no systems approaches there used to be good degree of
HRD culture, which has resulted in effective functioning and business.
- Business Linkage Score: Business linkages of HRD are very crucial component of HRD effectiveness.
HRD systems, competencies and the culture must be aligned with the business goals of the corporation.
The alignment could be ensured through the direct linkages with customer satisfaction and employee
motivation indices.



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HRD Competencies in the Corporation
The HRD system should focus on the above dimensions.

Are the HRD systems aligned towards the above mentioned or
other important business goals of the corporation?

Does the HRD staff reflect adequate understanding the
commitment to the business goals of the organisation?

Are the HRD processes and culture drive employees and the
corporation and interviews of the auditor with the employees.
Similar ratings are assigned for this dimensions.

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