HR/Payroll Solutions
Tips on auditing the HR department
What should we include in an HR audit?
HR audits are used to evaluate HR policies and practices. An audit can help to evaluate how effective the programs and services are; how well HR delivers on the programs and services; or where there are opportunities to either enhance, change, or remove programs and processes.
Before conducting an audit, you should determine what aspects of the function need to be evaluated. The overall function can be evaluated, followed by a more in-depth consideration of each of the functional areas, as well as each of the programs and services offered so you make sure the company is in compliance and is meeting customer demands.
For example, it may be that a certain benefit program is no longer effective. This ineffectiveness may prompt an audit of that particular benefit program. Individual and company needs dictate whether the audit should be conducted at the departmental or organizational level.
The following questions are for a brief sample audit of the structure of a company's HR department. This sample audit is not exhaustive, rather it provides examples of the kinds of questions an HR professional should ask.
Sample Audit Questions
Organization and Structure
- Is there an organizational chart?
- Does the chart include both employees' names and position titles?
- Does the chart show reporting relationships?
- Is the chart updated as changes occur?
- As the needs of the organization change, does its structure change?
HR Department Organization
- Is the department sufficiently staffed for the industry and the size of organization?
- Is the budget in line with other organizations of similar size and industry?
- Has the company been involved in any employment lawsuits?
- If there have been suits, what were the outcomes?
- Is there a job description for each position in the department?
- To what position does the top HR position report?
- Does the HR Department have a mission statement?
- Is the HR mission statement consistent with the vision and mission of the organization?
Functions of the HR Department
1. For what functions is the HR Department responsible?
Payroll Benefits Salary administration |
Recruitment Training Labor relations |
Safety Strategic planning Others |
2. Should the HR Department be responsible for all of the functions listed above?
3. Should the HR Department be responsible for functions that are not listed above?
SHRM's HR Audit toolkit can be found at http://www.shrm.org/hrtools/toolkits_published/CMS_013488.asp.
Article By the SHRM Information Center from http://www.shrm.org/kc/solutions/articles/archives/CMS_017951.asp#P-8_0