HR audit is an important management control device. It is a tool to judge the organization’s performance and effectiveness of HR management. It is an analytical, investigative, and comparative process. It gives feedback about HR functions to operating managers and HR specialists.
Human Resource Audits identifies the effectiveness and adequacy of the HR department’s specific practice areas or processes. The results obtained from this audit prioritize these gaps in an effort to minimize lawsuits or regulatory violations. It will also help in achieving and maintaining world-class competitiveness in the HR practice areas. The Human Resource Audit also involves identifying the issues and finding solutions to problems before it becomes unmanageable. It provides an opportunity to assess what the organization is doing right and how things can be done differently, in a more efficient manner and at a reduced cost.
In the current competitive climate, organizations operate within the limits of a heavily regulated employee environment. The given challenge includes dealing with various complex laws and regulations. The HR function’s scope includes establishing and administering a host of policies and practices, many of which involve compliance implications. It significantly influences the productivity and profitability of the organization.
A Human Resource Audit process will provide many advantages to the organization, such as linking the HR strategy, re-engineering the systems and procedures, and improving the HR systems’ competency and functional efficiency.