Auditing human resource functions & competencies: an empirical study.

AuthorRani, Neetu
PositionReport - Statistical data

Literature suggests that a strategic performance measurement system should be used to help organizations to build capabilities to gain competitive advantage. HR audit in the Indian private sector banks can suggest a number of improvements which can be incorporated. This study attempts to analyse the impact of HR audit on employee performance of selected private banks in India. The study compares the level of overall employee performance of banks before and after organizing awareness campaigns with respect to HR Audit. It was found that there is a positive impact of awareness campaigns on performance of HR Audit. The study provides suggestions which can be incorporated for the improvement of the performance measurement system.


"HR audit is a process to review implementation of your institutions, policies and procedures, ensure compliance with employment law, eliminate liabilities, implement best practices and educate managers" ( manishakkunwar/hr-planning-and-audit)

While HRD stands for human resource development HR stands for the human resource function. The HR function is all-encompassing, and includes HRD and more. It goes far beyond the traditional personnel function. It is more proactive and change-oriented and includes competencies of a nature different from the traditional personnel function. The traditional personnel function had been more of a maintenance function with very little growth focus. In an earlier research, it has been found that good companies use HR activities for short-term goal considerations. If these organisations will not ensure linkage of organizational activities to corporate strategy, they may move in the wrong direction. Hence, it is important to ensure linkage between HRD and corporate strategy. Human Resource Development (HRD) is a process by which the employees of an organization are helped, in a continuous, planned way, to: 1) acquire or sharpen capabilities required to perform various functions associated with their present or expected future roles, 2) develop their general capabilities as individuals and discover and exploit their potentials for their own and/or organizational development purposes, and 3) develop an organizational culture in which supervisor-subordinate relationships, teamwork, and collaboration among subunits are strong and contribute to the professional well-being, motivation, and pride of the employees (Rao, 1985).

All HRD assessments should start with the business goals and subjected to business considerations. Any assessment of HRD should examine the extent to which such linkages exist. Human resource audit crosses the boundaries between human resources management and auditing. An audit of human resource management performance is always future orientated. It helps in identifying areas for organizational improvement. This study focuses on the use of HR audit to evaluate the contribution of human resource management activities of selected private sector banks in India.

Review of Literature

The word audit comes from the Latin, 'audire' (to listen). Auditing had existed for centuries and it could be traced to ancient Egypt, Babylon and Rome. The auditor's role was to 'listen' to the records and the notion of an independent outsider 'looking at' is central to auditing (Burrowes & Persson, 2000). It is not the function of an auditor to take the role of the management; the audit role is one of the examination and of critiquing management systems and procedures (Clardy, 2004).

After the evaluation of human resource management activities the issues were addressed i.e. whether an examination grounded in performance auditing could usefully evaluate the contribution of human resource management activities. There is a research gap surrounding the nexus between auditing and human resource management in relation to human resource auditing. This leads to confusion for human resource practitioners: in topic definition, in understanding the different types of audit, the professional practices of auditing by crossing discipline boundaries and mixing auditing methodology with the evaluation of human resource management. This study highlights an evaluation method that deserves further research attention.

Khan (2005), suggested a similar approach that can be applied in the international arena. Dolenko (1990) outlined a methodology for applying auditing techniques in human resource management but advanced literature is disquieted by alternative interpretations that define the human resource auditing in different ways (Clardy, 2004). Human resource auditing can be sited within and between each of the fields of human resource management and auditing. This research has two parent disciplines: auditing and human resource management. Auditing is described as an investigative and information processing activity, which evolved in response to the need for independently verified stewardship reports (Parker, Ferris & Otley, 1989).

Human resource management emerged from traditional personnel management in the 1980s. Traditional personnel management was viewed as involving the performance of basic staffing functions, and it is often conducted without regard to other organizational activities and alignment with organizational objectives. Within the field of human resource management, a human resource audit is a method of evaluating or assessing activities. Human resource evaluation is not systemically identified in modern textbooks. However, evidences are available that group the human resource auditing with other human resource evaluation methods for the purposes of discussion and comparison (CCH, 2007).

An accepted definition of human resource auditing has proven to be elusive with many writers either not offering a definition or offering a definition without firm grounding. A key emerging construct is that human resource auditing involves the application of auditing theory and practice within the area of human resource management the activities to be audited being determined by the audit scope.

The purpose of developing an HR competency model for change management is to use it as a tool for: performing an HR audit in order to assess performance gaps and increase the effectiveness of...

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