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Master of Business Administration-MBA Semester 3
MU0004 Human Resource Audit - 2 Credits
Assignment Set- 1
Q.1 Write a detailed note on Training and Development Audit
Ans.
Q.2 What are theBenefits of HR Audit
Ans.
Q.3 Mr Sen wants to conduct an HR Audit in his organization. He
wants to specifically audit
the Employment Practices and Employee involvement in particular.
Suggest what all aspects
you may cover in the questionnaire for the audit. Prepare a
questionnaire with at least 15
statements.
Assignment Set- 2
Q.1 Write a note on the Employment handbook.
Ans.
THE EMPLOYEE HANDBOOK
A handbook can be an effective vehicle for communicating company
culture and benefits
aswell as any expectations the company has of itsemployees in
other words, its policies.
Written policies help ensure equal and consistenttreatment of
employees by managers if used
as a guide and can help avoid employmentlawsuits. However, the
handbook must be
reviewed and updated regularly to reflect changesin employment
law as well as in company
circumstances. An outdated handbook can causeserious problems
and may be worse than not
having one. There are some cautions, however,as you include
information in the company
handbook. You should avoid promising that allemployees will be
treated in a certain way all
of the time. Sometimes even promising to useprogressive
discipline standards can backfire
into wrongful discharge if you terminatesomeone for egregious
behavior without this process.
Avoid using a probationary period fornew hires; do not imply
permanent employmentfollowing any initial trial period. This
chipsaway at the at-will employment doctrine and may
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be construed as an implied contractualcommitment. As a rule of
thumb, avoid including
policies that limit the companys ability touse its discretion in
making employment decisions,
and do not guarantee in advance how alldecisions will be made.Be
sure that your handbook
makes all the legally mandated statements. These statements
aresimilar to the mandated
postings and include policies related to equal opportunity,
non-harassment, and maternity,
family, and medical leaves (if applicable). The handbook is also
agood place to describe thecompanys ownership of communication
equipment, e.g.,electronic forms in particular (e-
mail and Internet access). Be sure to clearly outline
companyexpectations about how such
services are to be used. Legal counsel should review thehandbook
to ensure that it is
compliant with state and federal requirements. In general,
ifthere is a conflict between state
and federal mandates, the federal mandate takesprecedence unless
the state mandate is more
stringent, i.e., more favorable to employees.So, the better you
treat your employees, the safer
you are from a legal compliancestandpoint
EMPLOYEE HANDBOOKS
are also often called Policy and Procedures Manuals.
TheHandbook/Manual is a statement of
the policies of the business and how the business is to
beconducted. The company employee
handbook is one of the most important communication tools
between your company and youremployees. Not only does it set forth
your expectations for your employees, but it also
describes what they can expect from the company. It is essential
that your company has one
and that it be clear and as unambiguous as possible.
Misunderstandings or misstatements can
create legal liabilities for your business. In legal disputes
courts haveconsidered an employee
handbook to be a contractual obligation, so word it carefully.
The company employee
handbook and related personnel policies should be one of the
firstformal communications that
you will have with an employee after they are hired. Make sure
thefirst impression is a good
one. Similarly, in the event of a dispute or poor performance
review,this will be the first place
that the employee turns.The handbook should contain enough
detail to avoid confusion, but
not so much as tooverwhelm. For instance, if there are other
documents (i.e. group insurance
handbook, andretirement plan documents) which more appropriately
provide details, don't try
to recreate theinformation in the handbook. Instead, offer a
brief summary and refer to the
other document inthe employee handbook. Make sure that you are
familiar with the myriad of
laws and regulationsfor employment. It is always wise to consult
with a lawyer on any topics
that you don't understand.
Q.2 Write a note on HR Auditing.
Ans.
Conceptualization of HR Auditing
Auditing has evolved, becoming increasingly specific, until the
term functional audit
hasemerged. The objective of a functional audit is to diagnose,
analyze, control, and advise
withinthe boundaries of each functional area of the company.The
HR audit is a type of
functional audit. Thus, as a first approach, one could say that
HR auditing consists of
diagnosing, analyzing, evaluating, and assessing future lines of
action withinthe framework
of HRM.HR auditing is a basic tool for the management of a
company. Its objective is not
only thecontrol and quantifying of results, but also the
adoption of a wider perspective that
will aid indefining future lines of action in the HRM field.
Thus, HR auditing must perform
two basicfunctions [Cantera, 1995]. First, it must be a
management information systemwhose feedback provides information
about the situation in order to facilitate the
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development of managing processes or the development of HR. On
the other hand, it must be
a way of controlling andevaluating the policies that are being
applied, as well as the
established processes.It can be understood that in order to
secure the operative efficiency and
user or clientsatisfaction, an appraisal of the results of the
HR function is necessary.
According to thisapproach, the results obtained can be valued
from certain HR policies (an
external type of measurement), or from the results of the
policies or the policies themselves.The results can bevalued
through their cost (a measurement internal to the function)
[Walker,
1998]. This wouldlead the company to consider some basic
questions. Are adequate HR
policies being developed?Are the desired results being obtained?
To what extent do they add
value to the company?The purpose of this work is to offer a few
guidelines for the appraisal
of the HR function, whichis in itself the basis for the auditing
process. The objective is to set
conceptual limits for itscontent and to present the different
approaches with which the HR
audit can be presented.
Q.3 Discuss balanced scorecard in the perspective of Business
Process and
Consumer.
Ans.
The HR Scorecard
argues that HR measurement systems must be based on a
clearunderstanding of
organizational strategy and the capabilities and behaviors of
the workforcerequired to
implement that strategy. Thus, an HR Scorecard is a mechanism
for describingand measuring
how people and people management systems create value in
organizations, aswell as
communicating key organizational objectives to the
workforce.
It is based on a strategy map which is a visual depiction of
what causes what in
anorganization, beginning with people and ending with
shareholder or other
stakeholderoutcomes.
The HR Scorecard
is built around a series of examples and a process that
helpsmanagers to do this work in their
own firms designing an HR architecture that
relentlesslyemphasizes and reinforces theimplementation of the
firms strategy.
The HR Scorecardhas five key elements:
The first element is what we called Workforce Success. It asks:
Has theworkforceaccomplished the key strategic objectives for the
business?
The second element is called Right HR Costs. It asks: Is our
total investment intheworkforce (not just the HR function)
appropriate (not just minimized)?
The third element we describe as Right Types of HR Alignment. It
asks: Are our
HRpractices aligned with the business strategy and
differentiated across positions, whereappropriate?
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The fourth element is Right HR Practices. It asks: Have we
designed andimplementedworld class HR management policies and
practices throughout the business?
The fifth element is Right HR Professionals. It asks: Do our HR
professionals have the
skills they need to design and implement a world-class HR
management system?
There is increasing interest in measuring HR and initial efforts
have made use of a HR
scorecard to provide a framework within which to measure.
However, experience of HR
scorecard implementation has been mixed. In this article we
provide insights into the
reasons why, and outline several key steps that must be
undertaken for HR measurement
to be effective.
Traditionally, HR functions have struggled with appropriate and
meaningful measures
toquantify their value, or that of the people engaged within the
business. The emergence of
theHR scorecard concept has tried to address this point, taking
its core design from
theestablished balanced scorecard measurement framework applied
in businesses. In short,thebalanced scorecard is essentially a
framework that attempts to collate measures across
fourareas: financial, internal process, customer and (people)
learning, and growth rather
thanjust the traditional financial measures (hence the term
balanced).
Balanced Scorecard
A new approach to strategic management was developed in the
early 1990s by Drs.
RobertKaplan (Harvard Business School) and David Norton. They
named this system the
balancedscorecard. Recognizing some of the weaknesses and
vagueness of previous
managementapproaches, the balanced scorecard approach provides a
clear prescription as to
whatcompanies should measure in order to balance the financial
perspective.
The balanced scorecard is amanagement system(not only a
measurement system) thatenables
organizations to clarify their vision and strategy and translate
them into action. Itprovides
feedback around both the internal business processes and
external outcomes in orderto
continuously improve strategic performance and results. When
fully deployed, thebalanced
scorecard transforms strategic planning from an academic
exercise into the nervecenter of an
enterprise.Kaplan and Norton describe the innovation of the
balanced scorecard as follows:
The balanced scorecard retains traditional financial measures.
But financial measures tell the
story of past events, an adequate story for industrial age
companies for which investments inlong-term capabilities and
customer relationships were not critical for success. These
financial measures are inadequate, however, for guiding and
evaluating the journey that
information age companies must make to create future value
through investment in
customers, suppliers, employees, processes, technology, and
innovation.
The balanced scorecard suggests that we view the organization
from four
perspectives, and to develop metrics, collect data and analyze
it relative to each of these
perspectives:
Learning Perspective:
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This perspective includes employee training and corporate
cultural attitudes related to both
individual and corporate self-improvement. In a knowledge-worker
organization,
Peoplethe only repository of knowledge are the main resource. In
the current climate of
rapid technological change, it is becoming necessary for
knowledge workers to be in a
continuous learning mode. Government agencies often find
themselves unable to hire new
technical workers, and at the same time there is a decline in
training of existing employees.This is a leading indicator ofbrain
drain that must be reversed. Metrics can be put into place
toguide managers in focusing training funds where they can help
the most. In any case,
Learning and growth constitute the essentialfoundation for
success of any knowledge-worker
organization.
Business Process Perspective:
This perspective refers to internal business processes. Metrics
based on this perspective allow
the managers to know how well their business is running, and
whether its products and
services conform to customer requirements (the mission). These
metrics have to be carefully
designed by those who know these processes most intimately; with
our unique missions theseare not something that can be developed by
outside consultants.
In addition to the strategic management process, two kinds of
business processes may be
identified: a) mission-oriented processes, and b) support
processes. Mission-oriented
processes are the special functions of government offices, and
many unique problems are
encountered in these processes. The support processes are more
repetitive in nature, and
hence easier to measure and benchmark using generic metrics.
Consumer Perspective:
Recent management philosophy has shown an increasing realization
of the importance of
customer focus and customer satisfaction in any business. These
are leading indicators: if
customers are not satisfied, they will eventually find other
suppliers that will meet their
needs. Poor performance from this perspective is thus a leading
indicator of future decline,
even though the current financial picture may look good.
In developing metrics for satisfaction, customers should be
analyzed in terms of kinds of
customers and the kinds of processes for which we are providing
a product or service to those
customer groups.
The Balanced Scorecard and Measurement-Based Management
The balanced scorecard methodology builds on some key concepts
of previous management
ideas such as Total Quality Management (TQM), including
customer-defined quality,
continuous improvement, employee empowerment, and primarily -
measurement-based
management and feedback.
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