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Spring 2010(Jan-June)

Master of Business Administration-MBA Semester 3

MU0004 – Human Resource Audit - 2 Credits

(Book ID: B0799)

Assignment Set- 1 (30 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Explain the process of HR Audit in detail [10]

Answer:

The audit process

The HR audit process is conducted in different phases. Each phase is designed to build upon the

preceding phase so that the organization will have a very strong overview of the health of the HR

function, at the conclusion of the audit. These phases include:

Pre-Audit Information: This phase involves the acquiring and review of relevant HR manuals,

handbooks, forms, reports and other information. A pre-audit information request is forwarded to

the client who compiles the necessary information for review by auditors.

Pre-Audit Self-Assessment: In order to maximize the time spent during subsequent portions of 

the audit, a pre-audit self-assessment form, if sent to the client can be of use. The self-

administered yes/no questionnaire asks a number of questions about current HR policies and

practices.

The completion of this self-administered questionnaire allows auditors to identify key areas for 

focus during the HR audit.

On-site Review: This phase involves an on-site visit at the client’s facility interviewing staff 

regarding HR policies and practices. A very in-depth HR audit checklist is completed.

Records Review: During the on-site visit, a separate review is conducted of HR records and

postings. Employee personnel files are randomly examined as well as compensation, employee

claims, disciplinary actions; grievances and other relevant HR related information are checked.

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Audit Report: The information gathered is used to develop an HR audit report. The audit report

categorizes action needs into four separate areas. The areas that are urgent and important (UI),

not urgent needs but important (NUI), not urgent but not important needs (NNI)), and important

opportunities needs (IO). As a result of this scheme of classification, managements can prioritize

their steps.

The critical areas 

The comprehensive HR audit covers all areas of HR management like recruitment practices,

training and development, compensation and benefits, employee and union relations, health,

safety and security, miscellaneous HR policies and practices-welfare, strategic HR issues,

manpower planning/budgeting.

Besides classifying needs in each of the above areas, the HR audit also cites relevant laws,

cases and research to support the recommendations.

Preparation for an audit

Auditor engagement: If external firm carrying out the audit, it is preferable to set terms in writing

defining and agreeing on scope .If using internal resource, it is better to appoint them formally

with clarity on scope and select persons who are non political or those who are not high on

hierarchy. Also, if internal persons are auditing there must be training in auditing.

Documents, manuals, handbooks, forms and reports auditor must have access to relevant

information contained in employee files and other confidential documents of the organization.

Auditors must be given unrestricted access to records, once they sign agreement for 

confidentiality.

Data gathering: Completion of a self-assessment questionnaire significantly expedites the audit

process and allows for better audit planning.

On-site access: The on-site portion of the audit is the most critical.

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Q.2 Write a detailed note on Training and Development Audit [10]

Answer:

Training and Development

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• Individual and departmental Training and Development plans in place and strategically

linked to departmental strategic objectives

• A diverse set of training and development activities (e.g. overseas attachment, overseas

training, secretariat attachment)

• Training and Development integrated with PMS and Succession Plan / Manpower Plan• Timely induction training provided to all new staff with management training to be

provided systematically afterwards

• Regular review of the Training and Development policies

• Evidence of improvement in work quality and efficiency

• Managers’ positive feedback on learners’ performance

• Training courses rated highly in quality and relevance

Importance of Training and Development

• Optimum Utilization of Human Resources - Training and Development helps in optimizing the

utilization of human resource that further helps the employee to achieve the organizational goals

as well as their individual goals.

• Development of Human Resources - Training and Development helps to provide an opportunity

and broad structure for the development of human resources' technical and behavioral skills in an

organization. It also helps the employees in attaining personal growth.

• Development of skills of employees - Training and Development helps in increasing the job

knowledge and skills of employees at each level. It helps to expand the horizons of human

intellect and an overall personality of the employees.

• Productivity - Training and Development helps in increasing the productivity of the employees

that helps the organization further to achieve its long-term goal.

• Team spirit - Training and Development helps in inculcating the sense of team work, team spirit,

and inter-team collaborations. It helps in inculcating the zeal to learn within the employees.

• Organization Culture - Training and Development helps to develop and improve the

organizational health culture and effectiveness. It helps in creating the learning culture within the

organization.

• Organization Climate - Training and Development helps building the positive perception and

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feeling about the organization. The employees get these feelings from leaders, subordinates, and

peers.

• Quality - Training and Development helps in improving upon the quality of work and work-life.

• Healthy work-environment - Training and Development helps in creating the healthy working

environment. It helps to build good employee, relationship so that individual goals aligns with

organizational goal.

• Health and Safety - Training and Development helps in improving the health and safety of the

organization thus preventing obsolescence.

• Morale - Training and Development helps in improving the morale of the work force.

• Image - Training and Development helps in creating a better corporate image.

• Profitability - Training and Development leads to improved profitability and more positive

attitudes towards profit orientation.

• Training and Development aids in organizational development i.e. Organization gets more

effective decision making and problem solving. It helps in understanding and carrying out

organizational policies

• Training and Development helps in developing leadership skills, motivation, loyalty, better 

attitudes, and other aspects that successful workers and managers usually display.

-Training and Development demonstrates a commitment to keeping employees on the cutting

edge of knowledge and practice.

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Q.3 Mr Deshmukh wants to conduct an HR Audit in his organization. He wants to specifically

audit the Employment Practices and Employee involvement . Suggest what all aspects you may

cover in the questionnaire for the audit. Prepare a questionnaire with at least 15 statements. [10]

Answer:

SAMPLE QUESTIONNAIRE # 1

Example of an internal Human Resources Audit: Please amend using questions from the

comprehensive HR Audit to determine the content of your Human Resources Audit.

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Payroll: Yes/No

Brand Name: ––––––––––––––––––––––––––––––––––––––––––––––––

What Records and Control Measures are in place?

Employment Details

(For each category, please indicate if applicable to all employees. If not, please supply details.

Further, please indicate whether a policy in regard to that specific category is in place or not and

attach same to this document).

Working Hours: Hours per day: ––––––––– Days per week: –––––––––––––

Working Hours Policy: Yes/No

Overtime: Hours per day: ––––––––––– Days per week: –––––––––––––––

No1 Yes 1Overtime Policy in Place:

Annual Leave: ––––––––––––––––––––––– working days leave per annum

Sick Leave: ––––––––––––––––––––––––––– days per year/36 month cycleMaternity Leave: ––––––––––––––––––––––––––––– months per occasion

Family Responsibility Leave: –––––––––––––––––––––––––– per occasion

Study Leave: –––––––––––––––––––––––––––––––––––– per examination

Unpaid Leave: ––––––––––––––––––––––––––––––––––––––––––––––––

Leave Policy in Place No1 Yes1: Annual

Sick / Yes / No

Maternity / Yes / No

Family Responsibility / Yes / No

Study / Yes / No

Unpaid / Yes / No

Remuneration and Benefit Details

(Please indicate whether a policy in regard to each specific category is in place or not and attach

same to this document).

If available, please supply a copy of the following:

Letter of Employment or Contract

Pay slip

Induction Programme

Employee Handbook

Certificate of Service

Medical Aid: Name of Fund: –––––––––––––––––––––––––––––––––––––

Company Contribution Details: –––––––––––––––––––––––––––––––––––

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 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Pension/Provident Fund Fund type:

Pension/Provident –––––––––––––––––––––––––––––––––––––––––––––

Name of Fund: ––––––––––––––––––––––––––––––––––––––––––––––––

Company Contribution Details: –––––––––––––––––––––––––––––––––––

 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

No1 Yes 1Employment Policy:

How are employees’ salaries?

Packages structured? : ––––––––––––––––––––––––––––––––––––––––––

 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

Company Vehicle Policy: Yes / No

Transfer and Relocation Policy: Yes / No

Retrenchment Policy: Yes / NoWhat is the Official Retirement Age of the Company? Male –––––––– Years

Female ––––––––––––––––––––––––––––––– years

Early Retirement Policy: Yes / No

Does the Company offer Educational Assistance? Yes / No

If yes, to whom:

Employees Only

Employees and Employees Immediate children

Other (please specify) ––––––––––––––––––––––––––––––––––––––––

No1 Yes 1Does the Company offer any Loan Facilities:

If yes, please indicate:

To whom –––––––––––––––––––––––––––––––––––––––––––––––––––

What Category:(e.g. welfare, home)

 –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

 ––––––––––––––

Other 

(Please indicate whether a policy in regard to each specific category is in place or not and attach

same to this document).

Aids & No1 Yes 1Life Threatening Diseases Policy:

No1 Yes 1Disciplinary and Grievance Procedures:

Harassment & No1 Yes 1Non-Discrimination Policies:

No1 Yes 1Smoking Policy:

What are the Company’s ratios of employees?

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Company Total White Black Male Female

Senior Management

Middle Management

Supervisory

General Staff 

No. of Disabled Employees: ––––––––––––––––––––

Employment Equity Policy: Yes / No

 

Information Systems

What computer software programmes do you use: ––––––––––––––––––––

 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

 ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––Do your employees have their own email addresses: Yes / No

Do you have a Corporate Website: Yes / No

If yes, please specify URL: http://www ––––––––––––––––––––––––––––

How many employees have access to e-mail facilities within your 

Company /department? –––––––––––––––––––––––––––––––––––––––––.

No1 Yes 1Do any employees work on a contract basis:

No1 Yes 1Do any employees work from home:

Restructuring

No1 Yes 1is it likely that your organization or the terms and conditions of employees may be

restructured?

Are you familiar with the requirements of?

The new Basic Conditions of Employment Act: Yes / No

Employment Equity Act: Yes / No

Code of Good Practice on Sexual Harassment in the Workplace: Yes / No

Labour Relations Act 66 of 1995 (as amended): Yes / No

Skills Development Act: Yes / No

Code of Good Practice on the Regulation of Working Hours: Yes / No

Code of Good Practice on Maternity Leave: Yes / No

Do you participate in any Corporate Social Investment schemes: Yes / No

If yes, please specify which organization: –––––––––––––––––––––––––––.

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Questionnaire Sample # 2

1. Do you comply with federal and state guidelines requiring that certain information must be

posted in view of employees and applicants? Yes / No/ Not Sure

2. How is your employee files organized? Do you comply with current Employee Privacy

regulations? Yes /No /Not Sure

3. Jobs are classified as exempt (salaried) and non-exempt (hourly)? Are you confident that

your job classification system would pass a Dept. of Labor audit if challenged? Yes

/No /Not Sure

4. Do you comply with all the Federal and State laws and requirements applicable to your 

company? Yes /No /Not Sure

5. Are your salaries and wages reasonable, competitive and both externally and internally

equitable? Yes /No /Not Sure6. Do you understand your responsibilities to regularly provide training and/or information to

your employees on legally required topics such as Illegal Harassment Prevention, No

Discrimination, changes to benefits, changes to company policies and procedures, etc?

Yes /No Not Sure

7. Do you have difficulty attracting and/or keeping good, qualified workers? Yes /No /Not

Sure

8. Are you confident that your employees are aware of the work rules in your organization

covering items such as: attendance, absences, tardiness, theft, intoxication, drug use,

insubordination, confidentiality, no harassment, etc? Yes /No /Not Sure

9. Is absenteeism a problem for your organization? Yes /No /Not Sure

10. Is the quality of work or customer service in your organization as high as it could be?

Yes/ No /Not Sure

If you answered “No” or “Not Sure” to any four or more of the Questions, you would

benefit greatly from an audit. If you answered No to any one of Questions 1, 2, 3 or 4, you

would benefit greatly from an audit.

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Master of Business Administration-MBA Semester 3

MU0004 – Human Resource Audit - 2 Credits

(Book ID: B0799)

Assignment Set- 2 (30 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Discuss balanced scorecard in the perspective of Business Process and Consumer.[10]

Answer:

Balanced Scorecard

A new approach to strategic management was developed in the early 1990’s by Drs. Robert

Kaplan (Harvard Business School) and David Norton. They named this system the ‘balanced

scorecard’. Recognizing some of the weaknesses and vagueness of previous management

approaches, the balanced scorecard approach provides a clear prescription as to what

companies should measure in order to ‘balance’ the financial perspective.

The balanced scorecard is a management system (not only a measurement system) that

enables organizations to clarify their vision and strategy and translate them into action. It provides

feedback around both the internal business processes and external outcomes in order to

continuously improve strategic performance and results. When fully deployed, the balanced

scorecard transforms strategic planning from an academic exercise into the nerve center 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 in

long-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:

1. Learning Perspective:

2. Business Process Perspective

3. Consumer Perspective:

4. Financial Perspective:

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Out of the above mentioned perspectives, 2 are explained below:

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 these are 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.

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Q.2 Write a note on the Employment handbook. [10]

Employee Handbook

While an employee handbook is not required for employers, it is the recommended location for all

of an organization’s policies and procedures. Handbooks should be updated at least annually to

ensure that any changes in federal or state laws are reflected as appropriate, as well as changes

to company polices and procedures. For example, recent New Hampshire law changes

necessitate the addition of crime victim leave and first responder leave policies to your personnel

policies. Equally important as the employee handbook content is how well its contents are

communicated to employees.

Employee Handbooks are also often called Policy and Procedures Manuals. The

Handbook/Manual is a statement of the policies of the business and how the business is to be

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conducted. The company employee handbook is one of the most important communication tools

between your company and your employees. 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 have

considered 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 first formal

communications that you will have with an employee after they are hired. Make sure the first

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 to overwhelm.

For instance, if there are other documents (i.e. group insurance handbook, and retirement plan

documents) which more appropriately provide details, don't try to recreate the information in the

handbook. Instead, offer a brief summary and refer to the other document in the employeehandbook. Make sure that you are familiar with the myriad of laws and regulations for 

employment. It is always wise to consult with a lawyer on any topics that you don't understand.

The actual policies in the manual will vary from company to company, depending on its size,

number of employees, and benefits offered. Regardless of the size or complexity of your 

business, once you hire your first employee its best to take the time to think through the policies

for your company, have at least the minimum list of policies for your employees, and write them

down.

Some of the types of policies you may wish to include in your handbook are:

An Employee Acknowledgement Form

Introduction to the Employee Handbook*

Equal Employment Opportunity Statement*

General Policies:

Personal Information

Attendance

Use of Company Property*

Confidentiality

Dress Code

Safety and Accident Rules*

Substance Abuse

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Sexual Harassment

Smoking

Performance Reviews

Employment Categories

Additional Policies

Compensation and Benefits:

Payroll*

Work Hours and Reporting*

Holidays*

Vacation*

Sick Leave*

Family and Medical Leave*

Maternity Leave*

Funeral Leave*

Jury Duty*

Military Service*

Group Insurance Benefits

Short Term Disability

Continuation of Medical/COBRA

Worker's Compensation

Retirement Plans

Tuition Assistance

Employee Assistance Program

Other Benefits

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Q.3 Visit the following site to identify your Big Five http://similarminds.com/big5.html

Explain the five traits in detail, discussing the facets related to each personality factor and mark

the ones you found dominant in your personality, after conducting the test.

[10]

Answer:

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The Big Five is currently the most accepted personality model in the scientific community. The Big

Five emerged from the work of multiple independent scientists/researchers starting in the 1950s

who using different techniques obtained similar results. Those results were that there are five

distinct personality traits/dimensions. Here are your results on each dimension:

Extroversion results were moderately high which suggests you are, at times, overly talkative,

outgoing, sociable and interacting at the expense of developing your own individual interests and

internally based identity.

Orderliness results were moderately high which suggests you are, at times, overly organized,

neat, structured and restrained at the expense too often of flexibility, variety, spontaneity, and fun.

Emotional Stability results were medium which suggests you average somewhere in between

being calm and resilient and being anxious and reactive.

Accommodation results were medium which suggests you are moderately kind natured, trusting,

and helpful while still maintaining your own interests.

Inquisitiveness results were medium which suggests you are moderately intellectual, curious,

and imaginative.

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